Credit Suisse Board Backs Thiam Ahead of Spy Scandal Decision
Credit Suisse Group’s board is backing CEO Tidjane Thiam ahead of meeting that will determine who takes blame for spying scandal.
(Bloomberg) -- Credit Suisse Group AG’s board is backing Chief Executive Officer Tidjane Thiam ahead of a crucial Monday meeting that will determine who takes the blame for a botched spying scandal, according to people familiar with the matter.
Recent expressions of support by shareholders for senior executives is swaying the board, which has few obvious successors for Thiam should he be ousted, the people said, asking not to be identified as the matter is private. Credit Suisse, whose investigators had been focusing on the role of Chief Operating Officer Pierre-Olivier Bouee, are still weighing whether any executive at the board level will be punished, the people said.
Credit Suisse is seeking to draw a line under one of the worst scandals in its recent history after the bank hired a private detective agency to shadow a former executive because of fears he’d poach employees after moving to UBS Group AG. The surveillance became front page news in Switzerland, forcing Credit Suisse to move ahead rapidly with a probe as some Swiss press expressed outrage and called for Thiam’s ouster.
Credit Suisse declined to comment.
As the tabloid scandal erupted into a threat for Thiam, the tone of the probe shifted after a top shareholder and other investors supported the CEO and other senior executives. Their support stems in large part from the fact that he’s overseen a successful restructuring of the bank.
The bank’s board is set to meet on Monday to discuss the findings of the investigation by law firm Homburger into the affair and is expected to make its conclusions public the next day.
The most vocal and public expression of support came late last week from David Herro, deputy chairman of influential Chicago-based Harris Associates, Credit Suisse’s biggest shareholder with an 8.1% stake. He said that the bank was justified in taking action to protect itself from possible poaching -- as long as it was legal -- and that it “would be damaging to CS and its stakeholders to lose any member of senior management over this issue.”
His comments were echoed by Ricky Sandler, Chief Executive Officer of Eminence Capital, which owns Credit Suisse shares. He pointed to Thiam’s restructuring efforts during recent years. “Losing the CEO or any other members of senior management because of this would be a very unfortunate outcome for shareholders and other stakeholders,” he said. “ We hope that media reports are not overly influencing the Board of Directors.”
The saga has broken a period of relative calm for Thiam after he navigated a three-year overhaul that saw him pare back volatile trading in favor of wealth management and begin to see stabilization at the global markets unit. The shares have gained about 14% so far this year, outperforming UBS -- its biggest rival -- which has seen its stock decline about 3%.
To contact the reporters on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net;Jan-Henrik Förster in London at jforster20@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen
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