The supervisory board of Commerzbank has agreed to terminate the contract of its chief executive Martin Zielke, after he and chairman Stefan Schmittmann suddenly announced their resignations on 3 July.
The pair are understood to have looked to jump ship after coming under pressure from a top investor and a German trade union, according to media reports.
In a letter to the supervisory board in June, US private equity firm Cerberus Capital Management, a top shareholder in the bank, called on the management to replace two board members, demanding “significant change at the supervisory board, the management board and the company’s strategic plan,” the FT reported.
The duo resigned shortly after a clash with labour representatives, who blocked a supervisory board meeting to discuss the future of Germany’s second largest bank and a possible cut of 12,000 jobs, Reuters reported on 5 July.
Comprehensive overhaul needed
Stefan Wittmann, a Verdi union official who sits on Commerzbank’s supervisory board, told Expert Investor: “One can only speculate as to what motivated the chief executive to resign. We assume that the withdrawal was a matter of time since the failure of the Deutsche Bank merger, as it was the actual plan that we supported and which had no alternatives.”
Schmittmann told Commerzbank in an internal interview that the resignation was not a result of investor pressure: “It is perfectly clear that Commerzbank’s 5.0 strategy was perceived as not being ambitious enough; and that it definitely lacked sufficient acceptance in the capital markets. This is also reflected in our current share price, and Martin Zielke and I take responsibility for this.”
Zielke commented: “I would like to open the way for a fresh start. The bank needs a profound transformation and a new CEO, who will get the necessary time from the markets to implement a strategy.”
Shares of Commerzbank rose 4.6% to €4.55 in the afternoon on 10 July.
Wittmann commented that “the bank’s performance was probably worse [than its peers] because its employees had no clear prospects and no transparent, continuous strategy with which to engage”.
Zielke will continue to serve in his role until 31 December and Schmittmann until 3 August.
The Swiss Tobias Guldimann is a possible candidate to succeed as chairman, the Handelsblatt reported.
Wittmann commented: “We don’t believe that there will be a longer period of uncertainty in the supervisory board about the succeeding chairman. We are confident, however, that a decision will be taken at another special meeting on 3 August.
“When it comes to the new chief executive, the bank is well advised to exercise care over speed. A good and lasting solution takes time.”