Credit Suisse shareholders fume at ‘greed and incompetence’ of execs as final AGM begins
Credit Suisse hosts its final AGM today, and it could get ugly.
It will be the first time chair Axel Lehmann and chief executive Ulrich Korner will speak to shareholders since Credit Suisse’s state-brokered takeover by UBS.
The deal is unpopular with shareholders, politicians and the public alike. Reportedly crowds gathered outside the arena to protest against the creation of the new banking behemoth.
Shareholders have already signalled their disapproval at the way the emergency acquisition was handled, but today they’ll have the opportunity to question the executive team about the takeover for the first time.
Ordinarily, shareholders would have to vote through such a transaction, but Swiss authorities forced the deal through without a vote.
UBS paid just $3.5bn for its long-time rival. Credit Suisse’s market capitalisation immediately before the deal was more than double that.
In a statement ahead of the AGM, Ethos Foundation, which represents 200 Swiss pension funds, criticised the “greed and incompetence” of Credit Suisse’s management.
It said it had been concerned by the “abuses and misconduct observed within the management bodies of Credit Suisse.”
“Shareholders have lost considerable amounts of money and thousands of jobs are on the line,” it said.
A top 10 investor, Norges Bank Investment Management, Norway’s sovereign wealth fund, is set to vote against the re-election of chair Axel Lehmann and six other directors in protest.
In a statement explaining its decision to vote against Lehman and the other directors, it said: “Shareholders should have the right to seek changes to the board when it does not act in their best interest.”
“We will consider whether the board has failed to act on material requests from shareholders, sought to circumvent shareholder proposals or implemented governance changes limiting shareholders’ rights without their approval,” it continued.
Credit Suisse has also already withdrawn two proposals from the AGM, saying they were no longer necessary.
One was a so-called ‘discharge’ vote, which would absolve board members of legal responsibility for the last financial year. ‘Discharge’ votes are common in Swiss AGMs.
The other was a vote on a special CHF30.1m bonus, which would have been paid to the executive team for completing its five-year restructuring plan.
Norges were set to vote against the ‘discharge’ vote, as were a collection of other shareholders.
The AGM comes just two days after Swiss prosecutors announced that it would open an investigation into the takeover. It will examine possible breaches by regulators, government officials and bank executives.
The deal has been very unpopular in Switzerland with the two largest political parties expressing discontent with the takeover. The junior house of the Swiss parliament has called for a parliamentary inquiry to be set up to examine the acquisition.
UBS will host its AGM tomorrow.