May 9 2012
An attempt by 104 London investment bankers to get 50 million euro (£42 million) in unpaid bonuses has succeeded at the High Court.
The individual claims brought by former employees of Dresdner Kleinwort Limited (DKL) against the company and its new owner, Commerzbank AG, ranged from 15,000 euro to two million.
In January, Andrew Hochhauser QC told Mr Justice Owen the bonuses should have been paid for the year ending December 31 2008 from a guaranteed minimum bonus pool of 400 million euro because of "binding and enforceable contractual promises" made between August and December 2008.
They were to be allocated to front- and middle-office employees in the usual way, taking into account individual performance, and paid in full in cash in January 2009.
"Put briefly, those promises have not been honoured and that is why we are here today," he said.
"Although the defendants accept that the statements which we rely upon were made, they deny that they amounted to contractual obligations."
Mr Hochhauser said the pool was created in August 2008 in order to retain staff in the face of a mass exodus, and was formally communicated to them by Dr Stefan Jentzsch, then chief executive of Dresdner Kleinwort Investment Bank, who said the pool would remain "no matter what", irrespective of financial performance.
The judge said: "I have come to the conclusion that the claimants are entitled to payment of bonuses provisionally awarded to them."
A Commerzbank spokesman said later: "We are disappointed with the court's decision and will seek leave to appeal. The bank believes that the decision to reduce discretionary bonuses in light of 6.5 billion euros of losses at Dresdner Kleinwort for 2008 was responsible and justified.
"The main argument revolves around whether the announcement on August 18 amounted to a legally binding agreement. It is the Bank's submission that there is every prospect that the Court of Appeal would come to a different view on this matter."