‘I am truly sorry.' Credit Suisse chair re-elected after apology at final shareholder meeting
Credit Suisse Chairman Axel Lehmann apologized to angry shareholders Tuesday after the ailing Swiss lender required an emergency rescue last month that left investors nursing heavy losses.
“It is a sad day. For all of you, and for us,” Lehmann told 1,748 shareholders at an ice hockey stadium in Zurich at the bank's last annual meeting as an independent company.
CEO Ulrich Körner echoed these remarks, saying he shared the disappointment of shareholders, clients, employees and the general public. “What has happened over the past few weeks will continue to affect me personally and many others for a long time to come,” he added.
The five-hour affair felt like a funeral for the lender, which has been a key driver of Switzerland's economic development over the past 167 years. Demonstrators gathered outside the venue, with some erecting a capsized boat to signify the bank's demise and protest its financing of fossil fuels.
Credit Suisse (CS) shareholders used the bank's first in-person meeting since 2019 to vent their frustration over years of mismanagement and grill Lehmann over the takeover of the Swiss lender by its larger rival UBS (UBS), which all but wiped them out.
Shareholders of both banks were denied a vote on the deal, forced through by the Swiss government two weeks ago to prevent Credit Suisse from imploding and triggering a wider financial crisis.
The first shareholder to speak on Tuesday said he was annoyed by the tight security at the event. He also said he had chosen to wear a red tie because “I and plenty of others today are seeing red.”
Vincent Kaufmann, the CEO of the Ethos Foundation, which advises pension funds and other shareholders, added that “numerous scandals” in recent years had “thoroughly ruined the reputation of the bank.”
“And here we are today with our shares worth only 75 cents or so, so enormous losses for all of us,” he said. Ethos asked for further information on how Credit Suisse came to be valued at $3.25 billion, a 60% discount to its market value before the deal was announced.
Another shareholder remarked that the price of one Credit Suisse share was now not even enough to buy a croissant, when previously it would have afforded the holder an expensive bottle of French wine at a restaurant.
Shareholders reject executive pay
Lehmann was narrowly re-elected as board chairman Tuesday. His reappointment was approved by almost 56% of those who voted, while nearly 44% voted against. Shareholders also approved all other board directors standing for re-election.
But they rejected the proposed fixed compensation for the executive board, with 48.4% voting in favor, below the necessary 50%.
The proposed amount of 34 million Swiss francs ($37.4 million) for the entire executive board comprised base salaries and other benefits, such as pension payments, but not bonuses, which have been scrapped. Lehmann said that in light of the vote the broader board of directors would now have to “analyze next steps.”
Scandals and compliance failures have plagued Credit Suisse in recent years, wiping out its profit and costing several top managers their jobs.
The lender was brought to the brink of collapse after turmoil in the US banking sector reignited a selloff in its shares and caused customers to withdraw deposits.
Lehmann said he had believed that a “successful turnaround” of the bank was possible until the week the forced merger with UBS was announced. Credit Suisse unveiled a major overhaul of the bank in October.
“We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track. It pains me that we didn't have the time to do so, and that in that fateful week in March our plans were disrupted,” Lehmann said. “For that, I am truly sorry.”
He ended the meeting with an emotional farewell. “We deeply regret this. I personally am deeply saddened by this moment.”
The annual meeting comes just two days after Switzerland's federal prosecutor said it would investigate whether any of the country's criminal laws were breached by officials and executives at the two banks during the takeover proceedings.
The deal has left Switzerland's economy exposed to a single massive lender, and has required more than $200 billion in liquidity and guarantees from the government and the Swiss National Bank.
UBS will hold its annual shareholder meeting on Wednesday.
