By Katharina Bart
ZURICH May 12 Credit Suisse boss
Brady Dougan is under pressure from lawmakers to resign over the
Swiss bank's role in helping wealthy Americans dodge taxes, a
legal headache that could cost the bank as much as $1.6 billion
The Zurich-based bank is the highest-profile target in a
U.S. probe that has cast a shadow over the Swiss banking
industry since larger rival UBS became the first major
lender to settle tax charges five years ago.
Switzerland's left-wing Social Democrats (SP) on Sunday
called for Dougan to step down saying he and other executives
represented part of the problem, raising the stakes for Dougan
as he seeks to settle the tax case with U.S. authorities.
"If you're justifying your high salary with the
responsibility you carry, then you cannot duck that
responsibility in an emergency," SP president Christian Levrat
said in a statement.
Levrat's comments pair the hot-button issue of bankers' pay
in Switzerland with the pursuit of Swiss banks by U.S.
authorities over untaxed funds held offshore, which has
intensified for Credit Suisse in recent weeks.
Credit Suisse, the country's second-largest bank behind UBS,
lifted chief executive Dougan's pay by more than a quarter last
year to 9.8 million Swiss francs ($11.06 million), despite not
meeting all performance targets and a hike in litigation costs
related to the U.S. probe.
Centrist BDP politician Martin Landolt - a former banker who
spent three years at rival UBS - stopped short of
calling for Dougan to leave now, but said the banker might
consider resigning once the tax case is settled.
"When a solution for the U.S. problem is found, depending on
what the settlement is, I would find it appropriate for Dougan
to take responsibility and make way for a new beginning,"
Landolt told Reuters on Monday.
"This is necessary to ensure Credit Suisse's image doesn't
suffer, for client trust to be restored, and for the bank's own
Credit Suisse declined to comment.
Dougan, an U.S. citizen and 24-year veteran of Credit
Suisse, has been a lightning rod for pay criticism since 2010,
when a five-year share bonus programme topped up his regular
salary to 90 million francs.
Shareholders grilled Dougan and other top executives over
their pay at Credit Suisse's shareholder meeting on Friday.
"As the saying goes, a fish rots from the head down. In this
case, the head is Brady Dougan," retail shareholder Ernst Schmid
told the shareholder meeting before asking Dougan to step down.
However, two pay-related votes were ultimately approved.
Negotiations between Credit Suisse and the U.S. Justice
Department to resolve the long-running investigation have heated
up since Dougan testified before a Senate panel in February.
There, Dougan said the bank would accept wrong-doing by its
staff, blaming a small group of Credit Suisse's private bankers
for the behavior.
On Friday, Swiss asset management firm Swisspartners Group
agreed to pay $4.4 million as part of the tax evasion probe, a
move that could influence the course of the Credit Suisse case,
according to a source familiar with the bank's investigation.
($1 = 0.8861 Swiss Francs)
(Additional reporting by Oliver Hirt and Joshua Franklin;
Editing by Erica Billingham)