Credit Suisse pay plan gets more opposition at shareholder meeting
ZURICH May 9 (Reuters) - Credit Suisse faced increased opposition from shareholders to its pay plan on Friday, as the Swiss lender became the latest major bank to come under attack over compensation.
Senior pay remains a hot-button issue in the banking sector, in particular at Credit Suisse, Switzerland's second-biggest bank after UBS, which last year raised the pay of Chief Executive Brady Dougan by more than a quarter.
That increase was despite the bank not meeting all its performance targets and hiking its reserves to deal with a U.S. probe into its role in helping wealthy Americans evade taxes.
In a vote at its annual shareholders' meeting on compensation plans for 2013, which included a 9.8 million Swiss francs ($11.2 million) payout for CEO Dougan, 16.6 percent of shareholders voted against, nearly two thirds more than opposed the same measure last year. 81.3 percent of supported the plan.
There will also be a vote on proposal to issue new shares for bonuses.
More than 11 percent of shareholders in UBS, Switzerland's largest lender, had voted against the bank's bonus plan on Wednesday, while nearly 86 percent backed it.
Before the vote, Swiss shareholder groups Actares, Ethos and ZCapital came out against both proposals.
"Pay at Credit Suisse is too high," Dominique Biedermann, director at Ethos, which advises investors holding 3 percent of Credit Suisse shares, told Reuters. "There is no reason why banks should pay executives twice as much as large industrial companies."
Addressing the 1,543 shareholders, largely Swiss retail investors, Biedermann criticized Credit Suisse for paying 503 people it considers key to how the bank deals with risk a total of 1.36 billion francs, or an average of 2.6 million.
"That is more than is planned for the 2013 dividend (of 0.70 francs per share)," Biedermann said.
This year's compensation vote is non-binding, but a similar vote next year would be enforced if a proposed amendment is ratified at the meeting.
INTEGRITY AND FAIRNESS
Actares took issue over the bank's U.S. legal troubles and what the shareholder group sees as the bank's failure to set up a framework for winding down divisions that are failing.
Credit Suisse Compensation Committee Chairman Jean Lanier told investors ahead of the vote the bank had listened to shareholder concerns to produce a stable and understandable compensation structure.
"We have, of course, to evaluate our practices and procedures ... without forgetting the reason for compensation, which is to attract, motivate and retain employees who share our values and achieve results for our company with integrity and fairness," said Lanier.
The Credit Suisse vote on pay comes a day after Asia-focused bank Standard Chartered saw more than 40 percent of its shareholders oppose its compensation plan.
Last month, more than a third of Barclays' investors declined to back its pay policy.
Credit Suisse has been a lightning rod for criticism over pay in Switzerland since its decision to pay CEO Dougan nearly 90 million francs in 2010, when a five-year share bonus programme topped up his regular salary.
U.S. advisory group ISS had encouraged shareholders to vote against plans to issue new shares for staff bonuses but supported the overall pay plan.
Credit Suisse Chairman Urs Rohner was also due to tell the meeting the bank was doing everything in its power to reach a settlement with U.S. authorities, who are probing whether and how its private bankers helped wealthy Americans dodge their taxes.
($1 = 0.8781 Swiss Francs) (Editing by Katharina Bart and David Holmes)