Credit Suisse CEO pockets
$12 million despite back-to-back losses
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[March 24, 2017]
By Joshua Franklin
(Reuters) - Credit Suisse Chief Executive Tidjane Thiam's pay for his
first full year in the job swelled to 11.9 million Swiss francs ($12
million), while bonuses rose 6 percent despite back-to-back annual
losses at Switzerland's second-biggest bank.
Executive pay is a hot-button issue in Switzerland, with voters backing
a "fat cat" referendum in 2013 giving shareholders a binding vote on
Thiam's pay packet followed a near-3 billion franc loss at Credit Suisse
in 2016 amid a major restructuring and penalties for the sale of toxic
mortgage debt in the run-up to the financial crisis.
"Overall, the board considered Mr Thiam's strong leadership, consistent
execution of the group's communicated strategy, effective delivery of
cost efficiencies, principled and ethical conduct, and his role in
driving the group toward a stronger capital position in determining that
Mr Thiam had met his performance targets set for the year," the bank
said in its annual report on Friday.
Thiam, a former Ivorian government minister who is reshaping the bank by
boosting wealth management and scaling back investment banking, earned
4.57 million francs in 2015 after joining Credit Suisse from British
insurer Prudential at mid-year. He had requested a 40 percent bonus cut
Chairman Urs Rohner's compensation rose to 3.98 million francs in 2016
from 3.2 million. The bank's bonus pool increased to 3.09 billion
Rival UBS <UBSG.S> paid Chief Executive Sergio Ermotti 13.7 million
francs last year and cut its bonus pool by 17 percent to 2.9 billion
francs. Deutsche Bank CEO John Cryan took home 3.8 million euros ($4.1
million) last year.
Credit Suisse upped its net loss for 2016 to 2.71 billion francs from
2.44 billion after agreeing in principle to settle a residential
mortgage-backed securities (RMBS) case with the National Credit Union
Administration Board in the United States.
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Tidjane Thiam, Chief Executive Officer of Swiss bank Credit Suisse
attends the session "The Global Economic Outlook" during the annual
meeting of the World Economic Forum (WEF) in Davos, Switzerland
January 23, 2016. REUTERS/Ruben Sprich/File Photo
cut the bank's common equity tier 1 ratio, a closely watched measure of balance
sheet strength, to 11.5 percent from 11.6 percent, heightening its need to raise
Suisse's current plan is to raise up to 4 billion francs via an initial public
offering (IPO) of a minority stake in its Swiss banking division.
However, it is also considering a quick-fire share sale at group level and its
board of directors is set to decide in April how to proceed, Reuters has
A speedy share sale via a so-called accelerated bookbuilding (ABB) could be a
simpler solution, according to Bernd Ackermann, who covers Credit Suisse for S&P
"In terms of the money it can raise, it is neutral to our ratings if it's
through the IPO or an accelerated bookbuilding," Ackermann told Reuters on
"But it could be better not to have the more complicated, fragmented structure
you'd get through the IPO."
One hurdle to clear for an ABB is the amount of new stock shareholders authorize
the bank to issue. In its invitation to next month's annual meeting, it proposed
increasing its authorized capital only for its scrip dividend.
(Editing by Mark Potter)
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