Responding to increasing regulatory pressure in the U.S. and Europe, Deutsche Bank (NYSE:DB) announced on Tuesday a program designed to bolster its financial reserves and reduce costs, sending its shares higher.

Bank officials said they expected to trim annual costs by €4.5 billion within three years, the Associated Press noted. On the news, shares of Deutsche Bank rose more than 4% in Tuesday morning trading in New York.

Among the areas hit by cost-cutting measures will be executive compensation. The bank will pare back bonuses paid to executives, and bonuses paid with bank shares will be deferred for five years.

By deferring the bonuses, Deutsche Bank is hoping to discourage executives from making risky investments that result in immediate profits — boosting bonuses — but that increase the long-term potential for losses.

In the event of dramatic losses, the bank may claw back bonuses, especially on the group level.

The amount of higher-risk assets the bank holds will be cut to balance its reserves in compliance with Basel III requirements. €135 billion of nonessential investments will be transferred into a newly created unit. Fully €45 billion of those investments will be divested by the first quarter of next year.

Deutsche Bank officials said operations at its investment banking unit would be reduced. DB has already announced 1,900 worldwide job cuts, most of those at the investment banking unit.

Additionally, it will reduce its international footprint in places like London and New York.