Switzerland cuts bonus payouts for top Credit Suisse management
This is in response to a report that revealed the bank had helped wealthy Americans evade taxes. The Swiss government has ordered Credit Suisse to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether those already paid can be recovered. This is
CNN
The Federal Council announced on Wednesday that Switzerland had instructed Credit Suisse to reduce or cancel all bonus payments due for the top management levels and investigate whether any already paid could be recovered.
According to a press release, under Swiss banking law the Federal Council may impose bonus-related actions on a bank that is systemically important if they received federal funds as state aid.
The unusual move by the government comes after public outrage over bonus payments made at the bank. It was forced to merge with UBS, and then had to be saved with state guarantees and funding of close to 260 billion Swiss Francs ($280billion).
The council stated that the decision would affect 'around 1,000 employees who will lose approximately 50-60 millions Swiss francs as a result of these measures'.
The Executive Board will have its bonus payments canceled up until the end of 2020. Management one level below that board's level, as well as those two levels below it, will then see their bonuses halved and by 25%.
In the annual report of the bank, published in April, top executives announced that they would not be receiving a bonus in 2022.
A drop in the share price of the Swiss bank has already reduced the bonus pool for 2022 to 635 million Swiss Francs, from 2.76 billion.
Federal Council also added that Credit Suisse had to report to the authorities whether or not it was possible to recover bonuses paid out. It also decided to reduce or cancel bonuses for top management levels, accrued up until the merger between UBS and Credit Suisse is completed.
Credit Suisse shareholders spoke out at the final annual general meeting on Tuesday against the compensation paid to executives and directors in the run-up to the company's demise.
Shareholders of the bank approved the compensation for its board until the merger was completed, but they voted against the compensation for bank executives.