Ethos joins Credit Suisse pay revolt, demands change at top

ZURICH (Reuters) - Shareholder advisory firm Ethos rejected all Credit Suisse’s executive pay plans and called for top management changes on Friday, adding to pressure on Switzerland’s second-biggest bank over “excessive” remuneration.

Ethos, with more than 200 Swiss pension funds and institutions, followed Glass Lewis in recommending its members reject paying Credit Suisse’s executive board 25.99 million Swiss francs ($26 million) in short-term bonuses.

“Ethos considers that the executive management should not have received a bonus in 2016 given the disappointing results of the bank,” the foundation said in a statement. Credit Suisse’s pay increase plan comes despite back-to-back annual losses.

The group also urged Credit Suisse shareholders to throw out Chairman Urs Rohner and Vice-Chairman Richard Thornburgh in a binding vote at the April 28 annual general meeting.

“In light of the significant litigation involving the bank in the past decade, the enormous indemnifications and fines paid as well as the lack of strategic vision at board level, Ethos recommends changes at the top at the bank,” it said.

Credit Suisse said it had noted the Ethos recommendations and respected shareholder democracy, but a spokesman for the bank said it did not comment on individual proposals.

Ethos also criticized “the lack of clarity in the current strategy” especially over whether to list a minority stake in its domestic banking unit, adding: “Ethos estimates that changes to the board have become necessary to restore investor trust.”

Ethos rejected the bank’s proposal for a dividend of 0.70 Swiss francs per share given what it called poor results and concerns regarding the bank’s capital ratio.

Credit Suisse posted a near-3 billion franc loss in 2016 amid restructuring and penalties for the sale of toxic mortgage debt in the run-up to the financial crisis.

It is considering alternatives to a previously proposed listing of its Swiss banking unit to raise funds, including a quick-fire share sale, sources have told Reuters.

Influential proxy adviser ISS has yet to issue its recommendations for Credit Suisse investors.

Editing by Michael Shields and Alexander Smith