Commerzbank's Board Penalises Former CEO as Job Cuts Deepen Resistance to UniCredit

Commerzbank cuts former CEO Knof's variable pay by 30% for failing to report a meeting with UniCredit's Orcel, unveils aggressive cost cuts, and sees minimal shareholder tender response.

A hidden meeting can prove costly — especially when it involves the CEO of a hostile bidder. The Commerzbank supervisory board has slashed former chief executive Manfred Knof's variable compensation for 2024 by 30% after he failed to disclose a September 2024 meeting with UniCredit boss Andrea Orcel at Knof's home. The encounter occurred shortly after UniCredit revealed its stake in the German lender and as Orcel was actively pitching a takeover.

Jens Weidmann, chairman of the supervisory board, disclosed the penalty at the annual general meeting in Wiesbaden, stating that Knof had breached his duty by not informing the board. Knof later insisted Orcel showed up unannounced and that the conversation yielded nothing worth reporting. The cut, however, remains limited to the year in which the violation was identified.

The incident underscores how deeply UniCredit's advance has penetrated Commerzbank's governance. Neither the supervisory board nor Knof's successor, Bettina Orlopp, learned of the meeting until press reports surfaced in 2025.

A dual push for efficiency and independence

While the board dealt with internal discipline, management unveiled an aggressive cost-cutting drive. An additional 3,000 full-time positions are to be eliminated across the group, on top of the 3,900 job cuts already announced in February 2025. The extra reductions are part of a broader automation push under the "Momentum 2030" plan, which targets a 21% return on equity and a net profit of €5.9 billion by the end of the decade.

Central to that plan is artificial intelligence. Commerzbank plans cumulative investments of around €600 million between 2026 and 2030 in AI, expecting an annual contribution of €500 million from those initiatives starting in 2030. The strategy also foresees freeing up roughly 10% of capacity through process automation.

The timing is critical. Berlin has signalled it will not deploy any "golden powers" or increase its roughly 12.7% stake to block UniCredit. Chancellor Friedrich Merz has prioritised European banking integration over national defences, leaving the decision squarely with shareholders.

A resounding vote of confidence — but little tender interest

Shareholders at the AGM delivered strong backing for the existing leadership. Board discharge votes ranged from 99.58% to 99.64%, while 91.28% approved the remuneration report. The endorsement contrasts sharply with the market's tepid response to UniCredit's offer: the first status report on 19 May showed only 0.02% of Commerzbank shares had been tendered. The extended acceptance period runs until 3 July 2026.

UniCredit's implied offer value stood at €34.56 per share, well below Commerzbank's closing price of €36.16 on the Friday before the AGM and the Monday level of €36.90, up 2.05% for the day. The stock is trading near its 52-week high of €37.75, with a relative strength index of 79.6 signalling overbought conditions. Independent analysts peg the median target at roughly €41.50.

Dividend as a defensive weapon

On 26 May, Commerzbank paid out €1.10 per share from the AGM-approved dividend, totalling around €1.2 billion. Combined with share buybacks, the bank is returning €2.7 billion to shareholders for the 2025 financial year. The message is unambiguous: a standalone Commerzbank can deliver sufficient financial firepower to make UniCredit's offer look less compelling.

Management's "Momentum 2030" roadmap now faces its first real test. By the time the tender offer closes on 3 July, the bank must convince investors that a profitable independent future is credible. For the moment, the share price — and the governance crisis sparked by a secret meeting — suggest the battle is far from over.