The Swiss government has banned Credit Suisse from paying deferred bonuses awarded before 2022, in a move that has further upset staff at the failing bank.
The federal finance ministry said on Tuesday it had imposed “bonus measures” on Credit Suisse as a result of the use of taxpayer money to facilitate the $3.25 billion takeover of rival UBS.
“More good news,” said one Credit Suisse banker. “Maybe UBS will turn up and find that they have bought empty offices . . . our shares are almost worthless.”
Credit Suisse’s management tried to avert a mass strike by promising to maintain fixed wages. “We will pay the salary and bonuses, if due, according to the previously announced schedule,” the bank said in an internal email Sunday night.
But the Federal Council, the executive body in Switzerland, ordered Credit Suisse not to pay the compensation for previous years, while allowing the bank to pay the bonuses awarded for 2022 for the sake of “legal certainty” and “to avoid affecting employees who themselves did not cause the crisis.”
The Federal Council also asked the Finance Ministry to put in place plans to control payments to Credit Suisse employees for all future bonus payments.
Public anger over bankers’ bonuses has remained high in Switzerland since the financial crisis. Protests erupted in Zurich on Monday in front of the Credit Suisse headquarters over the proposal to use public money in the bailout deal. Bern has written a CHF9 billion guarantee to UBS to support it absorb its rival and has authorized a CHF100 billion liquidity support facility from the Swiss National Bank.
Swiss political parties of all stripes have been uproaring the bailout. The largest, right-wing populist Swiss People’s Party, said Credit Suisse bankers had “taken millions out of their salaries without taking responsibility”.
The country’s second-largest party, the Social Democrats, has pledged legislation to ban all bonus payments and cap salaries at all large state-aided banks.
A second Credit Suisse banker said: “We thought it couldn’t get any worse and it did. Basically, it looks like the government is helping UBS dissolve the investment bank while cutting everyone’s salaries.”
A third said, “We’re not entirely clear what will happen next, but morale is almost too low to describe.”
The Finance Ministry declined to comment on whether refund procedures were also under consideration. Credit Suisse paid its bankers CHF972m last year as part of deferred bonuses from previous years. Credit Suisse declined to comment on the government’s intervention.
According to the company’s annual report, released last week, at the end of 2021, Credit Suisse’s bankers owed CHF2.793 billion ($3 billion) in deferred compensation, based on the bank’s share price at the time. At the end of 2022, deferred compensation of CHF 1.25 billion was due.
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