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Deutsch Bank Chief Executive Officer Settles Criminal Case

Josef Ackermann, Deutsch Bank Chief Executive Officer has agreed to pay $4.2 million, as a part of a settlement deal that will end a seven-year-legal-saga starting with the $183 billion takeover of Vodafone in 2000. Ackermann was accused of granting Vodafone executives extremely high compensation bonuses after the takeover. These bonuses are well accepted in the US but not in Europe. Klaus Esser, who was Vodafone`s CEO, will pay 1.5 million euros as a part of the settlement. He received the great bulk of the disputed bonuses. During the pat seven years Deutsche Bank`s impressive growth has been hindered by the lingering legal doubts presented by the on going investigation and trial.

German Legal experts believe that while this trial will not end in conviction it will most likely warn board members in other companies not to give executives more then in stipulated in their contracts. ?This will sharpen the conscience of board members that they are not the owners of companies, but trustees for the owners,? said Theodor Baums, who is an expert in corporate governance. ?It takes away a certain discretion from the supervisory boards to reward people.?

The language used Klaus Tolksdorf, who was head judge in the first trial in which Ackermann was acquitted led Deutsche Bank officials to believe that winning the retrial would be difficult. Tolksdorf called the bonuses paid to Vodafone executives "is nothing other than a waste of money," He also added that it. "runs against their fiduciary duty. There was no incentive to management as a result of these payments.? Although Ackermann initially resisted the settlement he later decided that he was better off finishing the story with some lost income and without a criminal record rather then continue spending his precious time in court.