Dresdner posted a €6.3 billion loss for 2008, and although the bank's previous owner, Allianz, set aside €400 million in its annual bonus pot for global staff last summer, Commerzbank took the decision to slash bonuses by 90% in January. The move was allowed as the bank invoked a material adverse change clause caused by the fact that it was forced to go cap in hand to the German government for an €18.2 billion bail-out.
Although Dresdner senior executives waived their bonuses, other angry staff have instructed two law firms, Manches and Mishcon de Reya, to retrieve their money. One employee is reported to be demanding more than £10 million, reports UK paper The Evening Standard.
The German chancellor Angela Merkel has reacted with outrage that firms bailed out by the government should still award multi-million pound bonuses.
However the bankers maintain that they have a strong case as they were notified in writing of the size of their bonuses before the payments were revoked. To ensure that staff remained at Dresdner following the takeover, Allianz placed the bonus pool in a separate account to assure staff their bonuses would be paid - these assurances were presented to the Financial Services Authority, which has already warned Dresdner of the operational risks of its staff leaving en masse as a result of the takeover. Speaking to the Standard, Michael Diekmann, chief executive of Allianz, confirmed he told Dresdner staff in August the bonus pot had been set aside. "The FSA approached us and asked us to ensure personnel stability," he said.
This, along with the written confirmation of bonus amounts to staff, indicates that the employees could have a strong case against Commerzbank.
Other former Dresdner staff in New York, Singapore and Germany are also believed to be considering legal action, says the London newspaper.
Commerzbank has not yet commented on the suit.