Credit Suisse board member to defend pay to investors
ZURICH, April 27
ZURICH, April 27 (Reuters) - A Credit Suisse board member and major shareholder will defend the Swiss bank's pay practices to investors at a shareholder meeting on Friday, according to prepared remarks seen by Reuters.
"We believe that our compensation arrangements for 2011 demonstrate our commitment to pursue a responsible, performance-based approach to compensation that takes into account the consequence of compensation for risk-taking behaviour and regulatory challenges," Olayan Group chief executive Aziz Syriani will tell shareholders according to the text.
Olayan is a major Credit Suisse shareholder, and Syriani is head of the bank's compensation committee.
Syriani's remarks, set to run nearly as long as those by Credit Suisse chairman Urs Rohner and chief executive Brady Dougan, highlight that the bank acknowledges compensation remains a contentious issue.
Swiss activist investor Ethos, influential because it makes recommendations to Swiss pension funds, said this week shareholders should vote down Credit Suisse's pay practices, even after Dougan took a more than 50 percent pay cut on the year to 5.8 million Swiss francs ($6.4 million).
Dougan was not Credit Suisse's top earner for 2011 - that honour went to Robert Shafir, who earned 8.5 million francs for running the asset management arm which posted a 10 percent rise in pretax profit. Shafir's pay for 2010 was not disclosed.
Credit Suisse said Shafir had successfully repositioned the asset management unit and cut costs, focused on more stable fee-based revenue, and managed risk proactively and with discipline.
Both pay disclosures, which come against the backdrop of 3,500 job cuts at the bank, will likely draw investor fire at the shareholder meeting.
Credit Suisse said it has not paid top executives any cash awards for the past four years, opting for stock-based schemes linked to the bank's share price.
The bank has increasingly turned to long-dated stock-based instruments to reward top executives, and also began pooling riskier assets into bonus programmes for investment bankers three years ago.
Dougan's pay is slightly less than that of UBS CEO Sergio Ermotti, who earned 6.4 million francs for 2011, including more than 4 million in various immediate and deferred cash and share-based bonuses.
Ermotti was confirmed as UBS CEO in November after being named acting CEO in September when former head Oswald Gruebel quit following a $2.3 billion trading scandal. ($1 = 0.9082 Swiss franc) (Reporting By Katharina Bart; Editing by Dan Lalor)