After another year of losses, GAM is once again restructuring the top management. 2019 resulted in a consolidated loss of CHF 3.5m, compared to a loss of CHF 916.8m in the catastrophic year 2018.
Group Management Board (GMB) will receive no bonus for 2019 and CEO Pete Sanderson (picture above) has requested to forego a contractual fixed cash award due this year. Also BoB will propose no dividend for the financial year 2019, the bank announced.
Thomas Schneider will be proposed at the next Annual General Meeting on 30 April 2020 for election as a new member of the BoD, subject to the customary regulatory approval.
Schneider is currently chairman of the BoD for listed Swiss bank Basellandschaftliche Kantonalbank. He has extensive experience in auditing and advisory and brings in-depth knowledge of the Swiss market, having spent 27 years with Ernst & Young working with a variety of Swiss and financial services companies, including asset management institutions. After joining Credit Suisse in 2014, he was chief auditor for the International Wealth Management division and, most recently, head of Internal Audit for Credit Suisse Switzerland AG, positions he held between 2014 and 2018.
He will replace Hugh Scott-Barrett, who has decided not to stand for re-election at the upcoming AGM.
Changes to Board
In order to streamline decision making and to provide a clearer allocation of responsibilities, the membership of the Group Management Board will change with effect from 1 April 2020 subject to regulatory approval, and include Peter Sanderson, Group chief executive officer, Richard McNamara, Group chief financial officer, Elmar Zumbuehl, Group chief risk officer and Steve Rafferty, Group chief operating officer.
The current members stepping down from the GMB (Tim Rainsford, Group head of Sales and Distribution; Rachel Wheeler, Group general counsel; Martin Jufer, Group head PLF and region head Continental Europe) will continue to have key senior roles in the revised senior leadership team, which is also being expanded to ensure greater connectivity and coordination across the firm.
New Strategy plan
Sanderson also announced the strategy to make GAM fit for the future. The strategy is based on three pillars: efficiency, transparency and growth with clear financial targets, to be achieved for full-year 2022, subject to market conditions:
Efficiency: realign GAM's cost base and improve the client experience: incremental cost savings (compared with 2019 exit run rate) of CHF 40m (CHF 30m by end-2020 and another CHF 10m by end-2021), resulting in total savings in excess of CHF 80m and helping to achieve a 30% operating margin.
Transparency: increase clarity, including recognition of the benefits that the Private Labelling business creates for stakeholders and accountability, including better aligning GAM with its stakeholders; a compensation ratio in line with the previous target of 45-50%.
Growth: build on GAM's core strengths to attract and retain the best talent, incentivised over the long-term, to grow the business and drive sustainable AuM inflows; underlying pre-tax profit of CHF 100m.