Credit Suisse Boss Bags $14 Million Despite Share Slump
Credit Suisse boss Brady Dougan took $14 million in pay in 2010, despite the bank's shares losing a quarter of their value, while rival UBS CEO Oswald Gruebel waived his bonus after a much smaller share price fall.
Dougan's fixed pay doubled to 2.5 million Swiss francs ($2.8 million) and was topped by a 10.2-million-franc bonus, making him one of the world's highest-paid bankers for the second year.
Dougan's total pay of 12.8 million francs was down a third from 2009, when he also received shares worth some 71 million francs under a five-year bonus plan.
His base pay is lower than Gruebel's, but the UBS chief took no bonus for the second consecutive year in 2010, citing a fall in his bank's share price.
UBS shares lost 4.3 percent in 2010, while Credit Suisse shares fell by 26.43 percent.
According to the figures released in the bank's annual report, Dougan was not Credit Suisse's highest paid executive this year — that position went to Brazilian-born Antonio Quintella, CEO of Credit Suisse Americas, with 15.6 million francs.
U.S. bankers' pay has swollen again this year: JPMorgan CEO Jamie Dimon is in line for stock and options worth $17 million for 2010, and Goldman Sachs chief Lloyd Blankfein was awarded $12.6 million in stock. But in Europe fiercer criticism of hefty payouts has prompted some reworking of bonus schemes, if not the actual sums of money involved, as politicians and the public voice anger at big rewards so soon after taxpayers bailed out the industry.
Total compensation for the Credit Suisse executive board was down by a third, but its 16 members still took home an average of 10 million francs each.
As at rival UBS, the bulk of the bonus payments can only be claimed over time, and portions can be "clawed back" if the bank performs badly.
Swiss compensation rules introduced in 2010 require the country's largest banks and insurers to defer the bulk of executive bonuses, although they do not impose bonus caps.
Credit Suisse bucked a trend shown by rival banks where investment banking heads rather than company bosses have topped the pay scale.
Pay last year for investment banking stars at UBS, Deutsche Bank , HSBC and Barclays eclipsed the bonuses of their bosses as pay rebounded in 2010, sparking another wave of criticism that pay has recovered near to pre-crisis levels.
Credit Suisse said it was not disclosing investment banking CEO Eric Varvel's total pay this year, as it only discloses the compensation of the group CEO, the highest paid employee and the executive board.
At 1108 GMT, shares in Credit Suisse were up 0.7 percent, tracking a firmer European Banks Index .
As well as reining in compensation, Credit Suisse and UBS have both cut back on capital-sapping activities like proprietary trading more than most rivals due to an anticipated toughening of Swiss rules relating to the amount of capital they need to hold.
While client money continued to flow into the wealth management business, weak client trading curbed profits. Credit Suisse also cut its 2010 dividend to 1.30 francs from 2.00 francs a year earlier. UBS currently pays no dividend.
Credit Suisse also confirmed its return on equity (RoE) target of "above 15 percent" stated when the company released annual results, lower than its previous target of "above 18 percent". It had a RoE of 14.4 percent in 2010.