Tidjane Thiam, the CEO of Credit Suisse Group/Bloomberg
Credit Suisse posted three consecutive-annual losses before returning to profit last year following a sweeping restructuring programme led by Tidjane Thiam.
Sunday 24, March 2019
(Bloomberg) --Credit Suisse Group boosted Chief Executive Officer Tidjane Thiam’s compensation by about 30 per cent even as the stock slumped, a move that risks reigniting a debate over the size of executive payouts at the Swiss lender.
Thiam, who delivered the first annual profit in four years, saw his pay for 2018 rise to CHF 12.7 million ($12.7 million), according to the bank’s compensation report. A large part of the increase was to compensate the CEO for reducing his long-term bonuses in response to shareholder objections.
Without last year’s pay cut, the increase for 2018 would have been 13 per cent, Switzerland’s second-largest bank said. The overall bonus pool was unchanged from last year at 3.2 billion francs, though many top performers received bigger awards, the lender said.
“Differentiation has been made such that high-performing employees received year-on-year increases in variable incentive compensation,” said Kai Nargolwala, who heads the board compensation committee.
The executive pivoted the bank to wealth management, cut costs and raised more than CHF 10 billion in fresh equity to fund the restructuring.
Still, the overhaul ended with a whimper as continued losses at the bank’s trading unit weighed on the company’s share price. Analysts continue to call on the former insurance executive to improve the unit’s performance.
The bump in pay risks reigniting a discussion over the size of executive payouts at the Swiss lender, which had subsided after the executive board took a voluntary pay cut last year in the face of shareholder criticism. Sergio Ermotti, who leads larger competitor at UBS Group, earned CHF 14.1 million ($14 million) last year, down from CHF 14.2 million in 2017.
The global-markets business posted a larger-than-expected loss of CHF 193 million ($191 million) in the fourth quarter, offsetting wealth-management and investment-banking results that beat estimates. Thiam, a former insurance executive, is under pressure to boost performance of the unit that trades bonds, stocks and derivatives.
Credit Suisse last year introduced changes to its compensation policy after a shareholder backlash. The bank dropped capital metrics for its short-term awards, increased the importance of cost targets and introduced return on tangible equity as a measure for long-term incentives.