Credit Suisse executives will have their outstanding bonuses for 2022 canceled or reduced. UBS bonuses could also take a hit.
The Swiss government is canceling outstanding bonus payments of Credit Suisse's top management, it said in a statement Wednesday. The order, which follows the multibillion-dollar government bailout of Switzerland's second-largest bank, applies to around 1,000 bankers at the top three management levels of Credit Suisse.
Senior management will have their outstanding bonus payments through the end of 2022 canceled in full, while payments to managers one level below will be reduced by 50 percent. Outstanding variable payments for managers at levels below will be reduced by 25 percent.
For 2022, 50 million to 60 million Swiss francs ($66 million) in variable compensation are at stake.
Variable compensation due in 2023 for the same management levels are also to be eliminated or reduced on a pro-rata basis until the acquisition is completed.
Audit for 2019
Credit Suisse will also be required to review a clawback of variable compensation already paid to members of the group executive board since 2019 and report to the finance ministry and the Swiss financial authority Finma.
Avoiding Losses
The finance ministry has also ordered UBS to develop a remuneration system to incentivize employees involved in the sale of Credit Suisse assets to minimize losses from sales.
The measure should provide an incentive to achieve the lowest possible losses on the realisation of these assets, in order to avoid the utilisation of the federal guarantee, the statement said.
