Credit Suisse plans low bonus pool increase
Bank making progress on its three-year restructuring plan
ZURICH: Credit Suisse Group AG, Switzerland’s second-largest bank, plans to increase its bonus pool for last year as the lender makes progress on its three-year restructuring plan, two people familiar with the plans said.
The pool may increase by a low single-digit percentage, but is yet to be finalised, said one of the people, who asked not to be identified as the matter is private.
Swiss newspaper Schweiz am Wochenende earlier reported that the pool would probably increase by about 10%. Credit Suisse declined to comment.
The bank is entering a final year of restructuring to focus on wealth management and investment-banking advisory services, reducing its reliance on trading-related businesses.
Chief executive Tidjane Thiam, who agreed to accept a lower bonus for 2016, in November said that bankers shouldn’t expect a big raise for 2017 as Credit Suisse emerges from two years of restructuring and cost cuts.
Thiam and the executive board agreed to have their proposed bonuses cut by 40% in April 2017 after investor advisory groups opposed their original packages.
The lender awarded 3.09 billion Swiss francs (US$2.6bil) in incentive pay for 2016, a 6% increase from a year earlier.
Charges tied to legal settlements pushed the bank to a second consecutive annual loss that year.
Andrea Orcel, UBS Group AG’s head of investment banking, said late in 2017 that it was a “tricky year” for compensation in the financial industry, but that his bank had done slightly better than the previous year and that his view was “neutral positive, not neutral negative.”
UBS cut the bonus pool for 2016 by 17% to 2.9 billion Swiss francs.
For last year, the amount will rise by a single-digit percentage, according to Schweiz am Wochenende.
A spokesman for the bank declined to comment.
UBS, set to report full-year results today, and Credit Suisse are grappling with historically low volatility and will be negatively affected by US tax reforms for 2017.