Brocker.Org: Credit Suisse investors prepare to grill chairman Rohner over pay


Credit Suisse Chairman Urs Rohner faces his toughest shareholder meeting to date this week following an investor revolt over bonuses and losses totalling 5.65 billion Swiss francs ($5.7
billion) since 2015.

Rohner, 57, is facing calls to stand down after six years as chairman, during which time the share price of Switzerland’s second-biggest bank has more than halved to around 15 francs.

“Trust in the bank actually is at rock bottom if we look at the share price since Urs Rohner took office in 2011,” said Vincent Kaufmann, whose Swiss shareholder advisory group Ethos opposes Rohner’s re-election at Friday’s annual general meeting.

Ethos members represent an estimated 3-4 percent of shares in Credit Suisse, where the controversy over bonuses for top managers comes after raids at three of its offices in a Dutch-led tax investigation and uncertainty over plans to sell part of its domestic banking business.

Its decision to pay 78 million francs in bonuses to top executives and raise board compensation, amid a costly restructuring under Chief Executive Tidjane Thiam and billions of dollars in U.S. legal penalties, sparked an investor revolt.

Switzerland’s economy minister said the pay packets were a sign of recklessness and senior managers eventually offered to cut their bonuses by 40 percent, with the board also freezing its pay.

The investor discontent took Rohner by surprise.

“It was more than I expected, and particularly among UK and professional or institutional investors and proxy advisers,” he told the Financial Times in an interview published on Sunday.

Despite the criticism, which has rumbled on even after the concessions, a source familiar with Rohner’s thinking said he is confident of winning all agenda item votes at the AGM, including a binding vote on bonuses and board pay, and his re-election.

Rohner’s supporters say he offers stability as Thiam shifts Credit Suisse’s focus towards wealth management, while cutting back the investment bank, with the loss of thousands of jobs.

“There’s been a lot of chopping and changing,” said Macquarie Research analyst Piers Brown, who rates Credit Suisse’s stock “underperform”. “I think at the minute probably stability is better than having another u-turn.”

Investors will get an update on the restructure when Credit Suisse reports first-quarter results on Wednesday.