FDF orders measures on remuneration at CS and UBS

Bern, 23.05.2023 - The Federal Department of Finance (FDF) has issued an order cancelling or reducing the outstanding variable remuneration of the top levels of management at Credit Suisse. At the same time, the FDF has instructed UBS to design its remuneration system for the employees responsible for the realisation of the Credit Suisse assets covered by the federal guarantee such that the system provides an incentive to achieve the fewest losses possible on the realisation of those assets.

With these two orders, the FDF is implementing the Federal Council decree of 5 April 2023 on measures relating to remuneration at CS and UBS (see press release of 5 April). The right to a hearing has been granted in the meantime.

The currently outstanding variable remuneration for the top three level of management at Credit Suisse will either be cancelled (Executive Board) or reduced by 50% (members of management one level below the Executive Board) or by 25% (members of management two levels below the Executive Board). This takes account of the most senior managers' responsibility for the situation at Credit Suisse in a differentiated manner. Moreover, variable remuneration for these management levels due in 2023 will be cancelled or reduced on a pro rata basis until the takeover is completed. In addition, Credit Suisse must examine the possibilities for recovering remuneration already paid out to members of group management since 2019, and to report to the FDF and FINMA on the matter.

The employees are not party to the order procedure, as the order is directed exclusively at CS. The order replaces the interim injunction of 21 March 2023 and subsequent FDF measures concerning remuneration at CS.

Another order obliges UBS to make provision for an additional criterion in its remuneration system for those who are mainly responsible for the realisation of the Credit Suisse assets covered by the federal guarantee. This is intended to provide an incentive to achieve the lowest possible losses on the realisation of these assets, in order to avoid, wherever possible, the utilisation of the federal guarantee. UBS is also obliged to take appropriate account of other factors in its remuneration system, such as risk awareness and compliance with rules of conduct. A corresponding requirement ensures that UBS's remuneration system is not changed in a way that rewards excessive risk-taking.

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