By Joshua Franklin and Oliver Hirt
ZURICH Credit Suisse's top managers and board of directors were grilled by shareholders on Friday over the Swiss bank's decision to pay out millions in bonuses despite losing 2.7 billion Swiss francs ($2.7 billion) last year.Unrest over pay packets at Switzerland's second-biggest bank had already pressured Credit Suisse's senior management team, led by Chief Executive Tidjane Thiam, to take a voluntary 40 percent bonus cut."Let's put an end to the robber barons!" investor activist Hans-Jacob Heitz urged shareholders at Credit Suisse's annual general meeting in which others also criticised the payouts. At the meeting, shareholders were asked to vote on short-term bonuses for the executive management worth a total of 17 million francs.The payouts were approved, but the level of support plummeted with 59.5 percent voting in favour against 81.5 percent in the corresponding vote last year.Shareholders also backed the proposed board pay as well as fixed compensation and long-term bonuses for senior management by wider margins.
Investors in Swiss companies have veto power over executive and board compensation thanks to a referendum in 2013. A majority must vote against proposed compensation to block it.TROUBLE IN THE PIPELINE
In a further sign of unrest over Credit Suisse's compensation policy -- criticised for an apparent disconnect between pay and performance -- 40 percent of voters opposed the 2016 compensation report, more than double the opposition at last year's AGM."It is my job to prevent such a low vote in future," Chairman Urs Rohner said after the vote.
Rohner, 57, went into the AGM facing calls to step down but was still comfortably re-elected to another one-year term as chairman with 90.6 percent of the vote, down only slightly from a year earlier."With a result of over 90 percent, I see myself supported by the trust from shareholders," Rohner said after the vote.But he too felt the anger from investors who were unimpressed with management's claim that "legacy issues" from the previous leadership were behind back-to-back annual losses.
"You are the last remaining legacy issue," retail investor Charles Guggenheim told Rohner.Activists from environment group Geenpeace interrupted the meeting during Thiam's speech by unfurling a banner from the ceiling protesting Credit Suisse's dealings with companies behind the controversial Dakota Access Pipeline."When I moved here, I was told that this was a very quiet, mountainous, stable nation," Thiam, who joined Credit Suisse from British insurer Prudential in mid-2015, said to applause from investors. "This is more excitement than I expected."($1 = 0.9922 Swiss francs) (Editing by Michael Shields and Edmund Blair)
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Updated Date: Apr 28, 2017 23:30 PM