Swiss Federal Council: Government cuts bonuses at Credit Suisse

As of: 04/05/2023 8:53 p.m

1,000 top Credit Suisse bankers have had to forego bonus payments in whole or in part. The Swiss Federal Council decreed. This takes into account the “responsibility” of the managers for the decline of the money house.

Bonuses will be removed from senior management at Credit Suisse. Around 1,000 managers have to partially or completely forego the bonuses. That was decided by the Swiss government – the Federal Council.

This takes into account the “responsibility” of top managers for the decline of the ailing bank, whose collapse was prevented by rival UBS, the Federal Council said. He also ordered that future bonuses at UBS be linked to risk-aware management and the non-utilization of state guarantees.

The premiums will also be canceled for 2023

At Credit Suisse, the management loses all outstanding variable compensation. The bonuses of the second and third management levels will be reduced by half and a quarter respectively. According to the government, the managers lose a total of between 50 and 60 million Swiss francs (50 to 60 million euros) in bonuses that can be attributed to the previous year.

There is no estimate for 2023 yet. However, the Federal Council has already determined that all premiums due to the top three management levels will be canceled or reduced in 2023 until the takeover by UBS is fully completed.

“Credit Suisse must also check whether variable remuneration that has already been paid out can be reclaimed,” said Bern. The bank will also be obliged to report to the Ministry of Finance and the Swiss financial regulator Finma. Those affected have the opportunity to appeal against the cuts before the Federal Administrative Court.

Billion dollar bailout

The Swiss Banking Act stipulates that the Federal Council will take remuneration-related steps if a systemically important bank receives direct or indirect state aid. This is exactly the case at Credit Suisse. It got into trouble in March after scandals and outflows of money in the hundreds of billions.

The Swiss government then orchestrated a rescue operation: the money house was saved by an emergency sale to the major bank UBS. UBS pays CHF 3 billion for Credit Suisse. The federal government and the Swiss National Bank (SNB) are supporting the rescue operation with liquidity assistance of up to 100 billion Swiss francs.

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