ZURICH (Reuters) - Credit Suisse CSGN.VX investors backed a plan to issue new shares to pay staff bonuses after more than two hours of criticism from individual shareholders angered by high pay for executives at the bank.
Just over 75 percent of votes were cast in favor of the plan at an investor meeting on Friday, despite a recommendation to reject it from shareholder advisory group ISS.
Banker pay and bonuses have become hot-topics across Europe since the financial crisis, when a string of major banks including Switzerland’s UBS UBSN.VX and Britain’s Royal Bank of Scotland (RBS.L) had to be bailed out by taxpayers.
Julius Baer BAER.VX shareholders last week rejected the pay plans of the Swiss private bank after ISS, which advises investors on corporate governance and other issues, had recommended shareholders vote it down.
On Thursday, British bank Barclays (BARC.L) promised its shareholders a rigorous review of executive pay, as investors they were not convinced big bonuses would be abandoned by its new bosses as part of a new ethical drive.
Generally, though, most institutional shareholders continue to vote through remuneration plans, arguing that banks must pay to attract the best talent.
Prior to the Credit Suisse vote, more than 1,700 largely retail shareholders pressed Chairman Urs Rohner, Chief Executive Brady Dougan and other top executives on pay.
“Would you leave Credit Suisse if you only earned 700,000 Swiss francs a year, or would the quality of your work suffer?” shareholder and politician David Roth asked Dougan.
Dougan, who didn’t respond to Roth publicly, received 7.8 million Swiss francs ($8.2 million) for 2012. <ID:L6N0CE0M9>
Most shareholders criticizing pay referred to a Swiss vote last month that will impose some of the strictest controls on executive pay and force companies to hold a binding shareholder vote on compensation.
“Credit Suisse’s top management still doesn’t want to believe it, even after the Minder initiative passed,” retail shareholder Beda Dueggelin said, referring to the new rule.
“Next year, they will feel it when a non-binding vote is no longer enough.”
Credit Suisse’s general pay plan was approved by almost 88 percent of voting shareholders.
For some, the new pay curbs don’t go far enough. The center-left Social Democrats, which Roth represents, are already pushing for another referendum on even tougher restrictions on executive pay - they want to limit the annual compensation of top managers to 12 times that of their lowest-paid worker.
Roughly a dozen Young Social Democrat activists campaigned for the 1:12 initiative at the shareholder meeting by knocking down a pyramid of barrels with an oversized ball, the top barrel emblazoned with Dougan’s picture.
Swiss activist investor groups Ethos and Actares had asked shareholders to vote down Credit Suisse’s pay plan, while ISS backed it. Instead, ISS asked shareholders to vote down the plan to issue new shares to pay bonuses to staff, some of whom have volunteered to receive bonuses in stock rather than cash as part of measures to bolster capital.
($1 = 0.9474 Swiss francs)
Editing by Emma Farge and Mark Potter