€600bn global institutional investors vote against Deutsche Bank board

Vote against discharging supervisory board for 2011

A group of major institutional investors with combined assets under management of €600bn has voted against backing Deutsche Bank’s supervisory board at its annual meeting in Frankfurt today, according to Hermes Equity Ownership Services.

The institutions, which hold a combined 6m Deutsche shares, voted against discharging the board for its activities in 2011.

Hermes’ Hans-Christoph Hirt, in a speech at the meeting, said he was representing US pension giant the California State Teachers Retirement System (CalSTRS), sustainable funds firm Calvert, Dutch asset manager MN Services and Hermes’ owner the BT Pension Scheme.

He also said that UK railways industry fund Railpen and Dutch asset manager Robeco also supported his statement. “Finally, PGGM of the Netherlands has asked me to point out that for various reasons, they will be voting against the discharge of the Supervisory Board,” he went on.

“Ladies and gentlemen, we are dissatisfied with the performance of the Supervisory Board in recent years and have lost confidence in its current members,” Hirt declared.

Hermes said the issues were “deficiencies” in succession planning for outgoing CEO Josef Ackermann, the failure to take account of investor concerns about pay and “insufficient alignment” with the principle of sustainability.
Hirt said: “We ask all shareholders to vote with us against the discharge of the Supervisory Board.”At the meeting, Ackermann told investors that the bank has severed all ties to companies which make cluster bombs as part of a new policy that took effect last November, although existing contractual obligations would be fulfilled and companies given time to wind down any such activities.

But NGOs urgewald and Facing Finance challenged Ackermann’s comments. According to them, the bank has done €126m of business, including loans, with makers of the munitions since the policy took effect. The NGOs said that as late as February, Deutsche provided US defence firm L3 Communications with a loan worth €47.5m.

“We ask all shareholders to vote with us against the discharge of the board”

A spokesman for Deutsche confirmed the business tie to L3, but said the firm had promised to cease its involvement in industry. “Our policy is clear: We will no longer do business with cluster bomb manufacturers,” he added.

In the meantime, Deutsche has stopped launching exchange traded funds (ETFs) based on foodstuffs. It also backs G20 plans to make the markets for derivatives on foodstuffs more transparent, and, to this end, efforts to strengthen regulation of those markets.

With reporting by Jan Wagner