SWITZERLAND - Jürg Bucher, head of the investment committee for the CHF11bn (€7.1bn) pension fund for Post employees, Post PK, has bowed to mounting pressure to resign after voting in favour of Nestle’s CEO Peter Brabeck becoming group chairman as well.
The election of Brabeck to the double role of CEO and chairman of the board, which took place at Nestle’s annual general meeting (AGM) on April 15, was opposed by an ethical investment group Ethos, representing 83 Swiss pension funds.
Ethos argued that the double role would contravene principles of good corporate governance.
But in spite of support by other pension funds, international consultant Deminor and US group Institutional Shareholder Services, Ethos’ motions were over-ruled.
At the AGM, Bucher voted in favour of the Brabeck’ s double mandate on behalf of the pension fund, but according to the Swiss press he did so despite of his two voting-rights committee-colleagues Alfred Wyler and Beat Haemmerle not being in favour.
As well as heading the pension fund’s investment committee and sitting in the voting-rights committee, Bucher is also a member of the founding council, which sets the broad principles of the fund’s investment strategy. He also heads the Post’s financial arm PostFinance.
A week after Nestle’s AGM, the pension fund’s funding council met for an extraordinary meeting and backed Bucher, who was under pressure by trade union Kommunication to step down.
A statement issued by the pension fund after the meeting said that the current regulation over the pension fund’s position on voting rights is “unclear and open to different interpretations”. The statement added that new regulations would be prepared.
It also said that “the directly-interested” Wyler and Haemmerle regarded the requests for Bucher’s resignation as groundless. Bucher’s resignation however came in spite of this support. According to reports in the Swiss media he justified the decision by citing his connection with PostFinance as a potential conflict of interest.
His resignation from the founding council will be effective in the autumn. Bucher has renounced with immediate effect his posts in the investment as well as voting-rights committee.
PK Post was not available for comment today due to a public holiday.
Separately, WM Performance, the performance measurement arm of State Street, said that Swiss pension funds’ returns in the first quarter of 2005 have been the best in 12 months.
According to WM Performance average returns in the “Swiss Balance Universe” are 2.3%.