Montag, 13. Juli 2009

Salary Caps at German Banks

Banks that receive government funds are only allowed to pay their top management a maximum salary of 500,000 €. HSH Nordbank is one of the biggest basket cases in German banking, so surely CEO Nonnenmacher is subject to the cap, right?

Turns out he isn't. According to the FTD, he will receive a bonus and a pension entitlement totalling 2.9 m €. That's on top of his regular salary (no idea how high that is).

How can that be? Well, technically HSH has not received money from Soffin. It "only" received guarantees of 30 bn €. The equity injection of 3 bn € came from the states of Hamburg and Schleswig Holstein, not from Soffin. So state-owned HSH can pay its CEO as much money as it likes.

Kommentare:

  1. In fact Hamburg and Schleswig-Holstein attached the same salary limits to their 13 billion aid package. However, they basically set the limits for themselves as the owners set the management salary. And they chose not to stick to their own limits.... So we can conclude that they set the limits just to calm the population.

    AntwortenLöschen
  2. Is 13 bn € a typo, or did Hamburg and Schleswig-Holstein really commit so much money? (In the article I quoted, it says 30 bn € from Soffin and "only" 3 bn € from the two states)

    AntwortenLöschen