Switzerland bans deferred bonuses for Credit Suisse staff

The Swiss government has banned Credit Suisse from paying deferred bonuses awarded before 2022 in a move that has sparked more upset from staff at the failed bank.

The federal finance ministry said on Tuesday it had imposed “remuneration-related measures” on Credit Suisse as a result of the use of taxpayer funds to facilitate its merger with rival UBS.

“This measure relates to already granted but deferred remuneration for the financial years up to 2022, for example in the form of share awards,” the federal council, Switzerland’s executive body, said.

The federal council has also asked the finance ministry to draw up plans to control payouts to Credit Suisse staff for all future bonus rewards.

“We thought it couldn’t get any worse and it just did,” said one Credit Suisse banker. “Essentially, this seems like the government is helping UBS unwind the investment bank but cutting everybody’s pay.”

Another banker said: “I was expecting it. We are not entirely clear what will happen next but morale is so down it’s hard to even describe.”

Bonuses awarded for 2022 may be paid according to the bank’s existing plans, the federal council said, for the sake of “legal certainty” and to “avoid impacting employees who did not themselves cause the crisis”.

Credit Suisse has until now sought to reassure staff that all bonuses and financial rewards would be paid as planned.

According to the company’s annual report, released last week, at the end of 2021, Credit Suisse bankers were owed SFr2.793bn ($3bn) in deferred compensation, based on the bank’s then share price. At the end of 2022, SFr1.25bn in deferred compensation awards was owed.