Credit Suisse top executives and board members caved to shareholder pressure on bonus pay last week. Three influential shareholder groups remain unconvinced.
Zurich-based Credit Suisse surprised investors on Friday – a major holiday in large parts of the world – by announcing that Chief Executive Tidjane Thiam and the 11-member top management around him would forgot 40 percent of their bonuses.
The Urs Rohner-led board also decided not to lift its pay on the year, reversing earlier plans for a pay rise.
The decision is historic: it is the first time in Swiss corporate history that a firm has buckled under shareholder pressure on the hot-button issue of bonuses. The Swiss bank had run the risk of investors voting down individual pay items after three influential shareholder groups had advocated broadly rejecting Credit Suisse's pay policies.
Not Enough
On Tuesday, the most influential U.S. investor group, Institutional Shareholder Services, said it still recommends that its clients refuse Credit Suisse's pay policies, according to a document seen by finews.com.
ISS said Credit Suisse's concessions «represent positive steps» because they acknowledge that shareholders are swallowing a massive annual loss this year.
«However, they come at the end of a flawed process where shareholder interests were not adequately taken into consideration. For this reason, the non-binding vote on the remuneration report , which documents this deficient process, still merits shareholder opposition.
«Too Little, Too Late»
The American group seems to also be arguing procedural reasons: Credit Suisse hasn't altered the originally proposed pay items – the top echelon has voluntarily forgone some of its pay. The Swiss bank can only introduce new pay proposals at its next shareholder meeting if this year's are rejected.
The steps taken by Rohner and Thiam, which the bank said were based on «dialogue with many Credit Suisse shareholders,» appears not to have completely swayed key investors and shareholder groups.
Swiss-based Ethos Fund told «NZZ am Sonntag» (story appears in print edition) that it is still calling for Rohner to go. Glass Lewis, an American shareholder group, told Swiss broadcaster SRF that the move is «too litte, too late».
