The CEO of the Ethos Foundation will be speaking this Tuesday morning at the last general meeting of Credit Suisse. In particular, he will call for full disclosure of the responsibility of the bank's current and former executives.
For many years, the Ethos Foundation has been concerned by the abuses and misconduct observed within the highest management bodies of Credit Suisse. These include remunera-tions - which reached unimaginable heights during the Brady Dougan era - but also the numerous financial and legal cases that have tarnished the bank's reputation - and conse-quently its share price - over the past 10 years and that have ultimately led to the current debacle.
In the voting recommendations it provides to its clients, Ethos has opposed all votes on remuneration since 2009. It has consistently advocated for an overhaul of the remuneration system with the main objective of reducing the incentives for risk-taking for top management and the most exposed employees ("key risk takers"). Ethos now expects the legislator to learn from the consequences of excessive variable remuneration systems and to im-pose limitations in the banking sector as is the case in the European Union (CRD V).
Ethos has also recommended to systematically oppose the discharge of the board of direc-tors and the executive management since 2014 and even requested last year a special audit of the bank in connection with the Greensill and SwissLeaks cases.
Since 2015, Ethos has also supported the idea of separating the Swiss bank from the rest of the group, an idea that came from the management but was finally abandoned by the board of directors. Finally, Ethos has been concerned since 2011 about the low level of equity capital declared by the bank. It has thus opposed the share buyback programmes and the payment of a dividend on four occasions (2016, 2017, 2021 and 2022).
See retrospective of Ethos interventions at Credit Suisse
The Ethos Foundation did not lead this opposition willingly, but to prevent a flagship of the Swiss economy from disappearing due to the greed and incompetence of its managers. Unfortunately, Ethos - together with its members and clients - often received a low level of support at general meetings. The request for a special audit, for example, received only 10% of the votes last year.
Today, the situation is clear: Credit Suisse is probably experiencing its last general meeting, shareholders have lost considerable amounts of money and thousands of jobs are on the line. For the Ethos Foundation, it is now time to learn from this debacle and avoid repeating the same mistakes in the future. Its CEO Vincent Kaufmann will speak this Tuesday morning in Zurich to ask the board of directors, and in particular its current chairman Mr. Axel Lehmann, to shed light on the responsibility of the bank's current and former managers.
A series of written questions have also been addressed to the board of directors and Ethos now expects detailed answers from the bank in the minutes of this general meeting:
- On what financial basis and at what balance sheet date did the board of directors accept the takeover offer valuing the bank at CHF 3.25 billion?
- How did the board of directors ensure that the damage we as shareholders suffered was not caused by the current and former directors through intentional or negligent breach of duty, especially in the years in which discharge was never granted (2020 and 2022)?
- According to Article 756 of the Swiss Code of Obligations, the company and each shareholder have the right to sue Credit Suisse for damages. Has the board of directors initiated legal action against any of the executives or does it intend to do so?
- What has the board of directors done to ensure that none of the compensation paid to former executives, in particular the variable compensation, is undue within the meaning of Article 678 of the Swiss Code of Obligations?
- Was a demerger of the Swiss bank with an IPO as foreseen by the "too big to fail" regulation considered by the board of directors during the strategic review announced last October? If so, why was this plan not retained?
- What is the exact amount of variable remuneration that will not be paid following the decision of the Federal department of finance communicated on 21 March 2023? Does this only concern the remuneration of the general management or also that of the key risk takers, or even of all employees?
- More specifically, what will happen to the CHF 367 million retention awards and the CHF 497 million paid in 2022 under the Strategic Delivery Plan?
- Do Credit Suisse's existing compensation plans include change of control clauses? If so, will they apply in the case of the merger with UBS?
- What portion of the USD 175 million transaction with Mr. Klein announced on 2 February is due to him as a result of the UBS takeover announcement? Was the CHF 10 million "advisory fee" planned for Mr. Klein before the actual takeover actually paid to him?