Credit Suisse boss Tidjane Thiam threatened to walk if the bank's lavish and massively controversial pay plan didn't pass muster with shareholders, according to a report on Tuesday. The embattled bank terms the report «pulled out of thin air».
Zurich-based Credit Suisse is heading for a showdown on Friday with shareholders, who have mounted broad opposition against its pay and bonus policies even after the bank pruned its initial pay plan nearly two weeks ago.
On Tuesday, the «Financial Times» wrote that Chief Executive Tidjane Thiam, who volunteered to lower his pay to 10.24 million Swiss francs from an initially awarded 11.9 million francs, threatened to step down if shareholders refused to green-light the overall pay plan in a consultative vote.
The «FT» didn't elaborate on to whom or when Thiam expressed the intention, or the response it elicited. A spokesman for Credit Suisse said the newspaper's report that Thiam theatened to resign is «pulled out of thin air».
Credit Suisse's board under chairman Urs Rohner is in a bind, the «FT» writes: it brought in Thiam nearly two years ago to overhaul the bank with the promise of a rich payday.
Stunning Gamble
Now, Thiam and his 11-member top management team including Pierre-Olivier Bouee, a compatriate from his tenure at British insurer Prudential, have been forced to relinquish part of their pay in order to ensure a «yes»-vote from shareholders on Friday. It is the second consecutive year that Thiam has offered a bonus cut.
If the «FT» is accurate, it represents a stunning political gamble for Thiam, who is aware that his success in turning around Credit Suisse is directly linked to the fate of oft-criticized Rohner (pictured below).
The two most powerful proxy advisors, Institutional Shareholder Services, or ISS for short, and Glass Lewis, have maintained their opposition to the overall pay plan. This is put to shareholders in a non-binding vote.
ISS has softened its stance on individual top management pay items including long-term and fixed pay. ISS still opposes 17 million francs in short-term bonuses that Credit Suisse had planned to award to top management, as do Glass Lewis and Ethos Fund, a Swiss-based shareholder group.
