No doubt it has been a long and bitter day for Deutsche Bank’s top management.
At Thursday’s annual general meeting, one shareholder after another took to the podium to air their frustrations with Anshu Jain and Jürgen Fitschen, the embattled leadership team of Germany’s largest bank.
“We are starting to ask ourselves whether the management of Deutsche Bank is really still in a situation to adequately lead this company,” said Ingo Speich of Union Investment, a fund manager based in Frankfurt. “Mr. Jain and Mr. Fitschen, when will this nightmare finally be over?”
Mr. Speich was hardly alone. At the end of Deutsche Bank’s annual meeting Thursday night, nearly 40 percent of its shareholders formally registered their disapproval with the bank’s direction. It marked a stunning rebuke in a country where 95 percent of shareholders typically back their company’s leaders.
Lucky for Mr. Jain and Mr. Fitschen, the only person who really mattered had already spoken. The co-chief executives who took charge of the bank in 2012 are staying – for now.
Paul Achleitner, chairman of the supervisory board that oversees the bank’s management, doubled down on his embattled chief executives just hours ahead of the start of Thursday’s tense annual meeting in the bank’s home city of Frankfurt.
The bank’s policy-setting panel, which hires and fires top managers, agreed during a late-night meeting Wednesday to stay the course and concentrate power in Mr. Jain, who represents the bank internationally and spearheads its investment banking operations. Mr. Fitschen, who leads the bank’s traditional commercial operations in Germany, will remain co-head with Mr. Jain.
The board meeting to discuss the bank’s senior management had been called after some institutional investors demanded changes at the top, angered by the bank’s struggles with costly lawsuits, record fines, and uncertainty over the effectiveness of its restructuring plans after years of sub-par profitability.
Mr. Achleitner, the former head of Goldman Sachs Germany and chief financial officer of Allianz, Germany’s largest insurer, acknowledged the bank’s reputation has been severely damaged over the past few years. But he urged investors not to rush to judgment – and pledged to keep a close eye on his managers’ progress in implementing a strategic overhaul of the bank in the coming weeks and months.
“We are not here to ostracize anyone, but are a body that you have elected which has to meet its legal and moral responsibilities to the best of its abilities,” Mr. Achleitner said Thursday.
His support may have been enough to keep Mr. Jain and Mr. Fitschen in the job, but it was hardly a ringing endorsement.
“One hundred percent support would have sounded more lasting,” Klaus Fleischer, a banking professor at the Munich University of Applied Sciences, told Handelsblatt Global Edition.
For their part, Mr. Jain and Mr. Fitschen were subjected to some isolated boos from the audience as they aggressively defended their plans in opening speeches at Thursday’s shareholder meeting.
“In June I will have worked for Deutsche Bank for 20 years. I am proud to have served this great institution. With your support, I hope to position this bank even better,” Mr. Jain said.
Just 61 percent of the bank shareholders backed the bank’s top management during a vote late Thursday. While that level of dissatisfaction was not enough to oust the bank’s top managers, it is extremely unusual in Germany, where managers are usually reaffirmed with a very high proportion of shareholder votes.
“Are you the problem for this bank, or the solution, or both?” asked Markus Kienle, a Frankfurt-based lawyer, pointing to Mr. Jain. Mr. Kienle spoke at Thursday’s meeting as a representative of some Deutsche Bank shareholders.
Mr. Jain and Mr. Fitschen took over the helm of Deutsche Bank in May 2012, but have failed to deliver the level of profits they initially promised, as the institution has slipped behind many of their global peers in the post-crisis era.
Deutsche’s share price, which has lagged well below its book value for much of Mr. Jain and Mr. Fitschen’s time in office – a measure reflecting market skepticism – held steady despite the barrage of criticism on Thursday, down just 0.5 percent at 12:00 central European time.