Contractual rights and discretionary bonus pools: watch what you say
In Dresdner Kleinwort Ltd & Commerzbank AG v Richard Atrill & ors and Fahmi Anar & ors  EWCA Civ 394, a ‘town hall’ announcement made by the chief executive officer of Dresdner’s investment banking business (known as Dresdner Kleinwort, or DK), to the effect that a ‘guaranteed’ minimum bonus pool would be made available to DK employees, was a contractually binding promise.
Made against the backdrop of the unfolding global financial crisis in 2008, an anticipated mass exodus of key employees and immediately prior to Dresdner’s acquisition by Commerzbank, DK could not renege on this contractual commitment to employees by subsequently introducing a ‘material adverse change’ (MAC) clause that attempted to make payment of the provisional bonus awards conditional upon the bank’s financial performance.
In spring 2008, Dresdner Bank AG announced its intention to separate its commercial and investment banking divisions through either a sale, downsizing or winding down of DK. Many investment bankers began jumping ship and considering resignation. The (then) FSA put Dresdner’s UK-regulated entities on its ‘Watch List’ and required it to take action to reduce the risk of losing key staff…
If you are registered and logged in to the site, click on the link below to read the rest of the Allen & Overy briefing. If not, please register or sign in with your details below.
News from Allen & Overy
News from The Lawyer
Briefings from Allen & Overy
Extension of the sanctions relief provided for in the Joint Plan of Action between the P5+1 and the Islamic Republic of Iran
On 18 July 2014, the P5+1 (the US, the UK, Germany, France, Russia and China) agreed with Iran to extend their commitments under the Joint Plan of Action.
This year is expected to be a bumper year for pension risk transfer in the UK.
Analysis from The Lawyer
At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.