Financial news

Credit Suisse cuts ex-chief Tidjane Thiam’s bonus after spying scandal

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Via Financial Times

Credit Suisse has slashed the bonus of its former chief executive Tidjane Thiam for his role in a corporate spying scandal that damaged the Swiss lender’s reputation.

Mr Thiam’s so-called “short-term incentive” bonus for 2019 was cut by a third to SFr3.3m ($3.4m) from SFr4.9m, according to the bank’s annual report on Wednesday. Overall, he was awarded SFr10.2m last year, down 17 per cent from SFr12.3m in 2018, and lost all of his 2020 long-term incentive awards.

Kai Nargolwala, chair of the board’s compensation committee, said in the report that Mr Thiam “led by example in terms of personal commitment to the group’s conduct and ethics standards” but his “non-financial assessment score has been reduced” because “the observation matter had a significant impact”.

Still, after being awarded “good leaver” status when he left last month, Mr Thiam was allowed to keep his 1.4m shares valued at about SFr19m at the end of 2019. This year Credit Suisse’s stock has since fallen 41 per cent, leaving them worth substantially less.

Mr Thiam was ousted after he lost a bruising boardroom battle with the bank’s chairman Urs Rohner. His departure followed months of damaging revelations linked to two cases of intrusive surveillance conducted against departing senior employees, including wealth management boss, Iqbal Khan, who left for rival UBS.

Credit Suisse reiterated that it had found no evidence Mr Thiam was directly involved in ordering the observation. Swiss regulator Finma is investigating the affair and is interviewing the people involved, and reviewing their phone records and emails, according to people familiar with the matter.

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Next month, the 57-year-old French-Ivorian is set to join the board of French luxury group Kering, which is owned by the billionaire Pinault family and includes brands such as Gucci, Yves Saint Laurent and Alexander McQueen.

Pierre-Olivier Bouée, Mr Thiam’s longstanding lieutenant and Credit Suisse’s ex-chief operating officer, lost all of his SFr2m salary and deferred compensation after he was fired for admitting he personally ordered the spying.

Mr Thiam is credited with repositioning Credit Suisse away from volatile trading and expanding its wealth management division. On his final day in charge last month he reported that the bank’s pre-tax profit jumped 40 per cent in 2019 to SFr4.7bn, the highest level since 2010.

The executive board collectively earned around SFr77m last year, a decline of 17 per cent in 2018, the report said. Overall, the bank group bonus pool was cut 1 per cent to SFr3.2bn, confirming a Financial Times report from the start of February.

Credit Suisse’s new chief executive Thomas Gottstein will be paid a base salary of SFr2.7m — SFr300,000 less than his predecessor — and his bonus multipliers are lower, meaning he will initially earn around 15 per cent less. 

The board decided this because Mr Gottstein is a novice chief executive yet to prove he can run a global company, unlike Mr Thiam, who joined after a largely successful period at insurer Prudential, according to a person familiar with the decision.

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