Swiss economic minister tackles Credit Suisse Bonus

Swiss Economic Minister Johann Schneider-Ammann had strong words for Credit Suisse bonus. Asked over the issue on Sunday by Zentralschweiz am Sonntag, he said that so-called fat-cat salaries for top bankers are stupid and divisive.
The minister, part of the nation’s governing seven-member cabinet, was commenting about payouts to senior managers of Switzerland’s second-largest bank, Credit Suisse.

He told the newspaper, in unusually barbed remarks, that the bonuses are a "stupidity” that have “nothing to do with the world market conditions", and represent "a recklessness” that will sooner or later lead to backlash by dividing social classes.

Last week, executives at Credit Suisse, including CEO Tidjane Thiam, have offered to cut their own bonuses by 40% after investors criticised their proposed levels. They suggested their long-term incentive rewards for 2017 and short-term incentive rewards for 2016 be cut by 40%, and that total board pay for 2017 be kept at the same level as 2015 and 2016.

Thiam's 2016 pay packet included a bonus of 4.2 million Swiss francs.

Credit Suisse posted a loss of 2.35 billion Swiss francs for the last three months of 2016, a bigger hit than the 2.07 billion francs estimated by seven analysts surveyed by Bloomberg. Shareholders in Switzerland can veto the pay plans, however, under powers gained from a 2013 “fat-cat pay” referendum. Doing so would represent the first such use of the referendum at a major company.

Advisory group Glass Lewis recommended shareholders vote to reject the executives' pay plan, calling it “wholly inappropriate given the loss suffered by shareholders in the last two fiscal years.”

The bank must pay $5.3 billion to settle a US Department of Justice investigation into the behaviour of its residential mortgages division leading up to the 2008 financial crisis, pushing the lender to a loss for the year.