FRANKFURT, Feb 18 (Reuters) – Allianz said on Friday it would significantly cut bonuses to its chief executive and board members as the group faces a U.S. legal investigation into with the “Structured Alpha” funds of its subsidiary Allianz Global Investors.
The insurance group also announced that it had reached an agreement with a “large majority” of investors who had filed a complaint, without specifying which ones.
Pension funds have taken legal action in the United States against Allianz Global Investors, one of the world’s leading asset managers, which they accuse of having been unable to protect their investments during the crisis period. financial market instability caused by the emergence of the coronavirus pandemic in early 2020.
Investors who believe they have been cheated are claiming a total of some 6 billion euros in compensation through a series of complaints in the United States.
Allianz is still negotiating an agreement with other investors as well as with the US Department of Justice and the SEC, the stock market authority, which have opened investigations.
During a press conference on Friday, the general manager, Oliver Baete, assured that this problem would have major consequences on his remuneration and those of the administrators, refusing to give more details.
In 2020, his remuneration reached 6.39 million euros and that of the board of directors as a whole 32 million euros.
“Government affairs and ongoing litigation remain at a sensitive stage,” Oliver Baete said.
Allianz announced on Thursday that it had spent a provision of 3.7 billion euros to deal with litigation over the “Structured Alpha” funds.
Ingo Speich, head of sustainability and corporate governance at Deka, one of Allianz’s main investors, expressed some relief after calling the issue a “massive setback” for the insurer.
According to him, the amount and timing of the provision are positive for Allianz and investors.
The insurance group, however, posted a net loss in the last quarter of 2021 and its full-year profit is the lowest since 2013.
On the Frankfurt Stock Exchange, the Allianz stock fell 1.7% at midday. (Report Tom Sims, Alexander Hübner, French version Lou Phily, edited by Blandine Hénault)
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