Commerzbank Board Leans Toward Vetter as New Chairman
Commerzbank Board Leans Toward Vetter as New Chairman
(Bloomberg) -- Commerzbank AG supervisory board members are likely to propose Hans-Joerg Vetter as new chairman, turning to a retired regional bank executive to fill a power vacuum atop Germany’s second-largest listed lender.
The bank’s nomination committee could agree on suggesting Vetter as lead candidate when it convenes on Friday, according to people familiar with the matter. His appointment would then have to be approved by the entire supervisory board at a meeting on Monday, the people said, asking not to be identified discussing internal deliberations.
No final decision has been made and the plans could still change, they said. A spokeswoman for Commerzbank declined to comment.
Chief Executive Officer Martin Zielke and Supervisory Board Chairman Stefan Schmittmann in early July announced they were stepping down amid increasing criticism by the bank’s second-largest investor, Cerberus Capital Management. The biggest shareholder, the German government, accepted the resignations.
Vetter, who turns 68 in August, was CEO at regional lender Landesbank Baden-Wuerttemberg from 2009 until his retirement in 2016. During his tenure, he shrank the balance sheet by almost half while boosting profit. However, he has little experience in retail banking and hasn’t led a large, publicly traded lender.
Alternative Scenario
Should board members voice concerns about his appointment, one alternative scenario is for Vetter to join the board as a regular member first, the people said. Deputy Chairman Uwe Tschaege would automatically take over on an interim basis in that case.
The new chairman will have to navigate potentially conflicting demands of shareholders including Cerberus and the government, who have seen the value of their stake erode, and labor representatives who have vowed to fight large-scale job cuts. He or she will also need to find a new CEO for a bank that many see as in need of a drastic overhaul.
Read more: Commerzbank Battle Lines Drawn as Unions Vow to Fight
Commerzbank has said it will appoint a new board member once Schmittmann leaves the governance body on Aug. 3 and then appoint one board member as the new chair. Zielke has said he’ll leave by the end of the year or when the lender has found a new CEO.
The internal frontrunner to take Zielke’s place is corporate clients head Roland Boekhout, though Chief Financial Officer Bettina Orlopp is seen as a potential alternative, people familiar with the matter have said. The bank is also considering external candidates for the post, Bloomberg has reported.
Before Zielke quit, he was working on a sweeping new round of cost cuts in response to the strong investor dissatisfaction with his previous plan. The CEO’s new strategy would have reduced headcount by a quarter, slashed more than half of the bank’s branches and decreased its foreign presence.
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