Deutsche Bank Chairman Rebuked by Investor Group Before AGM

(Bloomberg) -- Deutsche Bank AG Supervisory Board Chairman Paul Achleitner may not have acted in the best interest of investors when replacing the bank’s chief executive, a prominent shareholder advisory firm said Monday.

As a result, the bank’s shareholders should consider withholding approval from the lender’s supervisory board at the next annual general meeting and they should also “carefully consider” a motion to remove Achleitner, Ivox Glass Lewis, a German subsidiary of Glass Lewis, said in its recommendations for the lender’s annual general meeting on May 24.

Repeated changes of top management -- the bank has replaced its CEO three times over the past six years --“raise questions” about Achleitner’s “choice of candidates or the cooperation with the chosen candidates,” Ivox Glass Lewis wrote in the report.

Deutsche Bank fired its last CEO, John Cryan, in early April, less than three years after appointing him to the post. It replaced him with a German national and company veteran, Christian Sewing, after news outlets -- including Bloomberg -- reported that Achleitner had been sounding out potential external candidates to succeed Cryan. Several investors have since criticized Achleitner’s handling of the situation.

When Ivox Glass Lewis expresses criticism of motions at annual shareholder meetings, “it’s usually because of procedural issues such as a board member’s missing CV,” said Anke Zschorn, director of research at Ivox Glass Lewis and the report’s author. “The case of Deutsche Bank’s supervisory board and Paul Achleitner is different,” she said, referring to -- among other things -- the chairman’s role in the CEO succession.

Ivox Glass Lewis effectively endorsed the call of Deutsche Bank’s management board to shareholders to reject another motion on the agenda, which seeks to split the investment bank division from the retail unit. The management board has rejected that notion, saying the move would destroy value for shareholders. Deutsche Bank last week announced its intention to cut back its investment bank, along with various country-specific operations worldwide, but pledged to keep a global presence to support the requirements of its corporate and institutional clients.

To contact the reporter on this story: Steven Arons in Frankfurt at sarons@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Geoffrey Smith, Darshini Shah

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