German investment banking company, Deutsche Bank’s Chairman Paul Achleitner has recently said that he intends to step down when his term ends in 2022. As per a Reuters report, his decision signals a new era at the German bank as it struggles to become profitable. Deutsche Bank is Germany’s largest lender.
The announcement was made to shareholders at the bank’s Annual General Meeting (AGM) on May 20. This was also the first time he has publicly said that he would not seek a third five-year term at the bank’s leadership.
“I won’t seek re-election. After 10 years in this role, it has to be enough,” Achleitner said.
Achleitner is one of Europe’s most prominent bankers, but has been facing severe criticism from some shareholders for the bank’s strategy zig-zags, management upheaval, and an 80% share price decline over the past decade.
In an effort to reverse five years of losses, Deutsche Bank is currently undergoing a major overhaul that includes streamlining its investment bank and cutting 18,000 jobs globally. The coronavirus crisis has upended its operations and cast doubt on its profit goals. The bank, after putting a halt on layoffs, has again resumed the restructuring process as Germany moves ahead in war with the coronavirus.
Glass Lewis, a leading shareholder advisory group, has called on investors to vote against ratifying the chairman’s actions for the past year at the shareholder meeting, citing “performance” concerns. Achleitner also faces for a third year in a row a vote to remove him from his post, a process he survived by a wide margin in past years.
A former partner of Goldman Sachs and Finance Chief for Allianz, Achleitner has been in search of a successor, people with direct knowledge of the matter have said. However, the bank’s supervisory board has recently expressed continued support for him.
Separately, Deutsche’s Chief Executive Christian Sewing dismissed shareholder concerns the bank would need state aid to cope with the fallout from the coronavirus outbreak. He said the bank needed to become more profitable before taking a leading role in European banking consolidation.
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