LONDON — Credit Suisse’s 40% bonus cut for senior executives is unlikely to save the bank from a confrontation with shareholders at a general meeting on Friday.
Members on the executive board said they would slash performance-based rewards by almost half after shareholders objected earlier this month to high pay in a year of losses for the bank.
But it has not been enough to win over all shareholders.
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.”
In an interview with the Financial Times, Credit Suisse Chairman Urs Rohner, said the anti-bonus reaction “was more than I expected, and particularly among UK and professional or institutional investors and proxy advisers.”
He said he would “explain what we did and we are confident that our shareholders understand why we took the decisions we did.”
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.
The bank must pay $US5.3 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.
The bonus cuts saw Credit Suisse CEO Tidjane Thiam’s 2016 compensation reduced by CHF4.67 million to a total of CHF10.24 million. Thiam has led Credit Suisse into a period of deep restructuring in an attempt to rethink the business model in an environment of low interest rates, low economic growth and increased regulation.
Thiam has tried to steer away from the capital-intensive markets business towards providing more services for high-net worth individuals.
Here is how the shares have performed over the past 12 months:
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