Commerzbank Names Vetter as Chairman in Rebuke for Cerberus

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Commerzbank AG appointed Hans-Joerg Vetter as supervisory board chairman, dealing a blow to its second-biggest shareholder, Cerberus Capital Management, which tried to block the move.

The New York-based private equity firm had firmly argued against hiring the former chief executive officer of Landesbank Baden-Wuerttemberg in a letter to Commerzbank’s supervisory board, Bloomberg reported on Monday. But the group that picked him, led by the government representative Jutta Doenges, prevailed over the U.S. investment firm’s objections.

Commerzbank Names Vetter as Chairman in Rebuke for Cerberus

It’s a setback for Cerberus since it launched a campaign in June aimed at changing Commerzbank’s strategy. The push resulted in the exits of Chairman Stefan Schmittmann as well Chief Executive Officer Martin Zielke.

In its letter Monday, Cerberus suggested it wasn’t consulted on the decision to make Vetter a leading candidate for the job and it offered two alternatives for the post. It had previously said a perceived lack of willingness on the part of Commerzbank’s leadership was one reason for the firm to start its campaign.

Commerzbank Names Vetter as Chairman in Rebuke for Cerberus

Cerberus was brushed back earlier when it issued a demand for two seats on the supervisory board. That was rejected by Schmittmann, deepening the conflict between the bank and the investor.

Read More: Cerberus Activist Pivot Ejected Commerzbank Leaders Within Weeks

The investor owns 5% in Commerzbank, compared with the government’s stake of 15.6%. The bank’s share price has dropped more than 60% since Cerberus took the stake three years ago.

“I am convinced by Mr. Vetter and I’m pleased that the supervisory board has unanimously followed the motion,” Doenges said through a spokeswoman. He has “the necessary experience and assertiveness that the bank needs in this phase.”

Doenges, who heads the government that manages the government’s stake in Commerzbank, joined the bank’s supervisory board in May. Finding a new head for the board has been her first big task in that role.

Filling the chairman role is also a first step toward ending Commerzbank’s leadership crisis that started when Schmittmann and Zielke jointly announced last month they were stepping down. Schmittmann’s resignation became effective on Monday, while Zielke has said he’ll leave by the end of the year, or when the bank finds a new CEO.

A court still needs to approve Vetter’s appointment for it to take effect.

Vetter’s most urgent task as new chairman will be to find a CEO who will carry forward a new cost-cutting plan that Zielke had been working on before he quit. Commerzbank’s corporate clients head Roland Boekhout is the leading internal candidate to take the job but Chief Financial Officer Bettina Orlopp is seen as a potential alternative, and the bank is also looking for external options, Bloomberg has reported.

©2020 Bloomberg L.P.

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