Zurich: Credit Suisse launched a defence of its big bank structure and the bonus culture on Friday and made its first top management change since the financial crisis.
The bonus structure “helped us manage through the crisis”, CEO Brady Dougan told shareholders at the bank’s annual meeting, and chairman Hans-Ulrich Doerig added that calls to break up the banks in the aftermath of that crisis would be a “spectacular own goal”.
The bank also said it would replace its chief financial officer Renato Fassbind, who helped steer the bank through the financial crisis and shaped its integrated business model in his six-year tenure, with insider David Mathers.
The bank would not elaborate, but according to a source close to the management the decision to step down was Fassbind’s own.
Mathers, 44 and a former head of European equity research who joined Credit Suisse from HSBC in 1998, is currently chief operating officer and head of finance of the Swiss bank’s investment banking division. “Coming from the internal ranks we believe Mr. Mathers has a good understanding of Credit Suisse and its business as well as a good network...which in our view is topical for the position.”
Fassbind, 55, one of several top Credit Suisse executives to have benefited from a generous option package this year, will step down in October but stay on as a senior advisor at Credit Suisse.
Contrary to many competitors, Credit Suisse’s top management team has been stable throughout the crisis, which the bank survived without state aid.
Fassbind joined Credit Suisse in 2004 under former chief executive Oswald Gruebel, a turnaround guru who took the helm of crisis-hit rival UBS last year.
Shares in Credit Suisse were up 0.9% by 0751 GMT, compared to a 1.0 rise in the STOXX 600 bank index.
Bonuses in Focus at AGM
Large bankers’ bonuses have become a major concern for investors in Switzerland and elsewhere and nearly 40% of shareholders voted down UBS’ 2009 bonus plan at their annual meeting earlier this month.
Credit Suisse is also facing criticism. Corporate governance advisers RiskMetrics and Ethos, which is also an investor in the bank, are advising shareholders to reject the bank’s compensation plan, written after the G-20 discussed curbs on bankers bonuses last fall.
The vote is non-binding, but would nonetheless send a strong signal to management.
But contrary to UBS, Credit Suisse posted a profit in 2009.
“Compensation will certainly be an issue at the AGM, but the whole thing is much less a debate at Credit Suisse than at UBS,” said ZKB analyst Andreas Venditti. “The problem that the public sees is that if a company is loss-making (like UBS was in 2009), it should not pay bonuses at all.”
CEO Brady Dougan, who steered the bank through the crisis without state aid, became one of the world’s highest paid bankers after he was awarded shares worth around 71 million Swiss francs in a five-year incentive plan.
This came on top of about 19 million Swiss francs he cashed in in 2009. Credit Suisse did not disclose in its annual report how much CFO Fassbind had made, as it does not provide pay details of individual executive board members.