Credit Suisse to revise executive pay structure

Credit Suisse said on Tuesday it would make executives wait three to four years for their bonuses.

The Zurich-based bank, Switzerland’s largest by market capitalisation, will increase the base salary for its executives and will link bonuses to business performance and share prices.

The pay formula takes into effect on January 1, 2010 and applies to this year’s compensation for just over 7,000 senior staff, or about 15 per cent of its workforce, the bank said.

Governments around the world are pressing banks to use compensation packages to limit excessive risk taking.

“At a time of strong focus on executive compensation, we are announcing a compensation structure that enables us to strike the right balance between paying our employees competitively, doing what is right for our shareholders, and responding appropriately to regulatory initiatives and political as well as public concerns,” Chief Executive Brady Dougan said in a statement.

The bank said the new pay formula applies to managing directors, directors and members of the executive board but not to employees at the level of vice president and below.

The bank also introduced minimum share ownership requirements for senior executives.

Credit Suisse introduced deferred compensation programs even before the subprime crisis. It stood out among financial institutions last year when it decided to award toxic assets to bankers as part of their variable compensation.

The new structure is consistent with guidelines announced recently by the Group of 20 major economies.

Wall Street giant Goldman Sachs is set to hand out bonuses of more than $20 billion (SFr20.2 billion) or an average of $630,000 per employee, at the end of the year.

swissinfo.ch and agencies