Credit Suisse board backs CEO ahead of scandal decision

Bloomberg

Credit Suisse Group AG’s board is backing CEO TidjaneThiam ahead of a crucial meeting that will determine who takes the blame for a botched spying scandal, according to people familiar with the matter.
Recent expressions of support by shareholders for senior executives is swaying the board, which has few obvious successors for Thiam should he be ousted, the people said, asking not to be identified as the matter is private. Credit Suisse, whose investigators had been focussing on the role of Chief Operating Officer Pierre-Olivier Bouee, are still weighing whether any executive at the board level will be punished, the people said.
Credit Suisse is seeking to draw a line under one of the worst scandals in its recent history after the bank hired a private detective agency to shadow a former executive because of fears he’d poach employees after moving to UBS Group AG. The surveillance became front page news in Switzerland, forcing Credit Suisse to move ahead rapidly with a probe as some Swiss press expressed outrage and called for Thiam’s ouster.
Credit Suisse declined to comment.
As the tabloid scandal erupted into a threat for Thiam, the tone of the probe shifted after a top shareholder and other investors supported the CEO and other senior executives. Their support stems in large part from the fact that he’s overseen a successful restructuring of the bank.
The bank’s board was expected to meet on Monday to discuss the findings of the investigation by law firm Homburger into the affair and is expected to make its conclusions public on Tuesday.
The most vocal and public expression of support came from David Herro, deputy chairman of influential Chicago-based Harris Associates, Credit Suisse’s biggest shareholder with an 8.1 percent stake. He said that the bank was justified in taking action to protect itself from possible poaching and that it “would be damaging to CS and its stakeholders to lose any member of senior management over this issue.”
His comments were echoed by Ricky Sandler, Chief Executive Officer of Eminence Capital, which owns Credit Suisse shares. He pointed to Thiam’s restructuring efforts during recent years. “Losing the CEO or any other members of senior management because of this would be a very unfortunate outcome for shareholders and other stakeholders,” he said. “ We hope that media reports are not overly influencing the Board of Directors.”
The saga has broken a period of relative calm for Thiam after he navigated a three-year overhaul that saw him pare back volatile trading in favour of wealth management and begin to see stabilisation at the global markets unit. The shares have gained about 14 percent so far this year, outperforming UBS which has seen its stock decline about 3 percent.