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Deutsche Bank's chairman says new CEO Sewing was board's first choice

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Deutsche Bank's chairman says new CEO Sewing was board's first choice

Deutsche Bank AG's supervisory board did not settle for its new CEO Christian Sewing as a second choice but chose him because he was the best candidate to replace former chief John Cryan, despite media speculation suggesting otherwise earlier this year, Paul Achleitner, the supervisory board chairman of the German group told shareholders at its annual general meeting May 24.

Cryan had been under pressure because of Deutsche's slow progress toward its five-year restructuring plan, which he had spearheaded since late 2015. He was ousted by the supervisory board after a hasty meeting over the Easter weekend at the beginning of April. However, the board had not intended to handle the CEO change in this way, Achleitner said.

"I personally ... had hoped that the change at the helm of our company [was] going to happen in the run-up to today's AGM, in a constructive manner," the chairman said. Instead, the board appointed German retail banking head Sewing as CEO to succeed Cryan on April 8.

The situation during the Easter break threatened further harm to the bank "both within the organization and its interaction with clients," Achleitner said, so the board decided to act immediately. The chairman criticized leaks from the supervisory board and said the bank will investigate these because the board cannot work in an atmosphere of mistrust.

Sewing's appointment took place six days after the first media article was published, the chairman said. This period was necessary to complete all internal discussions with the supervisory board and external negotiations with the regulators. "Only when we completed these discussions we informed the public at large in a proper and a pertinent manner. Although I understand the critical wish for earlier external communications," Achleitner said.

Board support for Sewing

The decision to change the CEO was indeed forced by the public debate, but it was nonetheless supported by the majority of the board, according to Achleitner. "If it becomes clear that the strategic goals are at risk, the supervisory board needs to take quick and determined action," the chairman said.

However, the rushed move overshadowed the achievements of former CEO Cryan, whom Achtleirner wanted to thank for his service at the bank now. "He was the right person for the bank. He assumed responsibility for the bank's operations at a very difficult phase almost three years ago when the bank needed a new, credible fresh start ... A fresh start which no internal successor could have brought about at the time. Mr. Cryan excellently performed this mission and triggered fundamental change," the chairman said.

Achleitner also commented on media speculation about the potential candidates Deutsche Bank had considered to replace Cryan, which, according to reports, included Standard Chartered CEO Bill Winters and UniCredit CEO Jean-Pierre Mustier. "All of a sudden people were presented as candidates who had never been candidates. Whoever may have benefited, it certainly harmed our bank and the reputations of the persons involved, not least John Cryan and myself," he said.

The supervisory board was firmly convinced that the person at the helm of the company should have in-depth knowledge of Deutsche Bank in order to push the required transformation forward, and this is why it had a clear preference to internal candidates. "A professional personnel decision however also includes comparing these internal candidates with feasible, potential external alternatives and we have done so with the support of an external expert," Achleitner said. At the end there were two external candidates, "whose names ... fortunately, were not the subject of media speculation," he added.

However, Sewing was chosen because of his 30-year career at Deutsche Bank. "[He] is our first choice. We did not choose him because he is a retail banker, or because he is an investment banker but because he is a Deutsche banker. Christian Sewing is Deutsche Bank through and through and he knows the organization in all its parts from many perspectives far better than hardly anybody else," Achleitner said.