Business

Germany's Commerzbank sees bonus plan blocked

Commerzbank logo Image copyright Getty Images

The German government has blocked a plan by Commerzbank to pay bonuses to its top staff worth double their basic salary.

A motion was put forward at the bank's annual meeting and needed 75% of shareholders to vote in favour.

However only 64.7% of those present backed the plan, with the German government using its 17% voting stake to vote against it.

Commerzbank was rescued by the government in 2008.

Under new rules introduced by the European Union in the wake of the financial crisis, shareholder approval is needed for any bonus plan that exceeds an employee's base salary.

The finance ministry said the bank had failed to provide a convincing explanation for why such a bonus was needed.

However it did approve a separate proposal to allow certain executives to receive compensation worth 140% of their pay.

This "sets sensible incentives to reach targets and successfully implement strategic goals that the federal government will ultimately benefit from", it said in a statement.

Separately, Commerzbank said it would launch an internal investigation into the actions that led to it paying a $1.45bn settlement in the US for violating economic sanctions against businesses in Iran and Sudan.

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