Credit Suisse’s short-lived bonus expansion for its top management has already been met with investor backlash, given the group’s recently reported -$2.4 billion loss in 2016 and other industry headwinds facing the lender.
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Last month, Credit Suisse announced an expansion in its bonus pool by 6.0 percent, along with a sizable bump for top management, including CEO Tidjane Thiam. The move was came at a time when other lenders were embarking on a different course altogether, such as Deutsche Bank, which gutted its bonus pool and opting for different payout strategies in the form of shares.
The move did not sit well with many rank and file, as well as investors, given the announcement occurred on the back end of a fresh round of job cuts – these losses were restricted to jobs in its Asian equities desks, as well as another 5,500 positions forthcoming, casting a shadow on its 2017 outlook.
For its part, Credit Suisse is in the midst of its restructuring plan, with Mr. Thiam pledging a turnaround for the lender. Like its other European counterparts, lenders have struggled to restore profitability, also grappling with the upcoming Brexit schism that is unlikely to Yield any positives for the banking community, especially in the UK.
Given the opposition and negative press surrounding the move, Mr. Thiam offered to have their bonuses cut 40 percent, a fact made more plausible after investor advisory groups opposed the packages ahead of this year’s annual meeting. In addition, Mr. Thiam and the executive board volunteered to shrink long-term incentive awards for 2017 and short-term incentive awards for 2016, according to a Bloomberg report.
