FRANKFURT / Reuters
Once one of Germany’s chief power brokers in finance, Deutsche Bank Chairman Paul Achleitner’s switch of chief executive has triggered criticism that it was rushed through, casting a cloud over his own future.
Achleitner forced out CEO John Cryan after a row that centred on what some describe as Cryan’s ‘indecisiveness’ in cutting jobs and costs, according to people with direct knowledge of the matter. Pressure had built as the group’s share price tumbled in recent months, with problems further compounded by heavy losses.
Achleitner now hopes the appointment of Christian Sewing, who is expected to outline his plans in the coming weeks, will give fresh impetus to management albeit without any big change in strategy, those people said.
Cryan’s departure, orchestrated by Achleitner, who broke off a family Easter holiday in Peru to travel to New York and London to forewarn some investors, took many other major shareholders by surprise, the sources said.
The rushed nature of the replacement, sealed at a hastily convened meeting of non-executive directors, has prompted criticism of Achleitner and his role at a bank that was once the flagship of Europe’s top economy but is now floundering.
It is the second change of CEO under his watch. “Achleitner ignored things for too long. He should have given the bank direction,” said Hendrik Leber, a fund manager at one of the bank’s shareholders, Acatis Fondsmanager.
A spokesman for the bank declined to comment. Achleitner had discreetly prepared for the change over many months, the people who spoke to Reuters said. But for those outside the small circle of managers involved, the announcement came unexpectedly, prompting some to question why Cryan had to go as the bank continues a delicate turnaround.
“Why was it necessary to appoint a new CEO at this point?” said
Hans-Christoph Hirt of Hermes EOS, which represents pension funds and other investors, adding that Achleitner had “overseen a number of strategic U-turns” and multiple management changes.
Some of the group’s largest shareholders also have similar misgivings about the decision to appoint Sewing, a manager who joined the bank from school and who had a low profile before being appointed as chief executive.
One person with knowledge of the meeting where directors were told of the CEO switch said Achleitner presented the change as a done deal, offering no alternative candidate and leaving them with little choice but to reluctantly agree.
Achleitner, the person said, appeared “irritated” by the discord
during what was a tense three-and-a-half hour gathering, where directors, including those representing large shareholders, dialled in from around the globe.
Translation of the conversation into different languages further drew out the discussion, as Sewing waited in a room nearby in case he should be asked to join. Achleitner has defended his action. “There was lack of speed by the management board in making decisions and executing them,” he told a German newspaper this week.
Others echo this view. “John Cryan is nice, a really lovely guy,” said one former colleague, who worked with him at Deutsche. “If you tell him there are risks associated with making cuts, he wants to analyse those risks to death before going ahead. Real cost-cutters say: ‘I need 100 heads to roll in this division’.” Cryan, a British former UBS banker, could not be reached for comment.
But dissatisfaction over the manner of his replacement may have repercussions for the Austrian financier – Achleitner had preferred to discreetly exercise his influence but now finds himself centre stage. Achleitner is already facing a backlash at the bank’s annual shareholder meeting on May 24.