The brokerage CEO exits, taking a dig at the founder
A rare public feud unfolded in Germany’s corporate landscape on Friday as the departing CEO of a prominent online broker publicly clashed with a company founder who had campaigned against him. Frank Niehage, CEO of FlatexDegiro, announced his sudden departure after a decade at the helm of the firm, which operates across 16 countries and serves 2.7 million customers.
The decision came amidst sharp criticism from the company’s founder and major shareholder, Bernd Foertsch, who had voiced his intention to vote against Niehage and the company’s chair at an upcoming shareholder meeting due to strategic missteps, including missing out on opportunities in the cryptocurrency market.
Such public disputes are unusual in the traditionally reserved corporate culture of Europe’s largest economy, typically resolved behind closed doors. Niehage, speaking during an earnings call with analysts, cited his resignation as an effort to prevent further damage to the company’s reputation and to address tensions with Foertsch.
Accusing Foertsch of attempting to exert undue influence by seeking a backdoor entry to the supervisory board, Niehage urged shareholders to support the current chair at the meeting, likening the process to democracy, where every vote counts. Both Niehage and Foertsch refrained from commenting on the matter, while the chair, Martin Korbmacher, declined to offer a statement.
FlatexDegiro, despite facing regulatory fines and internal control issues in 2023, has witnessed steady profit growth over the past year, posting a remarkable 340% increase in first-quarter net profit compared to the previous year, leading to a surge in its shares. Guido Moellering, director of the Reinhard Mohn Institute of Management, attributed the rarity of such public conflicts in Germany to the deeply entrenched “Germany Inc.” culture, where board members and executives maintain close ties away from public scrutiny.
Moellering characterised Niehage’s remarks as a form of “retaliation” against Foertsch’s public criticisms, highlighting the latter’s departure from the traditional behind-closed-doors approach. Foertsch had previously criticised FlatexDegiro for not directly offering cryptocurrencies like Bitcoin on its platform, a stance that Niehage had challenged in the past, expressing scepticism towards cryptocurrency investments. Stephan Simmang, one of FlatexDegiro’s interim CEOs, acknowledged Niehage’s divergent views on cryptocurrencies during a briefing with journalists.
