Switzerland has instructed Credit Suisse to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether those already paid can be recovered, the Federal Council said on Wednesday.
Under Swiss banking law, the Federal Council can impose bonus-related measures on a systemically important bank if it received state aid from federal funds, according to a statement.
The highly unusual government move comes after a public backlash against bonus payments at the bank, which was forced into a merger with rival UBS and had to be rescued with close to 260 billion Swiss francs ($280 billion) of state funding and guarantees.
The decision “will affect around 1,000 employees, who will be deprived of approximately 50-60 million Swiss francs with these measures,” the council said.
Bonus payments up to the end of 2022 will be cancelled for the Executive Board, and then halved for management one level below the board and reduced by 25% for those two levels below.
The bank’s top executives had already announced they were not taking a bonus for 2022 in the company’s annual report published in April.
The 2022 bonus pool for the Swiss bank’s close to 50,000 employees had already gone down to 635 million Swiss francs from 2.76 billion, because of the drop in the bank’s share price.
The Federal Council added that Credit Suisse must also report to authorities on whether it is possible to recover paid-out bonuses, and also decided to cancel or reduce bonuses for the top three levels of management, accrued until the merger with UBS is complete.
At Credit Suisse’s final annual general meeting held on Tuesday, shareholders took to the stage to voice their opposition to the pay Credit Suisse executives and board of directors received in the lead up to its demise.
The bank’s shareholders approved pay for the board of directors for the time until the merger is complete, but voted against approving compensation for the bank’s executives.
($1 = 0.9049 Swiss franc)
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