(Bloomberg) -- Commerzbank AG supervisory board Chairman Stefan Schmittmann rejected demands from Cerberus Capital Management for two seats on the bank’s highest governance body.
“We do not have any vacancies in the supervisory board and all shareholder representatives have been elected with an overwhelming majority for five years until 2023,” he wrote late Friday in a letter seen by Bloomberg. “For the time being we therefore don’t see neither the necessity nor a basis for a change.”
Schmittmann was responding to a missive sent by Cerberus to him and the board late Tuesday in which the private equity firm leveled heavy criticism at bank leadership for its poor share price performance and a perceived unwillingness to engage with the investor and cut costs.
“Neither the supervisory board nor the managing board considers the profitability of the bank as satisfactory,” Schmittmann wrote. “I am convinced that all members of the managing board have always taken your input into consideration very seriously and will also do so in future.”
A person close to Cerberus confirmed the letter was received, saying the firm is preparing its next move, and declining to comment further.
Chief Executive Officer Martin Zielke is working on a strategy update that he expects to present in August. The bank is considering raising the profitability target by at least half and doubling the existing cost-cutting target of 600 million euros ($675 million), Bloomberg has reported.
“You will find in the updated strategy many of your proposals reflected and concerns addressed,” Schmittmann wrote.
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