Switzerland’s second-largest bank, Credit Suisse, has announced changes to its system of awarding bonuses.This content was published on January 10, 2011 - 15:03
In a statement published on its website on Monday, it explains that a larger proportion of the bonuses will be subject to deferred payment, and there will be fewer cash payouts.
It has also lowered the threshold for deferred bonus restrictions, with the result that more employees will be affected. The changes will apply to its 2010 pay round.
The practice of deferring awards reflects the bank’s commitment “to rewarding its employees for performing in a way that creates sustainable value for the Bank and its shareholders over time,” the statement says.
“Credit Suisse is committed to fair, balanced and performance-oriented compensation policies that align long-term employee and shareholder interests.”
Shares allocated to employees for 2010 will be paid in four instalments from 2012 to 2015.
Another new measure is the “clawback” clause, under which the bank can cancel deferred bonuses if bankers engage in activities that damage the bank financially or harm its reputation. This follows guidelines drawn up for European Union at the end of December.
In the face of public indignation over what is seen as the awarding of excessive compensation to bankers even when they have made huge losses, the Swiss government has started a process to tighten regulations over payouts.
Switzerland’s biggest bank, UBS, has already introduced a scheme under which part of the bonuses are only paid if the bank’s results justify it.
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