A hedge fund led by Rudolf Bohli wants to join GAM's board and enact wide-ranging changes at the Swiss asset manager. A hugely influential shareholder representative has just backed him.

Hedge fund RBR is demanding that GAM slash jobs in management, operations, management, auditing, IT, finance, legal and compliance in order to save chop 100 million Swiss francs off the firms's spending.

RBR, which also wants to elect three new board members and replace Chief Executive Alexander Friedman with another candidate, has already appealed to shareholders directly.

RBR, led by Rudolf Bohli, has been heard, at least in part: influential U.S. shareholder advisor ISS is urging its clients to back the hedge fund in several key points, finews.com has learned.

Dismissed as Unrealistic

The American proxy group has backed Bohli's election to GAM's board, as well as that of former investment banker Kasia Robinski, who RBR is also proposing to the board as a member of the pay committee.

The hedge fund has persuasive arguments for board-level changes, ISS said. The shareholder advisor also supports voting out Diego du Monceau as a board member and member of the pay committee.

GAM has taken the opposite position, rejecting both Bohli and Robinski's election, and backing du Monceau's re-election. The Zurich-based asset manager has ignored other RBR demands, with CEO Friedman underscoring his turnaround efforts in a recent press interview and dismissing the hedge fund's plans as unrealistic.

Head-to-Head Fight

This means GAM and RBR will go head-to-head at an April 27 shareholder meeting. Unlike pay votes, the board elections are binding.

«Each of RBR's board candidates is inextricably linked to the radical plan with unrealistic cost-cutting goals and no growth perspectives jointly presented by RBR and those candidates,» a spokeswoman for GAM said in a statement.

«Given that neither ISS nor other independent advisers support RBR's plan, we continue to urge shareholders to vote against RBR’s candidates.»

Patience Run Out?

ISS also rejects GAM's pay plan, which has been controversial in other quarters as well. The American firm is particularly irked that salaries and bonuses don't reflect GAM's business realities, according to its voting recommendation.

Friedman earned 6 million francs last year, an over 20 percent pay rise on the year, despite a sluggish performance from GAM. 

The asset manager isn't the only firm that ISS has taken an opposing stance to. finews.com reported on Tuesday that the proxy advisor will oppose Credit Suisse on almost all pay points, a sign that even big shareholders' patience with the turnaround promises of finance firms has run out.