Deutsche Bank's Chairman Wins Investor Backing, Not Admiration

(Bloomberg) -- Paul Achleitner can breathe a sigh of relief. For now.

Advisory firm ISS on Wednesday recommended that shareholders support the chairman of Deutsche Bank AG at its annual general meeting May 24 -- but mainly because those who want rid of him haven’t suggested anyone better.

Deutsche Bank's Chairman Wins Investor Backing, Not Admiration

The recommendation comes on the back of a string of meetings Achleitner has held with ISS and shareholders in the run-up to the AGM amid concerns over his role in a bruising ouster of ex-Chief Executive Officer John Cryan. Another Deutsche Bank investor also decided to vote for Achleitner at the AGM after a personal meeting with him this week, according to a person briefed on the matter.

A Deutsche Bank representative declined to comment on the situation.

Heavy criticism by some investors of Achleitner came to a head when another proxy advisory firm, Glass Lewis, recommended that shareholders oppose him. Two other top 10 investors of Deutsche Bank said they haven’t yet decided how they will vote, according to people briefed on their thinking.

However, ISS and two investors said that a key reason for their likely support has more to do with a lack of better alternatives than the achievements of Achleitner himself. ISS said some shareholders may decide to vote against the supervisory board “in light of the innumerable concerns regarding the bank’s leadership.”

“We believe removing the chairman would create a potentially dangerous leadership and knowledge vacuum within the bank” that could have a “more devastating impact” than allowing Achleitner to stay, ISS wrote in its opinion, urging shareholders to give the chairman “one last chance.”

If things at the bank haven’t improved by next year’s AGM, ISS will consider recommending for a vote against both the supervisory and the management board, it said in the report.

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