Credit Suisse planning to restructure banker pay

Bloomberg

Credit Suisse Group AG is reviewing banker pay to better align compensation with shareholder interests, after a tumultuous year in which the firm was buffeted by the Archegos Capital Management and Greensill Capital crises.
The Swiss lender should give senior-ranking employees more of their remuneration in shares, with long deferral periods and the ability to take back compensation that’s already been paid out, Chairman Antonio Horta-Osorio said at a virtual Financial Times conference. The Zurich-based bank plans to submit
the proposed changes at its shareholder meeting in April.
Compensation should include more deferred pay to “make sure the consequences of decisions today” are fully evaluated, he said. Organizations also need the ability “to claw back that remuneration, not as a matter necessarily of guilt but as a
matter of accountability.”
Credit Suisse is seeking to move past a turbulent period that saw it lose $5.5 billion in the blowup of family office Archegos and have to unwind client funds that it managed with Greensill Capital. It presented a revamped strategy last month that included exiting the prime brokerage business and combining
its disparate wealth units into a
single global business.
The new pay structure would take into consideration the cost of capital, and measure staff across the bank on risk-management metrics, according to Horta-Osorio, who succeeded Urs Rohner as chairman in April.
“I do think that people in general, either in sports or in banking or any other field, they should be paid according to performance and they should be paid according to market conditions,” he said.
In the aftermath of the Archegos scandal, the bank ousted nine executives and recouped about $70 million in pay, including bonus claw-backs, as it punished 23 people in all for the events that shook the bank.