Investor backing proved poison chalice for Credit Suisse CEO
ZURICH (Reuters) – As the chairman of Credit Suisse prepared for a crunch meeting of directors over the future of its chief executive, the vocal backing of a U.S. investor for Tidjane Thiam had unintended consequences, helping seal the ousted CEO’s fate.
Relations between the two men had soured over a long-running power struggle, according to sources with knowledge of the situation, but as chairman Urs Rohner considered a possible successor for Thiam in recent weeks, public criticism of Rohner by U.S. shareholder Harris Associates backfired.
“Thiam has worked to clean up the messes that Rohner presided over,” Harris deputy chairman David Herro had told Reuters earlier this week.
“It should be obvious … one of the two has to go,” he said. “It shouldn’t be the CEO.”
Another supporter of Thiam, U.S. hedge fund Eminence Capital, wrote to Rohner and criticized the board for its “utter lack of support for its CEO”, in a letter seen by Reuters this week.
The show of support for Thiam antagonized the board to such an extent that they resolved to remove the CEO, two people familiar with the matter said.
Rohner, who canvassed other major shareholders to win their backing, could count on the support of vice-chairman Severin Schwan, said one of the sources.
Schwan, also the head of drugmaker Roche, saw the need to take swift action against what was seen as an orchestrated effort to “hijack” the board’s authority, the person said.
Schwan told Reuters on Friday that Thiam’s position had become untenable.
“The board unanimously concluded that the CEO was not in a position anymore to restore the reputation with key stakeholders and therefore unanimously took the decisions as announced today,” he said.
Credit Suisse declined to comment and Harris did not respond to a request for comment.
The end of Thiam’s tenure at Switzerland’s second-largest bank was entwined with a spying scandal embroiling Credit Suisse and the opening of an investigation by Swiss watchdog Finma.
Although the bank had cleared its CEO of snooping on a star manager, the suicide of a private investigator involved and the emergence of a second spying case, sparked an outcry in Switzerland.
For months, relations between Rohner, a former lawyer, and Thiam, a member of an influential family from the Ivory Coast, had soured as the spying revelations came to light.
Credit Suisse has said former Chief Operating Officer Pierre-Olivier Bouee, a longtime Thiam aide, was solely responsible for arranging the surveillance. He has since resigned and not commented publicly.
The CEO took to publicly defending his own position on Instagram, against what he described as “misrepresentation” in the press, which one source said exacerbated tensions with Rohner, whose office was just yards away from Thiam’s.
“I will … use this platform to speak when false information is spread to the public,” he wrote in late January, in an uncommonly personal statement for an executive in Switzerland.
As his position looked increasingly fragile he posted a photograph alongside Ivanka Trump at Davos.
Shortly ahead of the crunch board meeting, he posted a photo of a gathering of top executives.
One of those pictured was 55-year old Thomas Gottstein, announced on Friday as the new CEO of Credit Suisse.
Thiam expressed his “regret” over the “anxiety and hurt” caused by the spying scandal while Gottstein said the bank now intended to put the episode behind it.
(This story was refiled to change to Credit Suisse declined to comment)
Reporting By John O'Donnell; additional reporting by John Miller; editing by Elaine Hardcastle
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