Shareholders of GAM have dealt a major blow to the leadership of the Swiss-based asset manager at the annual general meeting held today. A revolt that may serve as a timely reminder to Credit Suisse.

The pay increase awarded to GAM boss Alexander Friedman was not to the liking of shareholders, dismayed about its coincidence with the company’s sluggish performance last year. They opted to reject the compensation report at today’s annual general meeting, GAM said in an emailed statement.

Shareholders also rejected the proposed maximum variable compensation for the executive board in 2017. They did however accept the proposals for the fixed share of the compensation for the executive and the supervisory boards.

Non-Binding Vote

The vote wasn’t binding, but is akin a slap in the face of the management of GAM. RBR, a hedge fund and major shareholder of the company, as well as several other shareholder representatives had decided to block the compensation report even after Friedman had opted to receive any future bonus in the shape of shares only. A majority of 54.2 percent of GAM shareholders voted against the report and only 17.6 percent were in favor of the executive pay.

Reminder for CS

The result may be seen as a timely reminder to the executive of Credit Suisse (CS) ahead of its annual general meeting tomorrow that shareholders have become more reluctant to simply wave through excessive pay packages, in particular at a time when the company is undergoing a tough period.

Some shareholder representatives of CS have already made clear that they won’t budge and the decision by the management to forego some of their bonuses hasn’t swayed their opinion.

RBR's Plan Rejected

GAM’s shareholders however rejected the proposals for change presented by RBR founder Rudolf Bohli. They didn’t support his candidates for the board, which included Kasia Robinski, William Raynar and Bohli himself. RBR planned to radically shake up the company, which has not performed according to expectations in recent years.

The AGM approved the board’s proposal to replace GAM Chairman Johannes A. de Gier with Hugh Scott-Barrett. Shareholders also reelected Diego du Monceau, Nancy Mistretta, Ezra S. Field and Benjamin Meuli. David J. Jacob was newly appointed to the board.

The Right Team

Scott-Barrett said that the board had taken note about the concern in relation to the company’s compensation structure. He remains convinced that the management team will be able to accelerate the necessary turnaround at GAM and to create sustainable shareholder value.