In rare German boardroom fight, broker CEO exits with jab at founder
Business
In rare German boardroom fight, broker CEO exits with jab at founder
FRANKFURT (Reuters) - A rare public boardroom dispute in Germany escalated on Friday, with the outgoing CEO of a major online broker criticising a company founder who had publicly campaigned against him.
Frank Niehage, the CEO of broker FlatexDegiro (FTKn.DE), opens new tab, this week suddenly announced he would leave after 10 years at the helm of the firm that operates in 16 countries with 2.7 million customers.
The departure followed sharp criticism from the company's founder and major shareholder, Bernd Foertsch, who told a business magazine last month, opens new tab he would vote against Niehage and the company's chair at an upcoming shareholder meeting due to strategic mistakes, such as "sleeping through a cryptocurrency boom".
It is rare in the staid corporate culture of Europe's largest economy for such disagreements to occur in public rather than behind closed doors.
Niehage told a regularly scheduled earnings call with analysts on Friday he had resigned to "avoid further damage" to the company's reputation and to "resolve tension" with Foertsch.
He accused Foertsch of trying to get a seat on the supervisory board "through the back door, claiming to know better what's good for the firm", and called on shareholders to vote in favour of the chair at their meeting.
"Please register yourself for the upcoming annual meeting and exercise your voting power," Niehage said. "It is like in democracies: if you don't vote, you support minorities."
Niehage, Foertsch and a FlatexDegiro spokesperson did not respond to requests for comment. The chair, Martin Korbmacher, declined to comment.
The broker, which was fined by its regulator in 2023 and told to fix "serious shortcomings" in its internal controls, has steadily increased its profits over the past year.
A key inflation report favored by the Federal Reserve showed that U.S. prices rose moderately in March,
Guido Moellering, director and chair of the Reinhard Mohn Institute of Management, said that the deep entanglements of board members and executives in the country, known as Germany Inc., has kept such "conflicts out of the public eye".
Niehage's jab is "retaliation" for public criticism from Foertsch, a publishing entrepreneur who "may not have internalised the behind-closed-door-culture," Meollering added.
