This year, Zürcher Kantonalbank (ZKB) is capping bonuses at the 2022 level. The bank is reacting to the political discussions about bank wages. ZKB is also generally adjusting its remuneration model: the fixed salaries for employees are to increase.
After last year’s record profit, the next one is already on the horizon for ZKB. Business has been positive since the interest rate turnaround. The bank expects a “jump in profits” for 2023. In view of this and because of the bonus discussions after the collapse of Credit Suisse, ZKB has decided to decouple variable compensation from the 2023 business results.
For the 2022 financial year, ZKB distributed a total of 349 million francs to its employees in the form of variable remuneration, i.e. bonuses. This sum should not be exceeded, at least for 2023. The bank is also reducing the percentage of variable remuneration in total remuneration, as it writes in a statement.
Specifically, ZKB employees should receive more fixed wages instead of bonuses as of January 1, 2024. There are two reasons for this, says human resources manager Peter Luginbühl: “On the one hand, we react to the social and political discussion. On the other hand, fixed salaries have remained stagnant in recent years. We want to correct that.”
Locked variable share for squad doubled
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The ZKB also wants to align the remuneration model for senior managers more closely with long-term economic interests. For members of the management and “key people”, the so-called blocked variable share was doubled.
This long-term salary component is blocked for three years and is only paid out under certain conditions. From 2024, the blocked share will increase to 50 percent for members of the General Directorate and to 30 percent for key personnel. (awp/sda)
CS collapse fuels debate
This year there was discussion Credit Suisse collapsed. The federal government had to quickly initiate the takeover by UBS and support it financially. Politicians then turned their attention to the wages of bank managers – some spoke of a rip-off.
Legend: The wage discussions after the collapse of Credit Suisse also reached the Zürcher Kantonalbank. Keystone/WALTER BIERI
The Zurich Cantonal Council also explicitly discussed ZKB’s wage policy in April. Three left-wing politicians called for a wage cap for the bank’s top management, but this failed in the vote. Nevertheless, the bank reacted: the president of ZKB announced a revision of the remuneration model in an interview with the “Neue Zürcher Zeitung”.
More and more bonuses
Due to the positive business results, variable remuneration has become more important at ZKB in recent years. While profits rose by 42 percent between 2012 and 2022, the total bonuses grew by 124 percent – the number of employees only increased slightly.
According to human resources manager Luginbühl, employees should participate in the bank’s success with variable remuneration. “If the results continue to develop as well as they have in recent years, then participation should also be possible, but to a different extent than before,” he says.
Luginbühl cannot yet say what proportion the variable remuneration will have in the total salary. We are currently still working on revising the calculation model for variable compensation for future years.