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Credit Suisse execs take 40 percent bonus cuts after outcry

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Credit Suisse execs take 40 percent bonus cuts after outcry
Credit Suisse chief Tidjane Thiam and the bank's executive board offered to cut their bonuses. Photo: Fabrice Coffrini/AFP
13:49 CEST+02:00
Credit Suisse's chief and other top executives offered on Friday to have their bonuses slashed by 40 percent, following investor concern over the size of their proposed compensation packages.

Credit Suisse chief Tidjane Thiam and the bank's executive board proposed that the "long-term incentive awards for 2017 and short-term incentive awards for 2016 ... be reduced by 40 percent each," according to a statement.

The board of directors would also leave its compensation unchanged at the same level as 2015 and 2016, and would not accept a proposed incremental increase, it added.

"My highest priority is to see through the turnaround of Credit Suisse which is under way," Thiam said in a letter to shareholders published on riday.

"I hope that this decision will alleviate some of the concerns expressed by some shareholders and will allow the executive team to continue to focus on the task at hand," he added.

The move came after Credit Suisse's compensation committee last month proposed handing Thiam and the bank's 12 other executive directors 26 million Swiss francs ($26 million, €24 million) in short-term bonuses for 2016 and up to 52 million francs in long-term bonuses.

Ahead of its annual meeting on April 28th, Switzerland's second largest bank has also asked investors to give chief executive Tidjane Thiam nearly 12 million francs in total for his first full year on the job in 2016, after short and long-term bonuses were added to his 3.7-million-franc salary.

The compensation committee had also proposed boosting compensation to the board of directors to 12.5 millions Swiss francs this year.

Several investor advisory groups have voiced outrage over the proposed bonuses, pointing to the bank's $2.7-billion net loss in 2016 following a massive $5.28-billion settlement with US authorities over its role in the sub-prime crisis.

Ethos, which advises major Swiss pension funds and other tax-exempt institutions, described the proposed bonuses as "excessive", insisting that Credit Suisse's "executive management should not have received a bonus in 2016 given the disappointing results of the bank".

Amid market turbulence and legal woes, the bank's stock price plunged more than 30 percent last year.

And as it dramatically reorganised its operations, it slashed 7,250 jobs over the course of 2016, with nearly the same number of jobs expected to go this year.

In a separate letter to shareholders Friday, chairman of the Credit Suisse board Urs Rohner stressed the board's "high degree of satisfaction with the performance of the CEO and the Executive Board in 2016."

But he added that "in light of the current environment and sentiment towards compensation, the board of directors understands the decision made by the CEO and the executive team ... (and) accepts these voluntary and personal decisions with great respect."

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