Josef Ackermann

Chairman, Deutsche Bank

Nationality: Swiss.

Born: February 7, 1948, in Mels, Switzerland.

Education: Saint Gallen University, PhD, 1977.

Family: Son of a doctor (name unknown) and Margrit (maiden name unknown); married Pirkko Anelli (a homemaker), 1977; children: one.

Career: Credit Suisse, 1977, corporate banker; 1978–1990, positions in Lausanne, London, and Zurich; 1990–1993, member of the executive board; 1993–1996, president of the executive board; Deutsche Bank, 1996–2002, member of the board of directors; 2002–, chairman of the group executive committee and spokesman of the board.

Address: Deutsche Bank, Taunusanlage 12, 60325 Frankfurt-am-Main, Germany;

■ Josef Ackermann became renowned at Deutsche Bank for shifting the style of management from a conventional mode to one that focused on the needs of shareholders and on international expansion. Ackermann changed the distribution of power within Deutsche Bank, resulting in criticism from traditionalists and praise from those who shared his global focus, allowing him to become the most powerful man in Germany's financial industry. In his effort to turn Deutsche Bank from a bloated German lender into a lean global competitor, Ackermann eliminated 14,470 jobs, or 18 percent of the workforce, and cut costs by one-third by closing retail branches and outsourcing management of the bank's computer systems and real estate. He also sold assets totaling EUR 11 billion in worth. Described by many as a man of integrity, Ackermann charted his own course throughout his life, bearing a vision beyond what peers encouraged him to do.


Ackermann was born and raised in the provincial town of Mels in Switzerland. His father was the local doctor who

Josef Ackermann. AP/Wide World Photos.
Josef Ackermann.
AP/Wide World Photos

mended the many broken bones that resulted from ski accidents over the winter holidays, and he often called on his sons to assist him. Ackermann and his two younger brothers were avid skiers themselves and maintained their fitness in the summer by playing soccer. Each learned to play an instrument; Ackermann chose the piano. As of age 12, all the Ackermann boys were encouraged to study languages abroad. The family often took trips to Munich, Germany, to watch plays.

Ackermann excelled in mathematics in high school, but rather than pursue a career in engineering he chose to study economics and social sciences with a focus on bank management at the University of Saint Gallen. His instructors there hoped that he would join the ranks of academia. In addition to his studies, Ackermann served in the army reserves, where he was quickly promoted to colonel, the highest-ranking reservist officer in his regiment. His superiors encouraged him to embark on a full-time military career, but Ackermann decided otherwise. He completed his studies in 1977 as the assistant to the Institute of National Economics, graduating with a doctorate in economics. He married the Finnish-born Pirkko Anelli, whom he had met at the university, that same year. His daughter, Catherine, was born in 1984.


Ackermann told Manager Magazin that his military experience was a better preparation for corporate competition than business school was. While business school focused on a peaceful world, the military prepared him for war and the day-today business crises he would come to face "every half hour" (Zehle, May 2002). More specifically, he credited the military with teaching him goal-orientation and problem-solving skills. Still, in spite of the regimental training he received, Ackermann was able to maintain an appreciation for the arts, taking singing lessons in New York and often attending the opera with his wife.

Upon graduation Ackermann joined Credit Suisse (then the Swiss Credit Institute) in New York as the assistant to the general board of directors. At age 33 he was in charge of three hundred subordinates. After stints in Lausanne, London, and Zurich, Ackermann was promoted to general director, and thus a member of the board, of Credit Suisse in 1990. In 1993 he became president of the Credit Suisse executive board, successfully merging the Swiss Volksbank into Credit Suisse that same year. CEO Rainer Gut wanted to merge the Volksbank business operations into Credit operations, but Ackermann advocated keeping the business units separate; the two also clashed over management styles and strategic plans. In what was perceived by commentators as an abrupt move, Ackermann left Credit Suisse in 1996.


That same year, after receiving at least three lucrative offers from various companies, Ackermann joined Deutsche Bank as a member of the board of directors. He spearheaded the merger of the U.S.-based Bankers Trust into Deutsche Bank in 1998 and was credited with facilitating the move by using an integrative and communicative approach. In 1999 Ackermann's leadership of the global operations and institutions department generated 60 percent of Deutsche Bank's year-end revenues. In the spring of 2000 Ackermann vetoed a merger with Dresdner Bank after insisting the deal could go ahead only if Dresdner Kleinwort Benson was sold. Maintaining this stance in spite of pressure from his peers to approve the deal solidified his reputation as a man of integrity and earned him a promotion. "If there were an enhancement to authenticity, Josef Ackermann would fit the bill," wrote A. T. Kearney's Central European Profit Center leader Michael Träm. "Those who followed his Swiss career point out his well-balanced personality, his even distribution of head vs. gut thinking, and his down-to-earth mentality. He is obviously not an actor-banker, but a banker in heart and soul" (2002).

Ackermann was then appointed to succeed CEO Rolf Breuer, who charged him with building a truly global investment bank. Ackermann served as CEO designate for almost two years before his formal appointment as spokesman of the board and chairman in May 2002. Revenue from corporate and investment banking had surged to EUR 14.3 billion in 2002, from EUR 4.8 billion in 1998, and Ackermann was intent on making an impact in this lucrative market. Even before he became head of Deutsche Bank, he made waves with his plans for restructuring. Inspired by the American leadership structure, he founded an 11-member group executive committee, disempowering the traditional German supervisory board, which he cut in half from eight to four members, all of whom were also members of the aforementioned committee.

Ackermann's vision for globalization focused on shareholders and international performance. In the long term, this created a shift in emphasis in Germany from commercial and retail banking to securities-trading/underwriting and asset-management businesses like the ones the company had acquired. The former Volkswagen CEO Carl Hahn said, "Ackermann modernized Deutsche Bank in a most impressive way" (January 26, 2004).


After four months at his new position, Ackermann sold retail bank branches in France and began focusing on Spain and Italy. The German retail bank market, meanwhile, was saturated with state-subsidized Sparkassen, which owned 40 percent of the market; Deutsche Bank held only 7 percent of the 8.2 million German customers in 2003. However, a European Union directive called for the phasing out of subsidies in 2005, which would create new opportunities in the retail banking environment.

Ackermann merged Deutsche Bank's previously separate divisions for retail, business, and private clients who own between EUR 250,000 and EUR 5 million in assets, into one private banking unit in order to encourage cross-selling. Between 2001 and 2004 Deutsche Bank closed 272 of 1,042 retail branches in Germany and cut the size of the retail banking workforce by 19 percent, to 13,600 employees.

In 2002 Ackermann hired Pierre de Weck to run Deutsche Bank's wealth-management business for clients with more than EUR 5 million of assets to invest. To further entice wealthy clients, in 2003 Deutsche Bank bought Rüd, Blass & Cie, the Swiss private-banking arm of Zurich Financial Services. Pretax profits from asset and wealth management rose to EUR 505 million in the first nine months of 2003—more than triple the earnings of 2002.

In 2003 Deutsche Bank reconsidered its corporate loan criteria after losing billions in the previous year. The company had granted loans based on relationships rather than on the performance of the corporations to which it loaned. Longstanding alliances with large companies were severed, including a more than 40-year relationship with Volkswagen. As a result, problematic loans were significantly reduced in number.

Ackermann also sold $5.3 billion of industrial holdings that were not earning money. The biggest disposal was a EUR 1.6 billion stake in Munich Re, the world's largest reinsurer. "People said: 'He is selling the family silver,'" Ackermann told Fortune Europe . However, a drop in share prices a few months later justified the decision. "If we hadn't sold it, we would not have realized this capital gain that paid for restructuring costs. But it is very difficult to explain to some people" (January 26, 2004).

While Ackermann's revisionary leadership ruffled German feathers, American colleagues described him as "smart but lowkey" to Manager Magazin . Reporter Sybille Zehle considers Ackermann a "man without extremes: diligent, but not over-worked; ambitious, but not awed by rank; casual, but not sloppy; goal-oriented, but not grim; persistent, but not stubborn" (May 2002).


Deutsche Bank's net income rose 85 percent to EUR 929 million in the first nine months of 2003, after it had earned EUR 397 million in all of 2002. "Two years ago, Deutsche Bank was very inefficient, with a huge loan book and poor cost controls," said Rolf Zartner, a Frankfurt-based fund manager at Deka Investment. "Ackermann cleaned up the investment portfolio; he's streamlined the businesses and sold assets the bank doesn't need" (February 2004).

In 2003, 134-year-old Deutsche Bank was the world's seventh-largest bank in terms of revenue; it ranked 12th in mergers and acquisitions and 21st in terms of market capitalization. In the underwriting of international bonds, Deutsche Bank ranked second, behind Citigroup. With EUR 974 billion in assets under management, Deutsche Bank was the world's fourth-largest money manager.

In the summer of 2003 Citigroup and Deutsche Bank entered merger talks, but Deutsche Bank called the deal off. In early 2004 information about other merger discussions surfaced, with Ackermann saying that he was open to a merger as long as it would not harm the shareholders. "Domestic transactions would probably create more value for shareholders," said Ackermann. "It could happen that U.S. banks will start buying big European banks. I think we should find a European response before that happens" (February 2004).


In addition to his full-time position, Ackermann also served on other company boards, including Bayer AG, Deutsche Lufthansa AG, Linde, Mannesman, and Siemens AG. In early 2004 Ackermann was involved in a criminal trial accusing him and other Mannesman board members of Untreue (breach of trust) for granting payouts that were not part of the Mannesman executives' contracts. CEO Klaus Esser, supervisory board chairman Joachim Funk, and other executives of Mannesman received appreciation awards and accelerated pensions in the amount of EUR 55 million after they accepted a hostile takeover by Britain's Vodafone in 2000. The amount was considered "excessive" by German prosecutors. The prosecutors invoked a statute dating from 1871 that bans those supervising the financial assets of others from abusing their power; the original intent of the statute was to avoid fraud.

Ackermann argued that the bonuses were rewards for the executives' success in increasing Mannesmann's value by EUR 77 billion by holding out for a higher offer (EUR 192 billion) from Vodafone. "We increased Mannesmann's market value by EUR 150 billion in my five years as CFO and CEO," Klaus Esser said in an e-mail to Bloomberg. "Awarding a bonus of EUR 15 million to acknowledge an increase of EUR 150 billion is a decision most shareholders in the world will continue to agree with" (February 2004).

The court case was highly publicized, because Ackermann himself did not receive a similar bonus. Also, the case called the nature of executive pay into question in a country where CEOs were compensated significantly less than CEOs in the United States, where "golden parachutes" are customary. Some Ackermann supporters believe the trial reflected Germans' resistance to globalization. "The treatment of Josef Ackermann shows that Germany has not adopted the notion of providing strong incentives for business executives," said the president of the National Bureau of Economic Research, Martin Feldstein. "The failure to provide such incentives depresses German productivity" (February 2004).

Ackermann, who was also a member of the boards of Bayer, Deutsche Lufthansa, Siemens, and Linde, refused to pleabargain and saw the trial as a test for Germany's business climate. "We have to fight it through," Ackermann said. "We are obliged to fight it through for the benefit of Germany and for the financial system in Europe" (February 2004). Amidst pressure to resign, Ackermann continued his work at Deutsche Bank. His goal: making Deutsche Bank one of the world's top three advisers on mergers and acquisitions and returning its status to the top ten in market value.

See also entries on Credit Suisse Group and Deutsche Bank AG in International Directory of Company Histories .

sources for further information

Baker-Said, Stephanie, and Silje Skogstad, "Deutsche Bank's Distraction," Bloomberg Markets , February 2004,

Freitag, Michael, "Porträt: Josef Ackermann," Handelsblatt , May 15, 2002.

Guyon, Janet, "The Trials of Josef Ackermann," Fortune Europe , January 26, 2004, p. 53.

Träm, Michael, Führung braucht Zeit: Der Mythos der ersten 100 Tage , Berlin: Econ Verlag, 2002.

Zehle, Sibylle, "Porträt: Low-Key-Joe," Manager Magazin , May 2002, p. 76.

—Maike van Wijk

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