Credit Suisse Shareholders Approve Bonus Packages

By Brian Blackstone Features Dow Jones Newswires

shareholders on Friday approved bonus packages for top executives but by a narrower margin than last year, reflecting anger at the size of the bonuses even after the bank reduced them earlier this month.

Continue Reading Below

Shareholders approved the short-term bonus plan for executive board members with 60% in favor and 38% against with the rest abstaining. More than 80% voted in favor last year.

The bank created a stir in March by announcing it increased its bonus pool by 6% and raised the total pay of Chief Executive Tidjane Thiam to 11.9 million Swiss francs ($12 million) despite posting a pretax loss of 2.3 billion francs in 2016. The loss was largely due to charges related to a settlement with U.S. authorities over mortgage-backed securities cases that occurred before Mr. Thiam joined the bank.

Faced with shareholder criticism, Credit Suisse changed course earlier this month and said it would cut the senior executive bonuses by 40%. As a result, the short-term bonus pool for executive board members was cut to 17 million francs from the originally proposed 26 million francs.

Speaking to reporters Wednesday after reporting first-quarter earnings, Mr. Thiam said: "We made the gesture without any pressure from anybody" and the bank can now "focus on the task at hand." Credit Suisse reported first-quarter posted net income of 596 million francs, exceeding analyst expectations.

Mr. Thiam's pay will still be paid 10.2 million francs after accounting for the bonus cut.

Continue Reading Below

The Swiss banking giant sought to diffuse the furor among some shareholders and advisory organizations over executive pay at Friday's shareholder meeting, with the head of the board's compensation committee adding he was "particularly distressed" by the reaction.

"We seriously underestimated the reactions of those on the outside," said Jean Lanier, chairman of the compensation committee. "We take the comments very seriously."

But many shareholders weren't ready to turn the page, with a stream of them addressing the shareholders meeting to denounce the pay packages.

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

April 28, 2017 13:02 ET (17:02 GMT)