Voting rights advisers criticize Commerzbank’s remuneration system

Frankfurt The Commerzbank is holding a virtual general meeting for the first time this year because of the corona crisis. But even without protests from small shareholders on site, there will be no shortage of critical topics at the event on May 13.

Added to this is the criticism of Commerzbank’s remuneration system. The influential voting rights advisor Glass Lewis and his German subsidiary Ivox recommend that shareholders reject the slightly modified remuneration system for members of the Management Board in March 2020. This emerges from the recommendations of both companies for the Annual General Meeting, which are available to the Handelsblatt.

“From our point of view, there is great potential for improvement in the company’s remuneration policy,” says the Glass Lewis study. The goals on which the variable remuneration of the Board of Directors depends are too vague and too focused on the bank’s performance in the past.

Anglo-Saxon investors in particular often follow the advice of proxy advisors such as Glass Lewis and ISS at general meetings. If the Commerzbank shareholders did not endorse the remuneration system, the Supervisory Board would have to deal with it again. Germany’s second largest private bank did not want to comment on this.

Criticism of the number of positions

In his study, Ivox also speaks out against the planned election of Jutta Dönges to the Commerzbank Supervisory Board. The co-boss of the finance agency is to be elected as the new representative of the federal government to the control committee in May – together with Frank Czichowski from the KfW development bank.

Dönges and Czichowski are to replace State Secretary Markus Kerber and Anja Mikus, who heads the State Fund for Nuclear Waste Management. After Commerzbank’s rescue from the crisis, the federal government still has a good 15 percent stake in the bank – and anything but satisfied with the development of the money house in recent years. In Berlin, some have hopes that Dönges and Czichowski can give new impetus to the supervisory board.

But at least Ivox has reservations about the Dönges personnel. There are no doubts about the manager’s qualifications, according to the study based on guidelines of the BVI fund association. “However, there are concerns about the number of mandates.”

Dönges is already a member of the supervisory bodies of the FMS Wertmanagement and the Deutsche Pfandbriefbank. In addition, there is her job as managing director of the finance agency, which Ivox rates as an “executive position” like two mandates.

According to this method of counting, your work on the Commerzbank Supervisory Board would be your fifth mandate. And that would be two more mandates than Ivox recommends for people in an “executive position”. “Therefore, this election should be viewed very critically,” said the voting rights advisor.

The finance agency did not want to comment on Ivox’s criticism. However, a spokeswoman pointed out that Dönges had resigned from the supervisory board of Eurex Clearing in order to avoid conflicts of interest.

In contrast to Ivox, the parent company Glass Lewis has no objection to the choice of Dönges. Other persons familiar with the personnel also consider the appointment to be sensible, after all the financial agency manages the federal government’s participation in Commerzbank and is in close contact with the institute anyway.

Dönges is also highly valued in Berlin because it closely monitored the Commerzbank strategy review. Some also believe that Dönges’ work at FMS Wertmanagement cannot be viewed as a full supervisory mandate.

More concrete goals for 2020

The core remuneration system for Commerzbank board members has existed for several years. In March it was slightly adjusted to take account of the new requirements of the second Shareholder Rights Directive (ARUG II) and the new version of the German Corporate Governance Code. The most important innovation is that a maximum remuneration for each member of the Board of Management of six million euros per fiscal year has now been fixed.

The variable remuneration of the Management Board depends 70 percent on the achievement of the Group’s goals and 30 percent on the development of the department for which the respective Management Board member is responsible. In addition, individual goals have an impact on the amount of bonus payments.

When calculating the variable remuneration for 2019, the development of the bank and the respective department in 2017, 2018 and 2019 is taken into account. Glass Lewis criticizes this approach as backward and advocates “forward-looking” goals. However, this would have the consequence that Commerzbank could not set the bonus payments for 2019 until 2021 – and that the actual payment to the Management Board would then be postponed even further.

Voting rights advisers also take a critical view of the fact that the expectations of the Management Board are not described clearly enough. The performance goals are “only presented in a descriptive manner, but not clearly disclosed,” complains Ivox. As a result, it is not understandable for shareholders whether the goals for the Management Board are ambitious enough, emphasizes Glass Lewis.

Strictly speaking, these comments do not refer to the remuneration system, but to the remuneration report, which the Annual General Meeting does not vote on this year. Nevertheless, there are employees within Commerzbank who find this criticism justified. According to financial circles, the goals for the Executive Board in the 2020 financial year have therefore already been formulated more specifically.

It is of course another matter whether there will be any significant bonus payments in view of the Corona crisis 2020. In addition, the payment of Commerzbank management is generally rather below average compared to other institutions. In the past year, the total remuneration of the Management Board amounted to EUR 12.1 million. At the neighbourhouse Deutsche Bank the executive committee received almost three times as much despite a loss of billions.

Assistance: Jakob Blume

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Investors are heavily invested, increasing the risk of a setback

Dusseldorf With regard to the stock market, investors are currently asking three questions: Has the worst survived on the financial markets? Is it time to buy the stocks that sold the most? Or should the recovery be used to make the portfolio crisis-proof for the next low blow?

Sentiment expert Stephan Heibel describes the current mood as “wait and see neutral”. The owner of the analysis house Animusx evaluates the weekly Handelsblatt survey on stock market sentiment, called Dax-Sentiment, among more than 3500 investors.

As long as the facts about the future easing measures and the economic effects do not become clearer, Heibel’s view should not see any major swings in one direction or the other: “Downside potential threatens during the reporting season, because company numbers will become the extent of the economic trend in the coming days and weeks Show damage to the quarantine measures. “

However, the sentiment analysis this week does not provide a clear recommendation to investors’ questions. “Gains in prices such as the opening on today’s trading day are an opportunity to sell one or the other position in the portfolio in order to have enough cash for subsequent purchases in the event of a setback,” says Heibel.

After the panic mood in March followed the bargain hunters, who are currently taking their speculative profits with them. Now the Dax has left its sales level again. If prices continued to rise, individual stocks and sectors would again be overvalued in Heibel’s view.

Among other things, the investment quota is queried in his more extensive Animusx sentiment survey. This rate is already back at a relatively high level. Many investors are already heavily invested again, as the overbought constitution of the US stock barometer S&P 500 shows, which has risen too high too quickly. “This means that the possibility of a continuation of the recovery rally is limited in the short term, the risk of a setback is greater,” explains Heibel. Because if many investors are already heavily invested, few potential buyers remain.

Results of the current survey

Overall, the mood among investors is divided: relief on the one hand that Chancellor Angela Merkel took the direction of “easing” on Wednesday. Disappointment on the other hand about the moderate steps.

This can also be seen from the current results of the Handelsblatt survey Dax-Sentiment. The panicky mood of the previous weeks has evaporated, but nobody can really be happy about the low stock market level. The short-term sentiment is neutral.

Accordingly, complacency is not yet back. Uncertainty remains a dominant feeling among investors, because politicians have only announced action “on sight”. How long will this exceptional situation last? Uncertainty about the answer to this question continues to cause great uncertainty among shareholders.

Investor expectations are also slipping further in the Handelsblatt survey. With a minus of 0.3 the bears dominate over the bulls for the first time since February. Because the hope for a quick end to the measures has been destroyed. Everyone will have to live with the special situation longer than we previously imagined.

Before that, investors hoped for a short shutdown followed by a violent restart including a backlog that should more than compensate for the losses in the second half of the year.

Since this hope has been destroyed, investors no longer want to invest. The willingness to invest has also decreased further. At the end of March, this sub-area of ​​the Dax sentiment reached a historic high of 5.8, since the start of the survey in September 2014, more investors than ever have been invested. Now this value has dropped to just 1.1.

Look at other indicators

The Stuttgart Euwax sentiment, in which private investors trade, has dropped to minus 11.4. That leads to the conclusion: They are buying more hedging products against falling prices again because they fear a second sell-off wave.

The professionals who secure themselves through the Frankfurt derivatives exchange Eurex, on the other hand, are betting on further rising prices. The put-call ratio has dropped to 0.8 and the average is 1.5. Institutionals have bought significantly more calls.

In the weeks before, the hedging positions of investment professionals in the United States were significantly larger than in Germany. But the put-call ratio of the Chicago futures exchange CBOE is currently returning to a normal level.

The investment ratio in US fund manager shares rose only marginally from 27 percent to 29 percent and remains at a historically low level. US private investors remain pessimistic, the bull-bear ratio is minus eight percent.

The “fear and greed indicator” of the US stock markets, calculated on the basis of technical market data, now shows a neutral state of the markets again with 44 percent. Other short-term indicators indicate that a correction in the US equity markets is imminent.

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Investors should not run after rising prices

Dax on Tuesday

Private investors do not believe in a sustainable recovery in the stock markets. The institutionalists are braver.

(Photo: Reuters)

Dusseldorf The rising prices on the stock markets also have an impact on the mood of investors: They see the current situation much more relaxed than in the past few weeks. This is shown by the evaluation of the current Handelsblatt survey Dax-Sentiment, in which more than 3,500 investors are interviewed every week.

Despite the price gains and the more relaxed mood, sentiment expert Stephan Heibel remains with his assessment. “With prices going up, investors should continue to sell positions that they would not keep in a sell-off wave,” he says.

Investors should not run after the higher prices either, because the current quotations would reflect a great deal of hope – in his view, too much hope. The new company figures in the coming days and weeks should make valuations more realistic.

For weeks, Heibel has been warning of another setback, a second sell-off wave. Because according to sentiment theory, panic selling behavior is necessary for a floor from which prices can rise again.

At the same time, expectations for the future must collapse and investor optimism will turn into pessimism. “This has not yet been observed, and therefore there can be another wave of sales at any time, which will lead the Dax back to the lows at the end of March,” says the managing director of the analysis company AnimusX. As a reminder: On March 16, the Dax had dropped to 8255 points.


But optimism about the future is already waning significantly, contrary to the rising prices. According to Heibel, this could enable a second scenario on the markets.

Because if prices rise faster than many investors can take new positions, the price increases are considered unsustainable. Investors then believe in a technical rally, an intermediate recovery in the intact downward trend. Their belief in rising prices continues to fall until the pessimists gain the upper hand.

In this scenario, there would also be a second sell-off wave. “But it is no longer absolutely necessary for the Dax to slide back to the lows from the end of March,” explains Heibel.

In which cycle phase do you think the markets are currently in?

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In this case, pessimists could gain the upper hand at a significantly higher course level, which would create a further prerequisite for sustainably rising courses. Why is pessimism so important? Every sustainable rally needs pessimism, because then only a few investors have bought and a lot of capital can still be used. A rally usually runs along a wall of doubt, is called a stock exchange wisdom, which is also an important part of sentiment analysis.

The DAX plus of eleven percent in the past trading week brightened the mood among investors by leaps and bounds. This shows the current evaluation. After the doomsday mood of the past few weeks, the sentiment currently only reaches a value of minus 0.5, which is almost neutral.

The leading German index has lost around 20 percent of its value since the beginning of the year. But that’s no longer the yardstick. Investors are looking to the gradual lifting of quarantine measures.

Have your expectations for the Dax been met in the past week?

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But the survey participants remain unsettled. The value of minus 2.8 when asked whether the expectations for the past trading week have been met remained unchanged despite significant DAX gains. This value usually increases – and with it the complacency of the investors – in parallel with higher share prices.

“Investors apparently missed the recovery in the Dax,” concludes the AnimusX managing director. Even those who got out early didn’t get back in and now have to watch the higher courses.

Future expectations are at 1.0, the lowest level since the outbreak of the corona crisis. The optimism of the past few weeks, when investors still viewed the crash as a cheap buying opportunity, is fading. There are concerns about whether a restart of our economy can really succeed so smoothly.

And these concerns also prevent investors from wanting to take new positions in the next two weeks. Willingness to invest has dropped to 1.7, which is also the lowest level since the outbreak of the corona crisis.

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Institutional investors and private investors show an opposite picture. The investor professionals who trade on the Frankfurt derivatives exchange Eurex are comparatively brave. They sold their hedges against falling prices in the rally last week and are more likely to speculate on further increases in prices.

Private investors, on the other hand, do not believe in a sustainable recovery on the stock markets and use put notes to hedge against a renewed sell-off wave.

In the United States, the hedging positions were also partially released, but there is still a long way to go in the long term on the net. The investment rate among US fund managers remains at a comparatively lower 24 percent.

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US private investors expect prices to fall: the bull / bear ratio stands at minus 15 and indicates a clearly “bearish” mood.

The “fear and greed indicator” of the US stock markets, calculated on the basis of technical market data, only signals moderate fear with a value of 33 percent. After the extreme fluctuations in the past few weeks, in which the value was only slightly above zero, the current situation can almost be described as neutral. Short-term technical indicators suggest an impending price correction for the US stock market.

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A final sell-off is still missing for the turnaround in the Dax

The leading German index

Picture from the trading hall of the Deutsche Börse in Frankfurt.

(Photo: dpa)

Dusseldorf It is slowly dawning on investors that the current crash on the stock market is not a technical reaction on the financial market – but a pandemic that will result in far-reaching changes in social, public and economic life.

The more details about the worldwide economic standstill become known, the more optimistic the future for investors. This is shown by the current data from the weekly Handelsblatt survey DaxSentiment among more than 3500 investors.

Three weeks ago, the expectation of Dax development was still 4.1 in three months. Now it has dropped to 1.4. “There are first doubts as to whether we will be able to get out of this crisis halfway in the foreseeable future,” explains sentiment expert Stephan Heibel, who evaluates the survey every week.

Investors’ willingness to invest has also declined accordingly: after a record 5.8 in the previous week, only 3.2 is reached: 40% of the survey participants intended to buy shares within the following two weeks a week ago , now it’s only 29 percent.

However, optimism about the future has not fallen far enough for a turnaround. After all, the stock markets are by definition in a bear market after a decline of more than 20 percent. “Such a bear market does not end when speculators or long-term investors buy,” explains the owner of the Animusx analysis company. “It only ends when nobody sells.”


That’s an important difference. As long as there are still investors with significant stock positions who now want to sell unwelcome positions after the crash, any countermovement will quickly end. It is not enough that the five-week sentiment average has already reached a negative extreme value and thus signals a turnaround.

For some of these investors, the recovery will never go far enough. They hold on to their positions. However, only until the so-called “final sale”. This is a sell-off wave that must be violent enough for these investors to lose their nerve and throw their last, unpleasant positions on the market. “Only then is a floor reached,” says Heibel.

But it is not that far yet. The crash was too quick, and many investors are hoping for slightly better prices to sell positions. The result: you will suffocate every recovery attempt.

With the weekly DAX Sentiment Survey, investors can closely monitor sentiment developments. According to Heibel’s assessment, future optimism in particular will continue to decline in the coming weeks. More and more investors will lose hope of a quick recovery on the stock markets. And only when the optimism about the future shows extreme negative values ​​in the survey can the “final sell-off” be expected.

In which cycle phase do you think the markets are currently in?

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Until this sellout, the Dax should remain in zigzag mode, sometimes up, sometimes down. “Nerve-wracking. Not nice, ”says the sentiment expert and advises investors:“ Stay with it, sell a little in recuperation to get cash. And buy shares again in the next sale ”.

Heibel had already recommended last Monday: Investors should at least wait for this countermovement in order to then say goodbye to unpleasant stocks in the portfolio at higher prices and thus suffer less loss.

The current results of the survey also show that the panic of the previous weeks has subsided. The short-term mood value of minus 4.2 can be interpreted as fear, but not as panic.

Absolute uncertainty is also diminishing: after minus 12.3 two weeks ago, this indicator only moves to minus 3.6. This decline should not come as a surprise: the fastest and most violent crash in history had never been expected in this form. In the past week there was a countermovement in the Dax with a weekly increase of 7.9 percent. That had reduced the stress level somewhat, at least in the short term.

Have your expectations for the Dax been met in the past week?

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The Euwax sentiment of the Stuttgart stock exchange, which is important for private investors, has fallen back to zero. This means that the number of call and put leverage products in their portfolios is balanced. In the weeks before, the majority of private investors had speculated that prices would rise again.

This indicator also shows that belief in a rapid recovery is diminishing. The optimism that the sharp drop in prices initially created is gradually disappearing. Institutional investors who hedge themselves via the Frankfurt derivatives exchange Eurex are now also neutral.

The situation is very different in the USA. There, the put / call ratio of the Chicago futures exchange CBOE shows strong protection for investors: US fund managers have kept their investment ratio at a historically low level.

The increase in the investment ratio from 11 to 26 percent now looks violent. But since a normal investment rate is 60 to 90 percent, the current value is still low.

Which cycle phase do you expect in three months?

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The bull / bear ratio among US private investors stands at minus 19 percent, the bears dominate the mood. The “fear and greed indicator” of the US stock markets based on technical market data has increased to 24 percent. Although this value still shows extreme fear among investors, it is well above the extreme values ​​at almost zero of the previous weeks.

Other short-term US technical indicators also indicate that the market has fallen too low too quickly, i.e. oversold. The countermovement of the previous week did little to change that.

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The sale is not over

Dealer in Frankfurt

According to the analysis of investor sentiment, an end to the price losses is not yet in sight, despite the already drastic losses.

(Photo: dpa)

Dusseldorf The price slump on the German stock market has reached historic dimensions: more than minus 35 percent since the beginning of the year, minus 20 percent in the past trading week and meanwhile minus ten percent on Monday alone today. However, according to the analysis of investor sentiment, an end to these price losses is not yet in sight despite the already drastic losses.

“After a final sale, the future expectations look different,” explains Stephan Heibel after evaluating the current Handelsblatt survey DaxSentiment. “Especially German private investors still show too much optimism to start the final sell-off required for bottoming out.” Institutional investors, fund managers and other financial professionals are already a little more careful.

A final sale on the markets is almost always accompanied by the same side effects: for example, a crash with extremely high sales. In such situations, investors want to sell under all circumstances.

But despite a minus of 12.2 percent last Thursday, sales were not very high. And according to sentiment theory, optimism must be completely gone to form a solid floor. Such a lower level usually only forms when there is no longer a seller.

In which cycle phase do you think the markets are currently in?

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Experience has shown that investors willing to buy prevent the wave of sales from being stopped. Because as long as there are still optimists, negative events can turn them into new sellers.

“Against the background, a Dax level of minus 40 percent compared to the record high of February 17 is not sufficient reason for bottoming out,” says the managing director of the analysis company Animusx. “The last optimists have to lose their nerve before the crash can be ended.”

However, there is reason for a little hope: The most recent survey took place on the weekend, the crash on Monday was not necessarily taken into account. The next survey may then provide more information.

Even the five-week sentiment indicator, a hitherto unambiguous signal for the development of share prices, gives little hope. Although this value is falling rapidly, it has not yet reached an extreme negative result.

Since the start of the survey in September 2014, this indicator has reached an extreme value four times. And each time the Dax rose significantly.

Have your expectations for the Dax been met in the past week?

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The last time this curve reached a negative record was in December 2018. This was the starting signal for the rally seen, which raised the leading German index from 10,279 points at that time to 13,596 points by February 17, 2020.

Surveys like the Dax sentiment are based on two assumptions: If many investors are optimistic, they have already invested. Then there are only a few left who can still buy and thus drive up the prices.

Conversely, if most investors are pessimistic, they have not invested. Then only a few can sell and thus press the prices.

For his forecast of how the Dax should develop in the coming trading days, Heibel evaluates further indicators that reach new all-time lows: The short-term mood has been at an extremely low level for three weeks in a row. The uncertainty is also at a record low.

The currently most interesting area is future expectations – the answer to the question of what Dax development investors expect in three months. In the past three weeks, only a few respondents could imagine that the German stock market could get worse.

Which cycle phase do you expect in three months?

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This relative optimism about the future has now collapsed, but is still too high for a turnaround. Around half of those surveyed still believe that the situation will improve. The result: willingness to buy, the fourth area of ​​the survey, has been at a record level for three weeks.

A look at other indicators also shows historical dimensions. The fund managers in the USA have reduced their investment ratio to 16 percent, a decrease of 13 percentage points compared to the previous week.

“I don’t know what fund managers still want to sell,” says Animusx owner Heibel, who “has never seen such a low investment rate”. The “fear and greed indicator” of US stock markets, which is calculated using technical market data, has dropped to two percent.

Explanation: A value of 50 percent is already considered fear, less than 25 percent extreme fear. “Even in the financial crisis, I never saw a figure of two percent,” said Heibel.

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But that also speaks against an end to the sell-off: private investors are already speculating on rising prices with call warrants.

The derivatives indicator Euwax-Sentiment of the Stuttgart Stock Exchange has shot up. This value is calculated based on real purchases and sales of leverage products on the Dax and is a contraindicator in phases like the current one.

Because should they expect prices to fall further, investors quickly part with such leverage products in order to limit losses. And thus reinforce price drops.

Institutional investors who trade on the Frankfurt derivatives exchange Eurex are more cautious: they have increased their hedges and bought put options that increase in value when prices fall. The same applies to professionals in the United States.

Other short-term indicators reach values ​​that normally speak for a quick countermovement. But nothing is normal on the markets at the moment.

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