* ISS, Glass Lewis oppose parts of proposed compensation
* Swiss firms' shareholders get binding vote on bosses' pay
* Vote to take place at AGM on April 28
(Adds ISS recommendation)
By Joshua Franklin
ZURICH, April 18 Credit Suisse has
failed to completely quash a shareholder revolt over payouts to
the bank's senior managers, even after offering to cut bonuses
for top management by 40 percent and a pay freeze for its board
The Swiss bank made the concessions last week to head off
shareholder criticism of its pay plans, which included bonuses
of 78 million Swiss francs ($78 million) to top executives and
higher pay for the board despite a 2.7 billion-franc net loss
Proxy advisor Institutional Shareholder Services
(ISS)softened its stance by asking shareholders of the bank to
vote in favour of the board of directors' pay and the long-term
variable pay for the executive committee.
ISS said it was still against the proposed short-term
variable pay for the executive committee and the overall pay
Shareholder advisory service Glass Lewis said the
concessions were "too little too late". It urged shareholders to
reject the maximum amount of compensation for the board of
directors, but advised them to support the proposed bonuses for
Credit Suisse's executive board.
Shareholders in Switzerland have veto power over management
and board pay following a 2013 "fat cat" referendum on the
issue. If Credit Suisse shareholders reject the plan, it would
be the first use of the Swiss veto at a leading company.
Shareholders will vote at the bank's annual general meeting on
Investors have become much more vocal in opposing big
increases in executive pay and bonuses when a company has not
American International Group Inc's CEO Peter Hancock
will not get a cash bonus for last year after the company's poor
performance roiled shareholders. BP cut CEO
Bob Dudley's 2016 pay package by 40 percent after shareholders
opposed the oil company's pay plans.
Credit Suisse has now published those amendments to its
Annual General Meeting agenda.
If shareholders vote against the compensation, Credit
Suisse's board of directors may submit a new proposal to an
extraordinary general meeting or to the next AGM, according to
Credit Suisse's articles of association.
ISS and Glass Lewis represent 15-20 percent and 10 percent
of Credit Suisse shareholders respectively, according to an
estimate from Swiss shareholders' advisory firm Ethos.
Despite Credit Suisse's concessions, Ethos still opposes the
pay proposals, saying they remain too generous in light of the
bank's 2016 losses.
Some investors are throwing their weight behind the pay
plan, including Norway's sovereign wealth fund. The fund, which
owns about 5 percent of Credit Suisse, said the bonus cut
demonstrated "the board has listened to shareholder concerns".
Overall, CEO Tidjane Thiam's compensation will drop by 4.67
million francs through the bonus cut, although his 2016
compensation will fall only to 10.24 million francs from 11.9
million because the bulk of the reduction comes from 2017
The pay packet still makes Thiam one of Europe's
highest-paid bank bosses.
Credit Suisse's board will get compensation of 12 million
francs, from 12.5 million previously, under the proposals.
Since taking over as CEO in mid-2015, Thiam has shifted the
bank's focus towards wealth management while shrinking Credit
Suisse's investment bank.
The costly restructuring and heavy penalties for selling
toxic mortgage debt in the run-up to the financial crisis meant
a second straight full-year loss for Credit Suisse.
($1 = 1.0033 Swiss francs)
(Additional reporting by Oliver Hirt and John Miller; Editing
by Michael Shields and Jane Merriman)