Credit Suisse chairman takes $1.6mn pay cut; bank admits to ‘weakness’ in reporting procedures

Credit Suisse Group AG Chairman Axel Lehmann has decided to take a pay cut of 1.5 million Swiss francs ($1.6 million) after the bank failed to meet its financial and non-financial targets—deemed to be one of its worst annual performances since the 2008 financial crisis.

According to the bank’s compensation report published on Tuesday, Lehmann will not receive the standard fee that’s usually received by the top board members.

Rather, the bank is planning to increase the portion of Lehmann’s compensation that is paid in shares to 50 per cent from 33 per cent.

Lehmann, who joined in January 2022, was to receive compensation of 3 million francs for the period from April 2022 to April 2023. Now, he plans to propose to take lower total pay of 3.8 million francs for the following pay period at the annual shareholder meeting, Bloomberg reported.

The pay revision of Lehmann largely falls in line with executive-board members who are not receiving a bonus for last year when the bank suffered record outflows of client funds and a slump in its share price amid concerns over its restructuring plans.

Credit Suisse, which is facing a flood of departures, is looking to motivate senior staff while not angering shareholders and regulators.

The bank said that it will make another substantial loss this year and is in the middle of a complicated restructuring that includes carving out its investment bank and selling off businesses that don’t connect with its key wealth unit. It is also planning to cut 9,000 jobs to reduce costs.

‘Material Weakness’ in reporting procedures

Meanwhile, Credit Suisse Group AG has identified “material weaknesses” in its reporting procedures for the financial years 2022 and 2021 and is looking to adopt a remediation plan. 

For two years, “the group’s internal control over financial reporting was not effective,” Credit Suisse said in its annual report released on Tuesday. “Management has also accordingly concluded that our disclosure controls and procedures were not effective.”

The bank was forced to delay the release of its annual report from last week after US regulators raised last-minute queries. Credit Suisse didn’t specify whether those had been resolved. 

(With inputs from agencies)