Credit Suisse CEO Tidjane Thiam Calls for Investor Calm
April 29 2016 - 10:50AM
Dow Jones News
ZURICH—Top executives at Credit Suisse Group AG asked
shareholders on Friday to be patient with the Swiss bank's
turnaround efforts and depressed stock price.
Addressing investors at Credit Suisse's annual meeting, Chief
Executive Tidjane Thiam said that, "the development of our
company's share price in recent months has been disappointing for
you as shareholders, for everyone at Credit Suisse and for me
personally."
Some weren't placated. Credit Suisse "reminds me of an office
building that seems to be collapsing," said the first shareholder
to speak following Mr. Thiam's remarks. "We shareholders are the
suffering owner of the building."
The bank's shares have lost more than 40% of their value since
Mr. Thiam took over last July. The stock fell 4% on Friday, as the
bank hosted its five-hour-long meeting in a suburb of Zurich.
The bank said 18% of shareholders voted against short-term
bonuses awarded to Credit Suisse executives for 2015, and nearly
15% voted against the executives' fixed pay amounts.
Mr. Thiam is attempting a broad shift in strategy that involves
paring back Credit Suisse's investment bank, and focusing more on
wealth-management businesses.
The CEO noted particular difficulties encountered late last
year, which contributed to the bank's pretax loss of 2.4 billion
Swiss francs ($2.5 billion) for all of 2015. Mr. Thiam also noted
plans unveiled last month for deeper cuts than originally
envisioned at Credit Suisse's investment bank, which had generated
nearly $1 billion in losses late last year and early this year that
blindsided investors and analysts.
The Wall Street Journal reported Thursday on internal confusion
at Credit Suisse during a critical period late last year, as
supervision of the investment bank business generating the losses
was being transferred to new management. Past and present heads of
the business have given differing accounts of who was in charge of
what, and when.
"There will always be people who question or criticize a chosen
path, a strategy or the implementation of plans," Credit Suisse
Chairman Urs Rohner said at Friday's meeting. He added: "We welcome
this dialogue."
Thomas Minder, a shareholder and member of parliament who
spearheaded legislation granting Swiss investors a direct say on
executive pay levels, told Mr. Rohner that "we are horrified" by
corporate governance at the bank. "Are you aware that your current
compensation system calls for further regulation?" he asked. In
particular, Mr. Minder criticized a replacement award given to Mr.
Thiam, valued at nearly 10 million francs as of last month and
meant to compensate him for pay left behind at his former employer,
U.K. insurer Prudential PLC.
Mr. Rohner defended Mr. Thiam, calling him "the ideal CEO" to
lead the bank through its restructuring. The bank's senior
management will "not allow our confidence to be undermined by
short-term events," the chairman said.
Mr. Thiam had limited banking experience before he was hired
last year to lead 160-year-old Credit Suisse through what promised
to be a trying period.
Many analysts and investors have viewed deep cuts to Credit
Suisse's investment bank as long overdue. Increasingly stringent
capital rules and challenging markets have made the relatively
volatile business less attractive in recent years.
However, Mr. Thiam's predecessor, Brady Dougan, limited his
investment bank reductions to more peripheral cuts. A shareholder
at Friday's meeting inquired about clawing back compensation for
Mr. Dougan, but was told the bank has no plans to do so.
Write to John Letzing at john.letzing@wsj.com
(END) Dow Jones Newswires
April 29, 2016 10:35 ET (14:35 GMT)
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