Switzerland curbs bonus payouts at Credit Suisse

Swiss authorities imposed curbs on bonus payments for Credit Suisse employees, a move that will penalise bankers after a multi-billion-franc state rescue of the bank.

Swiss authorities imposed curbs on bonus payments for Credit Suisse employees, a move that will penalise bankers after a multi-billion-franc state rescue of the bank. Switzerland's government announced on Tuesday that Credit Suisse was ordered to "temporarily" suspend "already granted but deferred variable remuneration" - like shares - awarded in the years up to 2022.

The government said that it would not retroactively ban already paid or immediately payable bonuses for the year 2022. "The aim of this is also to avoid impacting employees who did not themselves cause the crisis," it said.

Some among the Swiss public have been outraged by bonus payments at the bank in the wake of a takeover backed by roughly 260 billion Swiss francs ($280 billion) of state funding and guarantees. Swiss unions earlier on Tuesday had demanded that management bonuses be halted. Bank employee groups have also been angered by potential job losses, demanding special protections.

"It has to be read as recognition that major mistakes have been made at Credit Suisse and it would be so inappropriate if the board received any variable compensation at this time," said Clive Howard, employment law partner at Keystone Law. It was unclear how many employees would be affected. Credit Suisse declined to comment.

Battered by years of scandals and losses, Credit Suisse for months had been battling a crisis of confidence. Its demise was sealed in a matter of days last week, and Swiss authorities over the weekend brokered a takeover of the bank by its larger rival UBS. The takeover created angst among staff about their bonus payouts.

Credit Suisse's executive board took home 32.2 million Swiss francs in fixed compensation for 2022 but collectively went without a bonus for the first time in more than 15 years. The bank's bonus pool shrank by 50% in 2022 to 1 billion Swiss francs, according to its annual report.

The Swiss government also instructed its finance ministry to propose further measures on variable remuneration for Credit Suisse.

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