Executive board members, including CEO Tidjane Thiam, will have their long-term incentive awards for 2017 and short-term awards for 2016 both cut by 40%, the Swiss investment bank said this morning.
Total board compensation in 2017 will stay at the level of 2015 and 2016.
Credit Suisse has posted two straight years of losses, though its remuneration committee decided its executives had delivered well against their targets for 2016.
Some shareholders were concerned a write down on the value of a previous acquisition and losses associated with investments in toxic mortgage-backed securities during the financial crisis weren’t accurately reflected in the compensation of current management, the company said.
“My highest priority is to see through the turnaround of Credit Suisse, which is under way,” Thiam wrote in his annual letter to shareholders. “I hope that this decision will alleviate some of the concerns expressed by some shareholders and will allow the executive team to continue to focus on the task at hand.”
Separately, AIG said yesterday that its board had declined to award outgoing CEO Peter Hancock a bonus after the U.S. insurer racked up a deeper-than-expected quarterly loss. Hancock’s total remuneration for 2016 fell 23% as a result.
And about a week ago, BP cut CEO Bob Dudley’s total 2016 remuneration package by 40%, as persistently low oil prices and expenses associated with a disastrous oil spill kept the company in the red.
As previously reported by Chief Executive, turnaround CEOs like Dudley, Hancock and Thiam can face a tougher a task than boom-time managers. Investor tolerance for financial losses, however, is weak amid a wider societal backlash against the establishment.
Credit Suisse investors haven’t had much cause to celebrate: its shares have never recovered since the financial crisis and are substantially lower than they were when Thiam took the reins in June, 2015.
“Our decision reflects the total confidence we have in the progress we are making,” Thiam wrote. “Although that progress is not yet reflected in our share price, I am confident that our strategy and our disciplined execution will in due course create value for you, our shareholders.”