Status: 02/14/2022 12:42 p.m
The dispute over how to deal with a quota for women at engine manufacturer Deutz has escalated: CEO Hiller has to vacate his post. The supervisory board also gets a new chairman.
The chairman of the board of the engine manufacturer Deutz, Frank Hiller, was unanimously dismissed from the board by the supervisory board. The group announced this. He is retiring with immediate effect. His position will be taken over by the previous Chief Financial Officer and Labor Director Sebastian Schulte, who will continue to manage his previous areas on an interim basis. In the future, a woman will join the Deutz board of directors.
The supervisory board has already set up a process to fill the vacancy on the executive board with a woman within the meaning of the Second Management Positions Act, the statement continues. A company spokesman confirmed that there had been a discussion on the implementation of the requirement, specifically on how best to do so proactively.
There were different opinions. In the end, the supervisory board made this decision. By the end of 2022 or beginning of 2023 at the latest, two of the four board members would have had to deal with the issue, the spokesman said. There had previously been media reports about the differences between Hiller and the chairman of the supervisory board, Bernd Bohr.
The head of the supervisory board will also be replaced
There are also changes on the supervisory board: the body has elected former Audi board member Dietmar Voggenreiter as its new chairman. The previous head of the supervisory board Bohr had previously resigned as chairman. However, he remains a member of the supervisory board.
So far, the Deutz executive floor has been occupied by four men, and there is not one woman. Since August 2021, however, large companies have had to follow new rules for filling top positions under the so-called Second Management Positions Act. Listed companies with equal co-determination with more than 2,000 employees and more than three board members must therefore ensure that at least one woman is on the board when filling positions in top management.
Operations at Deutz are “super meltdown”
The German Association for the Protection of Securities Ownership (DSW) described the events at Deutz as a “super meltdown”. Something like that simply shouldn’t happen, said DSW CEO Marc Tüngler. Here the supervisory board and, above all, the chairman of the supervisory board would have to set the course and make decisions at an early stage. The requirements of the Second Management Positions Act are a major challenge, especially for medium-sized companies.
On the stock exchange, investors reacted violently to the news that CEO Hiller had been unanimously dismissed from the board by the supervisory board. The departure of the boss increases the uncertainty, according to market participants. The share, which is listed in the SDAX, has lost more than twelve percent at times and has fallen to its lowest level since the end of 2020. It has lost a good 40 percent since its interim high in mid-September 2021.
“Lack of Profitability”
However, Deutz also has other concerns. The investor Ardan Livvey had recently criticized the company’s course and accused it of poor profitability. The Deutz management must set itself more ambitious goals. Last November, the activist financial investor, which claims to hold more than five percent of Deutz shares, demanded that the board of directors be dismissed. Deutz had targeted sales of 1.6 to 1.7 billion euros for 2021. The group wants to present figures for the past year on March 14th.