Deutsche Bank has started an informal process to find a successor for chief executive John Cryan amid mounting boardroom unrest and shareholder discontent over the bank’s performance ahead of its annual meeting in May. The search for a potential successor for Mr Cryan is at an early stage, according to people involved. “A final decision has not yet been made, but this is a topic which is being intensively discussed,” a person familiar with the situation said. Another person confirmed that a formal search for a successor had not yet begun. Deutsche chairman Paul Achleitner is calling round senior European bankers to sound them out informally on whether they could be persuaded to take over from Mr Cryan, according to people close to the situation. But many of those he has approached, including UniCredit boss Jean-Pierre Mustier and Standard Chartered’s Bill Winters, have said they are not interested. Mr Cryan, who has been in charge of Germany’s largest lender since 2015, has a contract until 2020, but has clashed increasingly with Mr Achleitner. Several members of the supervisory board now believe a change of chief executive is needed. Mr Cryan successfully listed a minority stake in Deutsche’s asset management arm DWS last week, cashing in €1.4bn, but the British banker has come under renewed pressure given the poor performance of Deutsche’s lacklustre investment bank. Shares in Deutsche last week slipped more than 10 per cent after chief financial officer James von Moltke warned that the investment bank faced headwinds in the first quarter only a few days after a more optimistic outlook for the full year that the lender gave in its annual report. Deutsche, UniCredit and StanChart declined to comment. Please use the sharing tools found via the email icon at the top of articles.
The Times late on Monday reported that Deutsche was preparing to “oust” Mr Cryan and had sounded out Goldman Sachs’ vice-chairman Richard Gnodde as a potential successor, who according to the Times “is thought to have turned down the offer”. Goldman declined to comment. “The supervisory board is shocked by the events and the leadership performance over the last four to five months”, said a person close to one senior supervisory board member. Mr Cryan had had a good start in the job, the person added, but more recently had “dropped the ball” when implementing the bank’s strategy. A person familiar with discussions on Deutsche’s supervisory board said: “Relations between John Cryan and Paul Achleitner are really not good and they have got worse recently. They just need to make a decision on the investment bank strategy — that is what is behind all this.” However, a person familiar with Mr Cryan’s thinking played down his tussle with Mr Achleitner. “Paul and John’s relationship is not as dysfunctional as it seems. There’s been occasional mutual irritation — for example after Paul brought in HNA as a shareholder — but nothing more,” adding that any potential change in leadership would be something that they would agree together and would be presented as mutually agreed. At the same time, leading shareholders, which include two Qatari funds and HNA, the troubled Chinese conglomerate, have been unhappy with the performance of the bank for some time. One top investor has made clear in private that Mr Achleitner must produce a credible chief executive succession plan before the May annual meeting to head off a public row and potential shareholder revolt. Recommended Lex Deutsche Bank: Dear John?.?.?. Large investors have long had a mixed view on Mr Cryan’s performance. While they acknowledge he made good progress on sorting out the myriad legal legacy issues, a common complaint is that the chief executive is not visionary enough. “He’s not the person who will lead the bank into the next millennium,” said a person familiar with the thoughts of one of Deutsche’s biggest shareholders. Some people on the supervisory board also question the turnround strategy unveiled in March 2017, which focuses on costs cuts. “The strategy was announced too early. Management told a story without really being aware of the details necessary for implementation.” Earlier this year, the lender took down its 2018 cost-cutting target announced a year ago and flagged that the integration of Postbank was progressing more slowly than initially planned.
Please analyze some of the issues affecting the current CEO John Cryan's future and note the role of the supervisory board which is unique to German corporate governance in making decisions (Their function is closely related to the concept of co-determination discussed later in the course ).