Swiss minister criticises excessive pay

The economics minister, pictured at a hockey game, had strong words for Credit Suisse bonuses Keystone

Swiss Economic Minister Johann Schneider-Ammann told a Swiss newspaper that so-called fat-cat salaries for top bankers are stupid and divisive.

The minister, part of the nation’s governing seven-member cabinet, was commenting about payouts to senior managers of Switzerland’s second-largest bank, Credit Suisse, in an interview with Sunday newspaper Zentralschweiz am Sonntag.

He told the newspaper, in unusually barbed remarks, that the bonuses are a “stupidity” that have “nothing to do with the world market conditions”, and represent “a recklessness” that will sooner or later lead to backlash by dividing social classes.

Shareholder backlash

Credit Suisse has been facing a shareholder revolt over the payouts despite since offering to cut bonuses for top management by 40 percent and freeze the pay of its board of directors.

Despite a net loss of CHF2.7 billion ($2.7 billion) last year, the Zurich-based bank’s pay plans include bonuses of CHF78 million to top executives and higher pay for its board of directors. Shareholders in Switzerland can veto the pay plans, however, under powers gained from a 2013 “fat-cat pay” referendum. Doing so would represent the first such use of the referendum at a major company.

Credit Suisse shareholders are scheduled to hold a consultative vote on the bank’s compensation report at their annual general meeting next Friday. They will also have a binding vote on the pay for top executives and directors.