Swiss banks are gearing up for a slew of testy shareholder meetings. Bankers are getting an inadvertent breather, as a global pandemic puts the kibosh on contentious bonus debates.
In coming weeks, shareholders will have invitations in their mailbox: big national champions like Credit Suisse, as well local lenders such as Zuercher Kantonalbank are required to send a detailed agenda of annual meetings several weeks in advance.
This year, bankers are getting a break: Urs Rohner, facing shareholders for the second-to-last time as chairman of Credit Suisse, won’t be subject to the usual hours-long grilling by shareholders or any direct criticism about a espionage scandal, or a hefty kiss-off for ex-CEO Tidjane Thiam. As Bank Linth, a local lender, told shareholders recently, this year’s shareholder meeting will be «limited to the operationally and legally necessary points.»
Grilling vs Festive Day
Those include approving the profit statement, paying a dividend, and reelecting directors. Shareholder meetings, of course, won’t take place in person– Switzerland is under an effective lock-down amid a surge in cases of COVID-19, or coronavirus.
For banks, the events can be an hours-long annual ritual as Swiss shareholders to air their grievances (pay is a recurring theme) – or a festive day out full of music, chatter, and finger food and drinks interspersed with voting, as is the case with many local lenders like «Hypi» Lenzburg, led by CEO Marianne Wildi.
Tricky Events
Swiss drugmaker Roche last week scrambled to avert shareholders from showing up for its annual meeting hours after the Swiss government banned assemblies. «If I was UBS, I’d only have present the chairman, the CEO, two proxy voting representatives, and a corporate secretary to take the minutes,» Roche’s chief lawyer Gottlieb Keller told finews.com. Anybody else – like top management or directors, especially those from abroad – is simply superfluous, he noted.
UBS and Credit Suisse plan to stick with their AGMs – scheduled for April 29 and 30, respectively – but haven’t detailed how they plan to address any shareholder concerns. No shareholders in the room mean no speeches – which banks traditionally use to curry favor with investors.
The meetings are likely to be live-streamed, a clunky process which all but guarantees shareholders won’t have a voice except to vote through the independent proxies. Both would have faced a tricky event: UBS’ investors last year denied directors and top management an all-clear because of a high-stakes French criminal trial.
Smart Contract Voting?
At Credit Suisse, Chairman Rohner is almost certain to rack up enough support for another year, but only narrowly after he opposed the Swiss bank’s biggest shareholder last month in a C-suite scuffle over succession. A lighting rod at the best of times, Rohner will also escape closer shareholder scrutiny over his role in events leading up to the espionage scandal, or payments to ex-CEO Thiam for leaving. He is set to hand over next spring.
Technology that could help – like proxy voting via smart contracts built by digital asset exchange SDX – isn’t ready. Switzerland doesn’t have a widely-accepted standard, for one – and would need all shareholders to possess a digital ID.
Back to Normal Next Year
Keller, the Roche lawyer, said banks would well-advised to invite thorny issues from shareholders in advance – and to address them. «To be honest, there’s been a lot of talk about pay and bonuses in recent years – and not much came out of it,» he said.
«I’d advise companies like UBS to take their critics seriously, tell them they can send questions in, and that the company will hold a regular shareholder meeting again next year.»
