Zurich left reeling by finance chief's death

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Associated Press

Posted on September 12, 2013 at 10:00 AM

GENEVA (AP) — In life, Pierre Wauthier struck colleagues as genial and self-possessed — the sort of cool-under-pressure qualities needed as chief financial officer at one of the world's biggest insurers.

In death, the former CFO's allegations of discord at the top of Zurich Insurance Group, and of a toxic working relationship with chairman Josef Ackermann, have severely rattled the reputation of one of Europe's leading business figures and a global brand with 60,000 employees.

Until he was found dead on Aug. 26 at his lakeside home in Walchwil, Switzerland, in what police have called an apparent suicide, Wauthier's well-respected expertise, likable demeanor and enjoyment of hard work helped him navigate the intense daily pressures in the cross-hairs of top management.

Company spokesman Bjorn Emde described Wauthier as "a very nice person and much-liked. Colleagues liked him a lot"

Despite his calm exterior and good sense of humor, colleagues say Wauthier was becoming increasingly frustrated working with his new and demanding boss, Ackermann, a former Deutsche Bank chief who took over as Zurich's chairman last year.

Without divulging details, the company said that a typed and signed note left behind by Wauthier, a 17-year veteran at Zurich and married father of two, describes his strained working relationship with its new chairman.

According to a Zurich official who has been briefed on the note — and spoke to The Associated Press on condition of anonymity because of the sensitivity of the matter — Wauthier accused Ackermann, a former Swiss Army colonel, of creating an unbearable work environment.

Wauthier went on to say in the note that he fought with Ackermann over how the company did its financial reporting, while being pressured on how the numbers should be presented — with Ackermann accusing Wauthier of playing down negative aspects of the company's financial performance, the official said.

Ackermann dismissed the allegations Thursday as "incomprehensible," while acknowledging that he never formed a strong relationship with Wauthier: "I knew him far too little."

In the days after his body was discovered, Wauthier's widow told the company that she considered Ackermann at least partly responsible for his husband's death. The chairman quickly resigned, saying he was shocked by the family's accusations. In a statement, he called the allegations "unfounded," but said he was stepping aside to avoid further damage to the company.

On Thursday, while disclosing that he was stepping down from the board of another company —Siemens AG, over a dispute about the company's new CEO — Ackermann acknowledged that he believed Zurich wasn't performing the way it should and he felt the company needed to more transparency in its financial reports. The company had been struggling and had recently reported an 18 percent drop in quarterly profits.

"I also ... demanded that we paint a very honest picture, especially in the conclusions and don't just pretend that everything is going well," Ackermann said.

"Anyone who knows me knows that I set the bar very high, also for myself."

In the past, Wauthier was the one called on to explain the bad numbers. In a CNBC video posted online, he coolly deflected the issue of a 62 percent third-quarter net profit drop in November 2012. Instead, he emphasized the insurer's "underlying performance continues to be strong."

However, Ackermann now wanted to stress to investors that the company knew it had a battle ahead and for Wauthier to present a more unvarnished picture of the company's poor financial picture, said the Zurich official with knowledge of the apparent suicide note.

Wauthier's death and the accusations in the note prompted Zurich to investigate whether the chairman had exerted "undue pressure" through a tough management style. That the accusations came from Wauthier, an executive seen has having a profound understanding of the company, made their sting all the more powerful. The probe is ongoing, and Zurich has set no timetable for releasing its findings.

When he was appointed CFO in September 2011, Wauthier was described by Zurich's CEO Martin Senn as a skilled executive who not only had wide-ranging experience in finance and investor relations, but also possessed a "deep understanding of Zurich's strategy and culture."

Wauthier, a dual French-British national, was born in London and educated in Paris, where he earned two master's degrees in business and private law and met his future wife. He worked for KPMG, the French foreign ministry in Sudan, and JPMorgan in Paris and London, before joining Zurich as a corporate credit and investment risk manager in 1996.

A half-marathon runner and triathlete, Wauthier had spent much of his life as an expatriate, growing up in several African countries with a German mother and French father who worked as a journalist for Agence France-Presse.

At Zurich, Wauthier took on progressively larger roles, including as head of investor relations and rating agency management, and as finance head of Zurich's Farmers Group Inc., in California. His career at Zurich brought him back to Switzerland in 2007.

At the time of his appointment to CFO, Senn called Wauthier "the ideal person to continue to drive forward our financial management." And in an interview with Swiss newspaper NZZ am Sonntag shortly after Wauthier's death, Senn described him as someone who was highly fit and had great integrity, and made it clear just how out of character it was for the former CFO to spark such a maelstrom of controversy.

"Pierre was humble and concentrated fully on his work," Senn said. "That's why he was not well-known publicly."

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