He is sorry that the turnaround failed. “The loss of trust has broken our necks,” said Lehmann, who has been in office for a good year, on Tuesday. “I want to apologize for everything that happened.” The small investors went to court with the top management. “CS was ruined by those responsible,” said one. “They wanted to play in the top league, no matter what the cost. Instead, they threw scandal after scandal.”
In mid-March, the Swiss government orchestrated an emergency takeover of Credit Suisse by rival UBS after a bank run brought the 167-year-old institution to the brink of insolvency. “Until the beginning of the fatal week, I believed in a successful turnaround,” explained Lehmann. But rising interest rates, inflation and the loss of confidence, together with the problems in American banks, have caused a conflagration. “The bank could no longer be saved.”
A small shareholder, on the other hand, made board members and managers responsible for the crash. “Credit Suisse didn’t fail because of market distortions, but rather because of the lack of control at the top of the company. The sufferers are the employees, who had to spoon up the soup that the highly praised elite brought us.” Experts reckon that the merger of UBS and Credit Suisse, which currently has more than 120,000 employees, could cost thousands or even tens of thousands of jobs.
VOTING RIGHTS ADVISOR: HIGH BONUSES ARE BLAME
President Lehmann and CEO Ulrich Körner addressed the shareholders publicly for the first time since the rescue operation. However, around 1,750 owners were not allowed to comment on the takeover, nor were UBS shareholders at their upcoming general meeting on Wednesday. The deal was enforced with emergency law.
The fact that the traditional bank was able to get to this point is due to a long series of failures that made Credit Suisse the number one problem child among European banks. In the last financial year alone, the bank made a loss of CHF 7.3 billion. Swiss proxy advisor Ethos said it could not have prevented “a flagship of the Swiss economy from disappearing due to the greed and incompetence of its managers.” The shareholders would have lost an enormous amount of money. The high bonuses are one of the reasons why some employees have taken ever greater risks. In several votes on compensation issues, the Board of Directors was only able to secure a wafer-thin majority. The shareholders even rejected the fixed remuneration for the board for the coming months.
The 2023 AGM marks the ignominious end of the bank founded by entrepreneur Alfred Escher to finance the construction of the Swiss railway network and the tunnel through the Gotthard. Demonstrators gathered in front of the event hall, setting up a capsized boat to represent the sinking of the bank. Five long-standing board members, whose re-election had been rejected by the influential Norwegian sovereign wealth fund, resigned at short notice.
Körner explained that the announcement of the takeover by UBS for CHF 3 billion immediately created stability and now allows an orderly transition. “We will do our utmost to ensure a smooth merger with UBS,” said Lehmann. He hopes that the transaction will be completed in the second half of the current quarter.
But Credit Suisse shareholders feared that the end of the bank would have long-lasting effects. “It’s a shame for Switzerland. In doing so, we have jeopardized the confidence in the Swiss banking center,” said a small shareholder. Not only the shareholders, but also the representatives of all government parties expressed reservations. The majority of the Swiss population also rejects the solution. In the week after Easter, the Swiss parliament will debate the consequences of the rescue. Even if the cornerstones of the deal are unlikely to be shaken, it is conceivable that parliament will set new standards for UBS, which is now the only major Swiss bank left.
CS shareholders confirm Lehmann in role as Chairman of the Board
The shareholders of the major Swiss bank Credit Suisse have re-elected Axel Lehmann as Chairman of the Board of Directors. At the last general meeting of the institute before it was taken over by its competitor UBS, 55.7 percent of the shareholders voted for it. Previously, Lehmann and bank boss Ulrich Körner had to listen to the anger and disappointment of the shareholders at the end of the traditional bank. Lehmann thanked the shareholders for their trust. The board of directors will continue to ensure the course of business until the merger with UBS.
Previously, various shareholder groups such as the influential US voting rights advisor Glass Lewis and the Norwegian sovereign wealth fund had spoken out against the re-election of Lehmann and other board members. Lehmann only took over the presidency of Credit Suisse in January 2022 after his predecessor António Horta-Osório resigned for violating corona rules.
CS shareholders follow the board’s resolution proposals only narrowly
The shareholders of the major bank Credit Suisse followed the first resolution proposals of the board of directors on Tuesday only very narrowly. At the general meeting, 61.4 percent of the shareholders voted for the 2022 annual financial statements with a loss in the billions and the management report. It was tight when it came to the compensation report for the past year: Only 50.06 percent of the represented shareholder votes pressed the yes button in the electronic vote.
Previously, numerous shareholders had vented their anger and disappointment at the end of the bank. The millions in remuneration for top management in recent years have also been discussed again and again.
Due to serious problems, the major bank had to be taken over by its Swiss competitor UBS. The transaction was ordered on March 19 by the Federal Council, the Swiss National Bank and the financial market regulator Finma after Credit Suisse’s situation had deteriorated sharply again. The shareholders of the two banks have no say in the takeover./tp/jb/AWP/stw/he
Shareholders vote against the executive board’s salary
Credit Suisse shareholders have rejected the fixed salary for the group management in the coming weeks until the bank is taken over by UBS. Only 48.43 percent of those present at Tuesday’s AGM voted yes, 48.21 percent voted no, and 3.36 percent abstained.
For the members of the Executive Board, the Board of Directors had proposed a maximum amount of 34 million Swiss francs (a good 34 million euros) for the fixed part of the remuneration for the period from the Annual General Meeting to the Annual General Meeting in 2024. It is already clear that this will not take place next year.
Before the vote, Chairman of the Board of Directors Axel Lehmann emphasized that it was only a matter of remuneration in the coming weeks until the bank was taken over by UBS. The sum ultimately paid would have been much smaller than the CHF 34 million requested. Now the supervisory body must examine the next steps, he said after the defeat. Meanwhile, the CS shareholders approved the remuneration for the board of directors, but this decision was also very close./ys/AWP/stw/he
The CS share is temporarily 0.5 percent higher in Swiss trading at CHF 0.8072.
Zurich (Reuters / dpa-AFX)
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