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5. Allianz CEO apologized for mutual fund debacle



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

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

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

According to Allianz’s annual report, Baete’s compensation actually increased by 9% to 6.96 billion euros in 2021

, although news media said he would have been eligible for a larger bonus as part of his compensation had the fund unit not suffered such heavy losses.

The story about the bonus cut announcement and accompanying apology was the fifth most read risk management related story on Business insurances website this year.

In February, Allianz set aside $4.2 billion to handle investigations and lawsuits stemming from the collapse of the funds, and set aside another $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 close the unit — Allianz Global Investors — as part of a guilty plea to securities fraud and a $6 billion settlement with U.S. law enforcement and regulators, and in August it spent about $140 million on the shutdown.

No. 6 most read story


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