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Allianz boss given bumper pay rise despite Structured Alpha debacle

Allianz CEO Oliver Bata received a 24% pay rise in 2021, a year in which a scandal in its U.S. asset management business mimics nearly 3 billion euros in annual profits.

Bata’s total annual salary rose to € 7.9 million, up from € 6.4 million in 2020. His base salary increased by 12% while his variable salary rose by 36%, according to the group’s annual report released on Friday.

Last month, when Bäte revealed annual results, he Told reporters That management will bear the “fair share of the burden and will have a significant impact on our remuneration to every board member and member.”

Allianz said in a statement on Friday that the wage increase would have been even higher without the Structured Alpha scandal as 2021 was a record year. The group said the net profit is “determining a key in the target achievement percentage”, adding that the bonuses “were reduced by about 24 per cent due to the provisions recorded for Structured Alpha”.

Without the impact of Structured Alpha, Bäte’s total salary would have risen close to 50% to € 9.5 million, according to a person familiar with the subject.

Bata declined to comment for comment.

The group’s operating profit climbed 25% to a peak of 13.4 billion euros, in a sharp turnaround of 2020-less performance hit by Covid-19.

Structured Alpha funds, managed by Allianz Global Investors, have been marketed to investors as a safer and better alternative to passive investments that follow blue-chip indices. However, during the market storm with the onset of the epidemic in 2020, the funds suffered heavy losses. Investors subsequently sued the company for alleged misconduct, accuser That of using a “reckless strategy”.

After an internal investigation, Allianz took out Profit warning In August last year and apologized to investors. It is under investigation by the US Department of Justice and the Securities and Exchange Commission. The revelation of the Ministry of Justice investigation mimics almost 7 billion euros of Allianz’s market value in one day.

In recent months, Alliance has settled the dispute with a number of investors and as a result a provision of 3.7 billion euros. Because the order lowered the group’s tax burden, the bottom line hit was 2.8 billion euros.

However, Bäte in February warned that the final financial burden would be greater as talks with “some remaining investors” as well as with the SEC Department of Justice continue. “We expect the Alliance group to bear some additional expenses before these matters are finally resolved,” Bata said.

In its annual report, the group said “discussions” with the remaining plaintiffs, the DOJ and the SEC are ongoing. He stressed that the “timing and outcome” of such calls are uncertain.

Allianz boss given bumper pay rise despite Structured Alpha debacle Source link Allianz boss given bumper pay rise despite Structured Alpha debacle

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