The Swiss pension fund-backed proxy voting group Ethos has welcomed executive pay and other decisions announced by Credit Suisse today in light of the Greensill Capital and Archegos crises.
The bank’s board of directors withdrew the proposal on the agenda of the AGM, which will be held on 30 April, to formally discharge the members of the board of directors and the executive management for the fiscal period of 2020.
Vincent Kaufmann, CEO of Ethos, said that in view of the significant losses the bank is exposed to in connection with the Greensill and Archegos crises, “it is normal that the board of directors asks not to be discharged”.
He added: “Shareholders will retain all their rights while being able to better assess the full extent of the losses suffered, the reasons which led to these losses and the responsibility of the board of directors.”
Credit Suisse expects to report a pre-tax loss for the first quarter of this year of CHF900m (€814m), including a charge of CHF4.4bn in respect of hedge fund Archegos’ inability to meet margin commitments. Credit Suisse was one of several banks that acted as prime broker to Archegos.
The bank is also cutting its proposed dividend and has withdrawn AGM proposals on executive pay, saying the executive board would not be paid variable remuneration for 2020.
Ethos, which had already recommended shareholders vote against the variable pay proposals, welcomed the decision. It had also recommended shareholders not discharge the directors from liabilities.
Credit Suisse has launched two investigations, to be carried out by external parties, in connection with the Greensill and Archegos Capital crises. Ethos said it demanded that these also scrutinise the accountability of the board of directors and that the results be made public.
Senior management overhaul
Credit Suisse today also revealed a reshuffle of senior management positions, removing Brian Chin, CEO of the investment bank division, and chief risk and compliance officer Lara Warner.
Christian Meissner will take over the position of CEO of the investment bank division and member of the executive board, effective on 1 May. Joachim Oechslin is the new chief risk officer and member of the executive board, effective today. The bank has also named Thomas Grotzer interim global head of compliance, also effective today.
Thomas Gottstein, CEO of Credit Suisse Group, said: “The significant loss in our prime services business relating to the failure of a US-based hedge fund is unacceptable. In combination with the recent issues around the supply chain finance funds, I recognise that these cases have caused significant concern amongst all our stakeholders.
“Together with the board of directors, we are fully committed to addressing these situations. Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history.”