UPDATE 2-Commerzbank introduces claw-back option on bonuses

* New compensation system for top two levels of management

* Share awards to be paid out after three years

* Bonus system to include claw-back option

(Adds further details, background)

By Edward Taylor

FRANKFURT, Nov 10 (Reuters) - Germany's Commerzbank (CBKG.DE) will introduce a claw-back option to its bonus system next year as the banking industry aims to stop the short-term risk-taking that helped bring about the financial crisis.

The bank, 25 percent owned by the German state after an 18 billion euro ($30 billion) bailout, is responding to public outrage over the eye-popping payouts made to bankers who mainly worked at the bank's loss-making investment bank.

Although regulators and politicians broadly agree that risk-hungry behaviour by highly paid bankers was one of the main causes of the crisis, they have struggled to agree on how to regulate or cap bonuses.

Unicredit (CRDI.MI), Morgan Stanley (MS.N) and UBS AG (UBSN.VX) have responded to political pressure by overhauling their bonus systems to include claw-back options. Deutsche Bank (DBKGn.DE) has said it will look at introducing such a measure.

For Commerzbank the new system announced on Tuesday is part of a wider push by Chief Executive Martin Blessing, who won't get a bonus this year, to clamp down on payouts that reward only short-term performance.

Germany's second-largest bank is already waging a legal campaign on several fronts against former employees over pay. [ID:nLF590059] [ID:nLU501174]

Starting next year, Commerzbank will stagger bonus payouts and drop them altogether if the bank's performance has suffered, Commerzbank said in a statement.

The Frankfurt-based lender said the payout of some stock options would be deferred over three years and the final payment would depend on how its stock performs over the medium term.

Part of top managers' remuneration will be paid into a so-called bonus bank, rather than handed straight to employees, so the bank can reclaim it if goals are not met, Commerzbank said.

"The performance focus in the variable compensation leads to increased payments in good and reduced payments in bad times," said Ulrich Sieber, the bank's head of human resources.

Thanks in large part to the losses run up by the investment banking operations at Dresdner Bank, Commerzbank posted a 6 billion euro loss in 2008.

Ironically, some of the regulatory changes introduced to stabilise the financial system will have helped boost bonus payments.

Steps such as letting banks delay booking losses on toxic assets, giving them readier access to central bank funding, easing the rules on collateral and banning short-selling of bank shares will have improved the metrics on which bonuses are based.

The government rescue of counterparties such as American International Group (AIG.N) will also have lent a further boost to profits and bonuses. (Reporting by Edward Taylor, editing by Will Waterman) ($1=.6676 Euro)