ZURICH May 9 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
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
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
"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
($1 = 0.8781 Swiss Francs)
(Editing by Katharina Bart and David Holmes)