by During a meeting on 5 April 2023, Switzerland’s Federal Council decided to axe or cut the bonuses of around 1,000 people at Credit Suisse. © Octavian Lazar | Dreamstime.comThe move follows a rushed acquisition deal involving UBS and the Swiss authorities after a bank run threatened Credit Suisse’s solvency in mid-March. Switzerland’s Banking Act allows the Swiss government to impose remuneration-related measures if a systemically important bank is directly or indirectly granted state aid from federal funds, which is the case under the deal involving Credit Suisse’s acquisition. Among other things, the deal includes federal guarantees for liquidity of CHF 100 billion provided by the Swiss National Bank to Credit Suisse and a CHF 9 billion federal government backstop against any
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During a meeting on 5 April 2023, Switzerland’s Federal Council decided to axe or cut the bonuses of around 1,000 people at Credit Suisse.
The move follows a rushed acquisition deal involving UBS and the Swiss authorities after a bank run threatened Credit Suisse’s solvency in mid-March.
Switzerland’s Banking Act allows the Swiss government to impose remuneration-related measures if a systemically important bank is directly or indirectly granted state aid from federal funds, which is the case under the deal involving Credit Suisse’s acquisition. Among other things, the deal includes federal guarantees for liquidity of CHF 100 billion provided by the Swiss National Bank to Credit Suisse and a CHF 9 billion federal government backstop against any losses incurred by UBS when selling certain Credit Suisse assets.
The degree of the bonus cuts will depend on the level of seniority. All outstanding variable remuneration up to the end of 2022 will be cancelled for the highest level of management (Executive Board), reduced by 50% for members of management one level below the Executive Board and reduced by 25% for members of management two levels below the Executive Board. This differentiated approach is designed to reflect the level of responsibility for the situation at Credit Suisse. It will affect around 1,000 employees, who will be deprived of a total of approximately CHF 50 to 60 million, roughly 10% of all of the bank’s bonus and deferred remuneration. Overall, Credit Suisse staff had already lost significant pay after the fire sale of the bank to UBS wiped around CHF 2 billion off the value of stock related rewards.
Credit Suisse is also required to examine the possibility of recovering variable remuneration already paid out and to report to both the FDF and FINMA on the matter.
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