UBS and Credit Suisse: Ethos recommends opposing the remuneration reports


Ethos, our ECGS partner, recommends to oppose the remuneration reports at the annual general meetings of Credit Suisse (26 April) and UBS (2 May). Despite some progress made by the two banks with regard to the executive remuneration structure, the amounts paid are still too high.

see: UBS and Credit Suisse: Ethos recommends opposing the remuneration reports:


Credit Suisse and UBS have implemented several amendments. Ethos notes that Credit Suisse has introduced caps on the variable remuneration in percentage of the base salary. This has been requested with insistence by Ethos for many years. Credit Suisse is now one of the first banks to introduce such a cap which Ethos commends, as it is now possible to calculate the maximum potential remuneration of the executive management. For 2013, the maximum variable remuneration of Brady Dougan, the CEO, will be capped at 6 times his base salary (CHF 2.5 Million in 2012), which Ethos still considers as excessive.

UBS has not gone as far as Credit Suisse, however the bank has introduced a cap on the aggregate amount of the variable remuneration of the members of executive management. This cap is set at 2.5% of the income before tax and value adjustments. Nevertheless, the CEO's 2012 remuneration was approximately CHF 9 million, while the bank posted an accounting loss of CHF 2.5 billion in 2012.

Ethos also notes that in both banks, the chairman's remuneration is excessive, as they receive approximately CHF 5 million (annualized). In light of all these concerns, Ethos recommends that shareholders oppose the remuneration systems of both Credit Suisse and UBS.


see: Ethos opposes the conditional capital increase for the employees :


Credit Suisse grants shares to its staff corresponding to approx. 4% of its capital per year. Such an amount is quite high and largely exceeds the limits generally accepted by investors. To service employee incentive plans, Credit Suisse wants to issue new shares rather than use repurchased shares. This allows settling remuneration, while at the same time reinforcing the bank's capital base. In light of the dilution which shareholders incurred during the past and the excessive grant of shares, Ethos recommends opposing the conditional capital increase request.


see: Ethos refuses the discharge and the re-election of the external auditor



In 2012, the scandal related to the LIBOR manipulation led UBS to pay a record fine of CHF 1.4 billion. Ethos acknowledges that certain members of the board of directors were not in place at the time of these events. However, as UBS does not propose to discharge board and executive management members individually, Ethos recommends opposing the discharge of the board and the executive management.


Ethos also recommends opposing the re-appointment of Ernst & Young, the company's external auditor since 1997. Ethos has serious concerns regarding the quality of the audit in the recent past. In particular, the external auditor did not identify any of the recent scandals involving the bank (subprime loans, fiscal fraud, unauthorized trading in London, LIBOR manipulation). Furthermore, the auditor received CHF 122 million in 2012.

Paris, 22nd,  April, 2013