Credit Suisse bonuses have been suspended: the full text
Earlier today we brought you the good news that Credit Suisse bonuses were still being paid. Later today we bring you the bad news that actually they're not. It's not down to Credit Suisse. It's not down to UBS. It's the doing of the Swiss government, which has just posted the following edict on its website.
We have underlined the sections deemed of relevance.
Bern, 21.03.2023 - The Federal Council has acknowledged that the Federal Department of Finance (FDF) is temporarily suspending certain forms of variable remuneration for Credit Suisse employees by means of an order to the bank. This measure relates to already granted but deferred remuneration for the financial years up to 2022, for example in the form of share awards. Moreover, the Federal Council has instructed the FDF to propose further measures on variable remuneration for the financial years up to 2022 and thereafter. It based this on the decisions already taken last week.
Article 10a of the Banking Act stipulates that the Federal Council shall impose remuneration-related measures if a systemically important bank is directly or indirectly granted state aid from federal funds. Based on the resolutions of 16 March 2023, the Federal Council already communicated on Sunday that it would order remuneration-related measures in accordance with Article 10a of the Banking Act (link to Sunday's press release).
On 20 March 2023, the Federal Council acknowledged that the Credit Suisse Executive Board had decided to waive its variable remuneration for the 2022 financial year. For reasons of legal certainty, the Federal Council is refraining from retroactively prohibiting already granted and immediately payable variable remuneration for Credit Suisse employees for the 2022 financial year. The aim of this is also to avoid impacting employees who did not themselves cause the crisis.
However, the Federal Council has taken note of the fact that the FDF is temporarily suspending already granted but deferred variable remuneration for the financial years up to 2022 by means of an order to Credit Suisse. The only exceptions are deferred payments that are already in the process of being paid out. Deferred variable remuneration is a variable salary component that is likewise awarded but is not paid out until a future date, e.g. share awards.
Moreover, the Federal Council has instructed the FDF to propose further measures on variable remuneration for the financial years up to 2022 and thereafter.
In other words, all deferred stock bonuses from the years prior to 2022 won't be vesting any more (this is what's also known as a clawback), unless they're in the process of being paid. But anything from 2022 itself which has already been granted and which is immediately payable is still good.
There are a few questions here...Are bonuses still being accrued for 2023 (as only recently promised)? What about deferred cash bonuses from the pre-2022 years? What does immediately payable mean? Some bonuses are due next week, but others are due April.
If you work for Credit Suisse and you know the answers, let us know in the comments box below.
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