– Swiss bank Julius Baer said CEO Boris Collardi unexpectedly resigned to take a new role at Pictet Group, and appointed its chief risk officer (CRO) to replace him ‘for the foreseeable future’, according to Reuters. Collardi had been CEO at the private bank since 2009 and CRO Bernhard Hodler will take on the job while the bank evaluates long-term leadership of the group, the company said.
Collardi will join Pictet as a partner and his role will include helping oversee its global wealth management business. ‘Bernhard has been appointed as CEO for the foreseeable future and, as I have said before, the board reviews succession planning on an ongoing basis,’ Julius Baer chair Daniel Sauter said.
– According to Bloomberg, Japanese Prime Minister Shinzo Abe’s administration has received high marks from local analysts for shaking up the country’s corporate management system. The nation’s companies have gradually moved to accept the need to listen to shareholder concerns and deploy record stockpiles of cash with their interests in mind since Abe took office in 2012.
But many haven’t done so willingly – and now some are fighting back. The work-around strategy that some are deploying involves buying back their own shares, then transferring them to a charitable foundation loyal to top management.
– Reuters reported that Uber executives are traveling the world to reassure regulators the company is changing the way it does business. ‘We have changed tack in so many ways in dealing with regulators, dealing with governments,’ Brooks Entwistle, Uber Technologies’ chief business officer for Asia-Pacific, said in an interview in Tokyo, where he is meeting Japanese officials and potential business partners.
– The New York Times looked at how the federal government is easing up its policing of Wall Street and the banking industry. Even without repealing broad swaths of regulation, there are subtle but steady efforts at the White House, in federal agencies and on Capitol Hill to lessen the regulatory burden on banks and financial firms since Trump took office.
For example, officials at the US Department of the Treasury are trying to make it easier for financial firms to avoid being tagged as ‘too big to fail’, a designation that subjects them to greater oversight, while the SEC is reining in the power of regional directors to issue subpoenas. In Congress, a bipartisan group of lawmakers is pushing legislation to reduce regulation on small financial institutions.
– The Financial Times reported that Unilever’s board would delay a decision on whether to choose the UK or the Netherlands for its headquarters as a result of political uncertainty in Europe. CEO Paul Polman said the board of the Anglo-Dutch company was likely to abandon its dual structure – involving two parent companies, two headquarters and two stock market listings – in favor of a single legal corporation.
The company said unification would be in the best interests of shareholders and would provide ‘greater ongoing strategic flexibility for value-creating portfolio change.’
– According to Bloomberg, Roark Capital Group agreed to buy restaurant chain Buffalo Wild Wings for roughly $2.4 billion, adding to the private equity firm’s portfolio of eateries that includes Arby’s and Cinnabon. The deal caps a year for Buffalo Wild Wings during which it lost a proxy fight with activist Marcato Capital Management in June.
Under the terms of the deal, Buffalo Wild Wings will become a closely held subsidiary of Arby’s and will continue to be operated as an independent brand, the companies said. Paul Brown, CEO of Arby’s Restaurant Group, will serve in that role at the expanded company. Funds advised by Marcato, which owns roughly 6.4 percent of Buffalo Wild Wings, have agreed to vote in favor of the acquisition, according to a statement.
– The WSJ reported that the Office of the Comptroller of the Currency (OCC) has advised Wells Fargo’s board of directors that it is considering bringing a formal enforcement action against the bank regarding improprieties in its auto-insurance and mortgage operations. In a letter, the OCC said Wells Fargo had willingly harmed its customers in those two business lines and had until November 24 to respond, according to people familiar with the matter. The letter said the bank repeatedly failed to correct problems in a broad range of areas, not just the auto-insurance and mortgage-lending units, the people said.
Wells Fargo declined to comment on the letter or its response. In a statement, the bank said there ‘is still work to be done’ and that it ‘is dedicated to making things right, fixing the problems and building a better bank.’ The bank said it is making changes ‘across our risk-management functions and line-of-business operations to rebuild the trust of our customers and team members.’ An OCC spokesperson declined to comment on a continuing regulatory matter.
– According to the Times, the London Stock Exchange Group said CEO Xavier Rolet would step down immediately, amid a public fight with a major investor that claimed Rolet was being forced out. TCI Fund Management, run by Christopher Hohn, claimed the exchange had forced Rolet to retire early, and waged an aggressive campaign to keep him in place.
‘Since the announcement of my future departure on October 19, there has been a great deal of unwelcome publicity, which has not been helpful to the company,’ Rolet said. ‘At the request of the board, I have agreed to step down as CEO with immediate effect.’ The stock exchange operator said CFO David Warren would serve as interim CEO until a successor was chosen.
– Judge Timothy Kelly of the US District Court for the District of Columbia sided with Trump in a legal battle over who should be in charge of the CFPB, allowing White House budget director Mick Mulvaney to serve as its acting head, according to Reuters. Kelly ruled against Leandra English, deputy director of the CFPB, who claimed to be its rightful interim director. He denied her request for a temporary restraining order to block Mulvaney’s appointment.
‘Undeniably, the CFPB was intended to be independent, but it is part of the executive branch,’ Kelly, a Trump appointee, said. English’s lawyer said he would ultimately seek to take the case to a higher court.
– US banks are no longer too big to fail and Federal Reserve bank rules are ‘tough enough,’ Fed governor Jerome Powell told senators in a hearing to review his nomination to head the central bank, the WSJ reported. Powell broadly defended the regulatory regime he and other Fed officials have adopted since the financial crisis, but endorsed changes including a bipartisan Senate proposal to offer community and regional banks relief from certain regulations.
‘It doesn’t help anyone for banks to waste money, if you will, to spend more money than they reasonably need to spend to accomplish the safety and soundness objectives,’ he said, referring to a broad regulatory review by the Fed. ‘Those costs will fall on customers and borrowers.’
– According to the FT, US automation and building equipment group Emerson Electric has withdrawn its $29 billion bid for rival Rockwell Automation after failing to win support from investors. Emerson said it would seek small bolt-on deals alongside a $1 billion share buyback instead, after shareholders supported the Rockwell board’s opposition to the deal. Emerson went public with its bid in October, and last week raised its offer slightly and boosted the cash component, but Rockwell’s board has continued to reject the approach. Rockwell issued a statement on Tuesday morning thanking its shareholders for their ‘input and support.’
– The WSJ reported that, a week after becoming its biggest shareholder, Carl Icahn was angry with SandRidge Energy and contemplating steps to overturn the company’s board. The activist investor on Thursday sent a letter to the board criticizing its move to block him from buying more stock and taking aim at management and its pay. A SandRidge spokesperson had no immediate comment.
– According to the FT, Credit Suisse promised to give half its profits back to shareholders once it completes a three-year restructuring program launched in 2015, and unveiled profit and cost-cutting targets for the next three years. CEO Tidjane Thiam has focused the Swiss bank on managing wealthy people’s money since he took over in July 2015. Following sweeping reforms, which also shrank the riskier investment bank business, Credit Suisse was ‘nearing normalization,’ Thiam told investors.
– The WSJ reported that, according to people familiar with the matter, the Trump administration doesn’t plan to recommend stripping regulators of their power to seize and unwind a failing financial firm in a crisis – a development likely to make defenders of the Dodd-Frank Act breathe a sigh of relief.
The US Treasury, in an upcoming report on the Dodd-Frank provision known as orderly liquidation authority, plans to propose changes to the policy without scrapping it wholesale, these people said. A Treasury spokesperson declined to comment.
– According to the WSJ, a proposal by bankrupt retailer Toys ‘R’ Us to pay top executives at least $16 million in bonuses has drawn criticism from a US Department of Justice bankruptcy watchdog. Assistant US Trustee Robert Van Arsdale in court papers this week slammed the proposed bonuses for both executives and ‘non-insiders’, such as store managers, saying there is ‘no plan of reorganization on the horizon and great uncertainty as to the projected recoveries by creditors in the cases.’
The company has said it needs to pay these incentive bonuses to senior executives as it prepares for the critical holiday season. The proposed bonus plan, including the incentives for non-insiders, ‘is standard practice for a company involved in a restructuring and in this case rewards team members at all levels of the company,’ a Toys ‘R’ Us spokesperson said, adding that the company will ‘continue consulting with our creditors and the US Trustee.’
– The SEC said Mark Kronforst, chief accountant of the agency’s division of corporation finance, plans to leave the regulator in early January after 13 years with the agency. Kronforst leads the division’s office of chief accountant in providing technical accounting and reporting support to the division’s disclosure review program. He also oversees the division’s administration of the commission’s reporting rules for public companies’ disclosure of financial information to investors.
‘Mark has been a trusted adviser to multiple directors during his distinguished career at the SEC,’ says William Hinman, director of the division, in a statement. When Kronforst leaves, Kyle Moffatt, associate director in disclosure operations, will become the division’s acting chief accountant.
– Bloomberg reported that Trump plans to nominate Jelena McWilliams, Fifth Third Bancorp’s chief legal officer, to lead the Federal Deposit Insurance Corp. If confirmed by the Senate, McWilliams would succeed Martin Gruenberg. She would join other Trump appointees who are crucial to his goal of rolling back rules for the financial industry.
– Lloyd Blankfein has held out the prospect of being replaced by co-CEOs at Goldman Sachs, suggesting that the firm is contemplating a break from the structure in place for the past 18 years, according to the FT. ’Goldman Sachs as a firm has a long tradition of co-CEOs,’ Blankfein said in response to a question on succession. ‘That can work if it works and people get along, but it doesn’t necessarily have to work. So I would say it’s not a guarantee.’
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
