Shareholder groups have been highly critical of Credit Suisse's million-Swiss franc bonus policies. One major shareholder is coming out in support of the Swiss bank's chairman.
Credit Suisse's shareholder meeting is looming next week, but chairman Urs Rohner can count on at least one of its major shareholders to vote in support of the Swiss bank's controversial pay policies.
American fund investor Harris Associates will vote in support of Credit Suisse on compensation, fund manager David Herro told finews.asia. The bank's top echelon was forced to back down on some of its bonus pay after massive opposition from investors, shareholder groups, and the public.
«We were in favor of the past proposals and are in favor of the revisions», Herro said. The investor, Credit Suisse's second-largest shareholder after Qatar's sovereign wealth fund, argued that current CEO Tidjane Thiam shouldn't be taken to task for previous management's mis-steps.
«Not Punish Management»
«We feel it is important to reward today’s management for today’s achievements, not to punish today’s management for actions that took place outside of their tenures, as ISS, Glass Lewis and others suggest,» Herro said.
Shareholder groups had criticized major paydays for Rohner and Thiam for a loss-making year in which it ponied up nearly $5.3 billion to settle allegations that it mis-sold mortgage securities in the run-up to the financial crisis. A Swiss say on executive pay law which came into effect three years ago guarantees shareholders the right to approve or reject specific pay items.
Investor vs Shareholder Groups
The explicit show of support for Credit Suisse head Thiam comes after Herro used weakness in the bank's stock price to bolster his position recently.
«Mr. Tidjane and his team have made great progress at stabilizing and improving Credit Suisse since their tenure. We believe his efforts already are showing up and there will be a better, stronger Credit Suisse in the future,» Herro said.
His comments are counter to those from major shareholder organizations such as Institutional Shareholder Services, Glass Lewis and Ethos Fund, which have all voiced opposition to Credit Suisse's pay scheme this year and could mobilize upwards of 30 percent of shareholders with their recommendations.
Norwegian Backing
Executive pay has also been a closely-watched issue for Norway's sovereign wealth fund, another major Credit Suisse investors. Norges said it had held a number of meetings with Rohner and other board members, welcomed the climbdown, and would now support Credit Suisse's pay proposals.
«The board has listened to shareholder concerns related to remuneration resolutions at the Credit Suisse AG annual general meeting,» Norges said in a statement.
ISS also revisited its opposition, saying overnight it will back three of four bonus schemes proposed by Credit Suisse, but still oppose a 17 million Swiss franc short-term bonus pool for Thiam and his 11-member top management. The group also plans to oppose the overall compensation report, which is merely a consultative vote.
