Credit Suisse Group AG shareholders backed the firm’s compensation report, even as some investors criticized rising pay at Switzerland’s second-largest bank.
Investors approved the report in a non-binding vote at the annual shareholders’ meeting in Zurich today, with about 81 percent support. Shareholders also backed a change in Credit Suisse’s articles of association to allow binding votes on compensation in the future, in line with changes is Swiss law.
Ethos, a foundation that advises institutional investors on governance, recommended opposing the bank’s compensation report. The foundation counsels institutions that collectively control 3 percent of Credit Suisse’s capital, and is the biggest shareholder adviser in Switzerland, said Dominique Biedermann, Ethos’s chief executive officer.
“It is shocking that management compensation has been increasing ever more for two consecutive years,” Biedermann said. “It is high time to show the board of directors that many shareholders have lost their trust in them. We are no longer willing to support the way our bank is being managed.”
Switzerland’s second-biggest bank raised CEO Brady Dougan’s pay by 26 percent last year after the bank missed targets it set for profitability and costs as a proportion of income for the year. Management pay will continue to be scrutinized by shareholders as Credit Suisse introduces a binding vote on pay.
“Total compensation has been reduced massively over the past years,” the bank’s Chairman Urs Rohner said, responding to shareholder criticism. “I know that in our industry compensation to some extent remains very high.”
Say on Pay
Several shareholders joined Biedermann’s criticism of management pay at Credit Suisse. Among them was Rudolf Meyer, chairman of shareholder group Actares. He was given the authority to vote on behalf of about seventy shareholders who collectively own more than 170,000 shares in Credit Suisse, Meyer said today before the gathering.
Credit Suisse’s shareholders will have a binding vote on management compensation for the first time at next year’s gathering. All publicly traded Swiss companies have to implement a binding shareholders’ say on pay by 2015 after the so-called fat-cat initiative was approved by Swiss voters.
UBS AG’s shareholders approved changes to the company’s articles of association on May 7 allowing for future binding votes on compensation. Shareholders of Switzerland’s biggest bank voted 86 percent in support of its 2013 compensation report in a consultative vote.
Shareholders narrowly approved Credit Suisse’s proposal to increase conditional capital that could be used to issue new shares as part of employee compensation. The proposal got 67.7 percent support, and needed at least 66.7 percent to pass.