Josef Ackermann’s ‘Late Remorse’ May Be Premature: Review
The title is unfortunate too. The invitations to the presentation of “Spaete Reue” (Late Remorse) landed weeks before the Aug. 26 death of Pierre Wauthier, the chief financial officer of Zurich Insurance Group AG. (ZURN) Wauthier named Ackermann in his suicide note.
Ackermann, 65, resigned as chairman of Zurich, though he said at today’s book presentation in Berlin that Wauthier’s dying words of blame were unfounded and their business dealings were always “factual and marked by mutual respect.” He also announced today that for unrelated reasons, he is stepping down as deputy chairman of Siemens AG’s supervisory board.
The whole Zurich incident casts a shadow over an illustrious career and a legacy the book was supposed to help cement. It begs the question whether there will be a “Late Remorse II.”
Stefan Baron was a close aide to Ackermann for the last five years of his reign at Deutsche Bank, Germany’s largest bank, and still advises him. He wrote the book with his blessing -- though Ackermann said he had no influence over the end result and read it “in great suspense” in one night.
Though an admirer, Baron is journalist enough to omit none of the rockier episodes of the last few years and to quote Ackermann’s critics, mostly the media. A former editor-in-chief of WirtschaftsWoche magazine, he chronicles the banking crisis with pace and drama. Later chapters focusing on Ackermann’s growing political role in the debt crisis and the endlessly tedious debate over his succession are an anti-climax.
The remorse of the title refers to Ackermann’s acknowledgement that the banking industry took a wrong turn. He was, Baron writes, one of the first bankers “to practice self-criticism and push for comprehensive reforms.”
Borrowing the language of bankers, Baron says that Ackermann’s “popularity curve had a great deal of upward potential” when he started working with him in 2007. Long before the bankruptcies and bailouts, Deutsche Bank was Germany’s “most hated company” and Ackermann the “ugly face of capitalism” in the German media, Baron writes.
Much of that dated back to 2004. Fighting a suit involving millions in bonuses paid to executives of Mannesmann AG as a reward for its takeover by Vodafone Group Plc., Ackermann was photographed flashing a victory sign in court. A storm of outrage followed.
Ackermann drove Deutsche Bank’s transformation from a nationally focused institution to one of the world’s top investment banks. He pushed the company to achieve record profits, yet also to develop and sell some of the complex, opaque financial products that precipitated the crisis.
As the banking crisis wore on and Deutsche Bank faced mounting lawsuits, Ackermann grew pensive, Baron writes. A defining moment came in Seoul at a G20 meeting, when he was sitting next to South Korean President Lee Myung-Bak at dinner as news came that the stock market plunged in the last minute of trading because of a Deutsche Bank derivative transaction.
“Something broke inside him,” Baron writes. “He was deeply disappointed and felt betrayed.”
Baron’s view is that Ackermann’s years in Germany uprooted him from the values instilled by his hard-working Swiss family. The crisis, as Baron describes it, was a jolt that reset his moral compass.
Ackermann responded fast, scaling back Deutsche Bank’s riskier businesses and building its domestic banking, Baron writes. Deutsche Bank escaped relatively unscathed and never needed to borrow from the German government’s crisis fund.
Meanwhile, its chief executive grew in political stature. The Swiss native at first had little understanding of the full sweep of his role as Deutsche Bank CEO, traditionally a “kind of shadow chancellor of the republic,” Baron writes. He became a fixture on the euro debt-crisis scene, serving as a mediator between government and business.
Baron describes a life lived in airplanes. Ackermann’s Frankfurt desk was empty, his rented four-room apartment in the city purely functional. He didn’t eat regularly and slept little, switching time zones frequently.
His favorite hotel meal was curried sausage and fries with a glass of red wine, and his secretaries kept a stash of appropriately Swiss Toblerone in a drawer for emergency snacking. Leisure was a “foreign word” to the banker, whose working week was between 80 and 100 hours.
So he is hard on himself. What of speculation that he applied too much pressure on Wauthier? Baron gives evidence Ackermann can be tough on others too. Though he wants to hear the worst and pledges not to shoot the messenger, he subjects any bearer of bad news to a grilling, he says.
“Sometimes when he was particularly demanding I wondered how many people in the bank would go out of their way to avoid that stress,” Baron writes.
Calls from Ackermann could come at any time and nobody got thanks for working through the night, he says. Given the standards Ackermann sets for himself, none of this seems surprising or extraordinary.
Demanding and difficult he must be. The question is whether he pushed too hard. Ackermann is once again fighting for a reputation he must have hoped was finally safe.
(“Spaete Reue” is published by Econ Verlag, price 24.99 euros in Germany. The English-language rights have not so far been sold.)
To contact the writer on the story: Catherine Hickley in Berlin at firstname.lastname@example.org.
To contact the editor responsible for this story: Manuela Hoelterhoff at email@example.com.