OSLO • While shareholder groups largely stuck to criticism of Credit Suisse Group's pay plans even after the bank backtracked, its revised proposals won over at least one of its biggest investors.
Norges Bank, Norway's sovereign wealth fund, met Credit Suisse board members a number of times to determine how it would vote at this month's shareholder meeting. Executive remuneration was a focus of the agenda, it said in a statement on Tuesday.
With the meeting just two weeks away, Credit Suisse on Friday sought to quell an outcry by proposing to lower bonuses for top executives and to freeze pay for the board of directors. At least four advisory groups had complained that the compensation was excessive, given the bank's 2.7 billion franc (S$3.8 billion) loss last year.
Norges Bank "welcomes the announcement made by the board on April 13 regarding a revision of executive remuneration," it said in the statement. "It is on this basis that we are now able to vote in favour of the remuneration-related resolutions at the annual general meeting."
Three advisory groups that rejected the bank's first pay proposals for short-term bonuses - Institutional Shareholder Services (ISS) and Switzerland's Ethos and zRating - stuck to their recommendations despite the proposed reductions. Only Glass Lewis & Co said the short-term bonus cuts merit shareholder support - it remains opposed to the board pay even at the previous year's level.
ISS tempered its recommendations late Tuesday. The shareholder adviser originally said it would oppose the adjusted remuneration proposals for the board as well as long-term and short-term incentive awards for Credit Suisse's management because the bank did not change its agenda for the meeting when announcing reductions. Credit Suisse published an adjusted agenda early Tuesday.
ISS now supports the board's pay and the long-term bonuses for management.
Credit Suisse's stock fell 33 per cent last year, with market turmoil, surprise trading losses and legal cases sapping confidence in a costly turnaround plan. Charges tied to a settlement over its crisis-era mortgage securities business pushed the bank into a second annual loss.
Executives are offering to forgo 40 per cent of their bonuses, leaving the 13-member board with about 48 million francs - 17 million francs split between cash and shares for achieving short-term targets, and 31 million in shares for performances tied to long-term goals.
The board of directors has renounced plans to raise its maximum compensation by 500,000 francs to 12.5 million francs.