Zurich: Credit Suisse Group AG’s proposed bonuses for top executives may initially have been “insufficiently sensitive,” Chairman Urs Rohner said in prepared remarks to shareholders as they gathered for a binding vote on the pay packages.
The board’s subsequent decision to reduce the bonuses should be seen as a commitment to delivering on the bank’s strategy, not as a “sign of weakness,” he said in a draft speech posted on the bank’s website.
Chief Executive Officer Tidjane Thiam and 12 other management board members offered earlier this month to give up 40 percent of their bonuses to quell criticism. While that satisfied some investors, including Norway’s sovereign wealth fund, others say the payouts are still too generous for a bank that has posted two straight annual losses.
Swiss laws introduced in 2015 require companies listed in the country to give shareholders a binding vote on board and executive pay.
The company is asking shareholders to approve 48 million francs ($49m) in bonuses for top executives. Even with the cut, Thiam would still be the second best-paid CEO among European peers with a total compensation of 10.24m francs. Switzerland’s other big bank, UBS Group AG, is proposing to pay CEO Sergio Ermotti 13.7m francs.
Credit Suisse is reshaping its business model to expand in wealth management and emerging markets like China. Thiam, a former insurance executive, has downsized the investment bank, the business that made Credit Suisse one of the biggest names on Wall Street but that has become more expensive since the 2008 financial crisis due to tougher capital requirements. Major investors including Harris Associates have said they support Credit Suisse’s compensation plan.
