Three top Credit Suisse shareholders have backed chief executive Tidjane Thiam in a high-stakes power struggle with chairman Urs Rohner, which has intensified after a spying scandal at the Swiss bank.
Relations between Mr Rohner and Mr Thiam have been increasingly strained since the revelation that Credit Suisse hired a corporate espionage company to follow its former executive Iqbal Khan, who defected to arch-rival UBS last summer.
The battle has intensified ahead of a crunch board meeting on Thursday after reports emerged that Mr Rohner was drawing up a shortlist of candidates to potentially replace Mr Thiam this year. Credit Suisse declined to comment.
US-based hedge fund Eminence Capital has written to the bank’s non-executive directors to warn them against pursuing “a personal agenda with respect to the CEO rather than act[ing] in a responsible fiduciary way”. A copy of the letter, which also threatened legal action against Credit Suisse’s board, was seen by the Financial Times.
On Wednesday, Silchester International Investors, which said it owned 3.3 per cent of the Swiss bank, said that Credit Suisse chairman Urs Rohner should consider resigning if he no longer supported Mr Thiam.
On Monday, the bank’s largest shareholder, Harris Associates, warned the board against “tinkering with management”.
In a statement, Silchester said it was “not aware of any reason why [Mr Thiam] should not continue to have the full support” of Mr Rohner and the Credit Suisse board.
It added that the chairman should “retire as planned in 2021” or sooner if he “feels unable to continue to support the CEO”.
Tim Linehan, senior partner at Silchester, decided to make the letter public after Mr Rohner rejected his request to circulate it to the rest of the board before the Swiss stock market opened on Wednesday, according to a person familiar with the discussions.
Meanwhile, Eminence founder and chief executive Ricky Sandler wrote in a separate letter this week that it would “hold the chairman and the rest of the board accountable for their behaviour that is value destructive to shareholders”. Eminence said it “will not hesitate to pursue legal and or governance actions to protect shareholders’ interests”.
Silchester and Eminence’s comments follow those of the bank’s largest shareholder, David Herro, vice-chairman of US-based Harris Associates, which owns an 8.4 per cent stake.
“People don’t want to see the board or anyone tinkering with management,” said Mr Herro on Bloomberg Television on Monday. “To be very frank, it seems [like] envy from competitors or perhaps something else given that Mr Thiam looks a little bit different than the typical Swiss banker. Either one of these two rationales behind these attacks against him, to me are extremely distasteful.”
Mr Thiam, who is the first black chief executive of Credit Suisse, has radically reshaped the 163-year-old Swiss bank since joining in July 2015, expanding its wealth management division while downsizing its volatile and capital-intensive trading arm.
After a rocky start with billions of cumulative losses in his first few years, his overhaul is starting to bear fruit.
Credit Suisse’s progress under Mr Thiam has been overshadowed by Mr Khan’s departure and the spying scandal, which led to a constant string of lurid stories in the Swiss press.
Mr Thiam was initially cleared of any involvement by an external law firm, and two senior Credit Suisse executives were fired.
However, following the news that the surveillance of Mr Khan was not an isolated incident, Switzerland’s market regulator, Finma, announced launched its own formal probe into the bank.
One person familiar with Mr Thiam’s plans said whilst he was “fed up”, he would never quit the bank and that Mr Rohner would have to fire him. He attributed the campaign against Mr Thiam to “clannish” and conservative Swiss members of the board.
