Deutsche Bank cut investment bankers' pay by 14 per cent in 2013, slashing salaries, bonuses and other benefits in its corporate banking and securities division.
The move has heightened concerns that European banks can no longer compete with their US peers.
Tom Gosling, head of PwC's reward practice, told the Financial Times that European banks are walking a tightrope when it comes to remuneration.
“Over the last couple of years European investment banks have been reducing pay quicker than their US counterparts,” he explained.
“If they want to stay competitive there’s a limit to how much more they can do that.“
The German-based bank is currently undergoing a significant restructuring plan and its chief executives Anshu Jain and Jürgen Fitschen said the company will emerge in 2015 in a position to lead consolidation in Europe.
"We are fully aware of the enormous challenge we have set ourselves. This will also entail some painful changes," Mr Fitschen told reporters at the bank's annual news conference.
By Claire Archer