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5. Allianz CEO apologized for funds unit debacle


Gigantic German financial services company Allianz SE came under fire this year as it tried to resolve and rebound from fraud and massive losses at its fund management unit.

In February, the Munich-based company’s CEO, Oliver Baete, said he and the company’s board would take bonus cuts following the collapse of a $15 billion set of investment funds during the pandemic market turmoil.

Mr. Baete said there would be a “significant impact” on board compensation for the year. His pay package in 2020 totaled €6.39 million ($6.77 million), and the entire board’s was €32 million.

According to Allianz’s annual report, Mr. Baete’s compensation actually increased 9% to €6.96 billion in 2021, although news outlets said he would have been eligible for a larger bonus as a share of his compensation had the funds unit not sustained such large losses.

The story about the bonus cuts announcement and the accompanying apology was the fifth most-read risk management-related story on Business Insurance’s website this year.

In February, Allianz set aside $4.2 billion to deal with investigations and lawsuits resulting from the collapse of the funds and set aside a further $2 billion in May. The funds had used complex options strategies that turned sour when the spread of COVID-19 triggered wild stock market swings in early 2020.

In May, Allianz agreed to shut down the unit – Allianz Global Investors – as part of a guilty plea for securities fraud and a $6 billion settlement with U.S. law enforcement and regulators, and in August it spent some $140 million on the shutdown.

No. 6 most read story