Credit Suisse’s chairman was forced to defend the bank’s decision to oust chief executive Tidjane Thiam following an explosive spying scandal and a boardroom battle over his future.
Despite calls from top investors for Mr Thiam to stay in the role, the bank on Friday announced its decision to replace him with Swiss chief Thomas Gottstein. It has struggled to move on from a widening spying crisis that has gripped the Swiss banking world.
It is not clear if Mr Thiam will get a pay-off, although sources said he is likely to be treated as a “good leaver”. Up to CHF 12.7m (£10.1m) of Credit Suisse shares are currently coming his way under various bonus schemes. He is paid a base salary of CHF 3m.
Chairman Urs Rohner, who will stay on until April 2021, defended the board’s decision after Credit Suisse’s biggest shareholder, Harris Associates, reignited its calls for him to go.
Mr Rohner told Bloomberg TV he had faced “a deterioration in terms of trust, reputation and credibility among all our stakeholders”, adding that a second spying incident “made the situation worse” as it became clear “that there was more of a pattern”.
The scandal first erupted in September, when it emerged that Credit Suisse’s former wealth management boss Iqbal Khan had been chased through the streets of Zurich by detectives hired to track him after he quit to work for arch-rival UBS. The scandal led to the resignation of two top executives, including Thiam’s right-hand man Pierre-Olivier Bouee.
What the bank initially said was a rogue spying case widened as details emerged of additional instances of surveillance.
In December, it was forced to admit it spied on a second member of staff, saying its former HR chief Peter Goerke was followed by private eyes for several days in February. That prompted Swiss market regulator Finma to appoint an independent investigator to look into the crisis.
Then last week it was claimed that Mr Bouee had also ordered his head of security to infiltrate Greenpeace in 2017 after the activist group protested at the bank’s annual meeting.
Mr Thiam’s shock departure is likely to be met with outrage by key Credit Suisse investors who were vocal advocates of him remaining as chief executive.
Top shareholders such as Harris Associates, Silchester International Investors and Eminence Capital had warned the board ahead of this week’s meeting that they should not take action against Mr Thiam. Instead, they urged Mr Rohner to back the 57-year-old Ivorian or step down himself.
“Our worry is that you have this new CEO who is capable and talented but above him, a chairman who is less than capable and talented and a board who seems to just mimic, just follows blindly whatever he says,” David Herro of Harris Associates told Bloomberg TV.
As Mr Thiam prepares to hand the baton to Mr Gottstein, the focus for the board will turn to rebuilding relations with furious investors. Shares fell 4pc in Zurich before regaining most of that ground.
In exiting, Mr Thiam once again said he knew nothing about the surveillance of Mr Khan or Mr Goerke.
“I had no knowledge of the observation of two former colleagues,” Mr Thiam said. “It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place.”
The Credit Suisse board said it backed the chairman. “Urs Rohner has led the board of directors commendably during this turbulent time,” said board member Severin Schwan in the bank’s statement.
“After careful deliberations, the board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021,” Mr Schwan added.
Analysts at JPMorgan said Mr Gottstein brought “some element of continuity” given his long history with the Swiss lender, adding that the bank’s long-term performance depends on more management team turnover and any deeper friction with its shareholders.