Nov. 15 (Bloomberg) -- Deutsche Bank AG Chief Executive Officer Josef Ackermann abandoned a plan to become supervisory board chairman in 2012 because Europe’s debt crisis hasn’t given him the time to win shareholder support.
Deutsche Bank will instead nominate Paul Achleitner, the finance chief of insurer Allianz SE, the Frankfurt-based lender said in a statement yesterday. Ackermann will step down as chief executive as planned in May, to be succeeded by Juergen Fitschen and Anshu Jain.
Ackermann, 63, Deutsche Bank’s CEO for the last nine years, was set to replace Clemens Boersig as chairman in May. The change, announced in July, drew criticism from politicians including Wolfgang Bosbach, a member of Chancellor Angela Merkel’s Christian Democratic Union, because it ran counter to German corporate governance rules. Since then, Deutsche Bank shares have fallen 25 percent as Europe’s debt crisis led regulators to order banks to boost capital to shield against market turmoil, and lenders agreed to share losses on Greek sovereign debt.
“We welcome the decision from the shareholder perspective,” said Markus Temme, a spokesman for Union Investment GmbH, in an e-mailed response to questions. Union Investment owns 0.64 percent of Deutsche Bank shares, according to data compiled by Bloomberg. “An immediate candidacy by Mr. Ackermann for the role of supervisory board chairman would have led to potential conflicts of interest and resulting reputation risks for Deutsche Bank.”
Ackermann becoming chairman would have made Deutsche Bank the first DAX Index member to seek an exemption to German rules introduced in 2009 that call for a two-year grace period before a CEO can accept the role of supervisory board chairman. A clause in the 2009 rules grants an exception if the candidate has the support of shareholders controlling at least 25 percent of the voting rights.
Ackermann has told people close to him he made his decision a few weeks ago after initial talks with investors showed he may not have their support for the chairmanship because of governance concerns, according to two people familiar with the matter who declined to be identified. He then went to Boersig to tell him about his decision and Deutsche Bank started discussions with Achleitner, they said. Talks about finding a new chairman preceded the prosecution’s raid of Deutsche Bank’s offices last week related to the Kirch trial, they said.
Deutsche Bank had sought Ackermann’s election to the post so that it would “continue to profit from his knowledge, experience and professional network,” it said at the time.
“The extremely challenging conditions on the international financial markets and in the political-regulatory environment demand his full attention” as CEO, Deutsche Bank said of Ackermann in yesterday’s statement. “This does not allow enough scope for the many talks with individual shareholders necessary to implement the original plan.”
German Finance Minister Wolfgang Schaeuble welcomed Ackermann’s decision to abandon his ambition to become chairman, Handelsblatt reported, citing an interview. A CEO shouldn’t switch directly into the position of chairman under corporate governance guidelines, Schaeuble said, according to the newspaper.
Ackermann, asked about the decision on the sidelines of a conference in Frankfurt, said: “Do I look like I’m sad and depressed? Probably not.”
Former Goldman Executive
Ackermann led Deutsche Bank through the credit crunch of 2008 without a government bailout, and has been at the center of the industry’s response to the European debt crisis. He serves as chairman of the International Institute of Finance, a Washington-based group that represented banks and insurers in talks with European Union officials over the voluntary losses on Greek debt.
“I’m surprised,” said Matthew Czepliewicz, an analyst at Collins Stewart Hawkpoint Plc in London. “He has been one of the best bank CEOs out there, so this isn’t good for Deutsche Bank to lose him.”
Achleitner, 55, born in Linz, Austria, is a former head of the German business of Goldman Sachs Group Inc. At Allianz, he oversaw the unwinding of cross-shareholdings between the insurer and Munich Re, the acquisition of Dresdner Bank in 2001 and the Frankfurt-based lender’s sale, announced in 2008. At Goldman, he advised Deutsche Bank on its $9 billion purchase of Bankers Trust Corp. in 1998.
Ackermann’s decision came as Munich prosecutors began an investigation regarding the CEO’s testimony in a civil suit over the 2002 demise of the late Leo Kirch’s media group. Ackermann and other bank managers in May testified about a management board meeting on Jan. 29, 2002, as part of the lawsuit filed by Kirch. They were quizzed by judges over the wording from minutes of the board meeting, discussing a possible Kirch group restructuring.
Kirch, who died in July, claimed Deutsche Bank secretly planned to damage his reputation in an effort to exert pressure on him. Part of that plan, Kirch said, was an interview former Deutsche Bank CEO Rolf Breuer gave on Bloomberg Television in which the executive said “everything that you can read and hear” is that “the financial sector isn’t prepared to provide further” loans or equity to Kirch. Within months, Kirch’s group filed the country’s biggest bankruptcy since World War II.
Along with Ackermann, Breuer and other officials who testified are being investigated, Deutsche Bank spokesman Detlev Rahmsdorf said in an interview yesterday. Prosecutors searched Deutsche Bank offices as part of the case.
The lender filed a motion to have the three judges in the 2 billion-euro ($2.7 billion) civil case removed because of “possible illicit cooperation” with prosecutors, he said.
“We only learned about this last week and immediately filed to have the bench removed,” Rahmsdorf said, calling the criminal probe “baseless.”
--With assistance from Ragnhild Kjetland, Nicholas Comfort in Frankfurt and Karin Matussek in Berlin. Editor: Angela Cullen, Frank Connelly
To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at firstname.lastname@example.org; Oliver Suess in Frankfurt at contact the editor responsible for this story: Frank Connelly at email@example.com