How many employees are affected? The reduced or eliminated bonuses affect around a thousand Credit Suisse employees, regardless of their place of work. The top three management levels of CS are affected. The outstanding bonuses will be canceled for the executive board, reduced by half for the first management level below the executive board and reduced by a quarter for the second management level below the executive board.
What is the amount? The total amount of deferred bonuses at CS for all employees is CHF 635 million. According to the current state of knowledge, the measure taken by the Federal Council means a total reduction of around fifty to sixty million francs. This affects variable remuneration that accrued up to the end of 2022. Added to this are the pro rata bonuses for the year 2023 until the takeover of CS by UBS is completed. The proportionate remuneration for 2023 cannot yet be quantified. All bonuses of the management concerned that have not yet been paid out and have been postponed are affected.
Why is the Federal Council starting with the three top management levels? What about the board of directors? A restriction to the highest management levels is necessary for reasons of proportionality. Responsibility lies at these levels. The CS board of directors does not receive any variable compensation, but a fixed amount determined in advance by the shareholders’ meeting.
Why is the Federal Council not ordering a repayment? Reclaiming already paid bonuses is governed by private law. The Banking Act provides no basis for the federal government to order refunds. The Federal Council can only instruct Credit Suisse to examine the legal possibilities for a recovery and to report to Finma.
Why aren’t there any measures at UBS despite the billion-euro guarantee? The federal government’s CHF 9 billion guarantee was not necessary because UBS got into trouble. Rather, it was spoken in advance to facilitate a resolution with Credit Suisse. If the bank can no longer offer a competitive remuneration system, there is a risk that this will pose a significant risk to the operational stability and the entire business of UBS. This is to be avoided.
So are there no requirements for UBS? Yes, UBS is obliged to provide a criterion in its remuneration system for those persons who are responsible for the realization of the CS assets affected by the federal guarantee that the state loss guarantee is not claimed. In addition, UBS is required to continue to adequately consider factors such as risk awareness and compliance with rules of conduct in its remuneration system.
Can the banks defend themselves against the measures taken by the Federal Council? Before the final decision on the measures is taken by the Federal Department of Finance (FDF), those affected are granted a fair hearing. The rulings can be challenged at the Federal Administrative Court.