German corporate governance advisor VIP (Vereinigung Institutionelle Privatanleger, or Association of Institutional Shareholders) says it will vote against discharging Deutsche Bank’s supervisory board on the grounds that it botched the search for a successor to CEO Josef Ackermann.
In a letter to Deutsche’s management, VIP CEO Hans-Martin Buhlmann laid out his reasons: “The most esteemed and difficult task of a German supervisory board is to hire new management executives in a way that does not disrupt the day-to-day operations of the institution. VIP observes that the board did not fulfil this task.”
“Time and again, one had the impression that the board was not in charge of the situation. It appeared as though it neglected its duty to shape events and has, as a result done a disservice to the bank’s image,” Buhlmann wrote.
VIP is a member of the United Nations EnvironmentProgramme Finance Initiative (UNEP FI) and a signatory to the UN Principles for Responsible Investment.
Ackermann is to step down at Deutsche’s shareholder meeting on May 31. His successors are Anshu Jain, the investment bank head and Jürgen Fitschen, head of Germany. The complicated co-head arrangement is the result of a long drawn-out succession battle between Ackermann and Clemens Börsig, head of the supervisory board. Buhlmann also took issue with the proposed hike in board compensation to €2.61m in 2011 from €2.45m in 2010. He said: “The market value of the bank and the performance of the supervisory board do not justify any hike. The right thing to do would be to donate the money, so that the principle of performance-based pay is upheld.”
VIP’s letter comes as Hermes Equity Ownership Services has also revealed it plans to vote against discharging the bank’s supervisory board.
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