Credit Suisse Complies with G-20 Pay Standards

Global financial services firm Credit Suisse announced a shift to the ratio of base salary and bonus salary for its employees, to attain compliance with pay guidelines proposed by the Group of 20 and accepted by a number of UK business units of the world’s top banks.

The change applies to managers and directors and will result in a change in the proportion of non-deferred compensation paid as fixed base salary, Credit Suisse said. The changes take effect January 1, 2010 and will apply for bonus pay awarded for 2009.

“At a time of strong focus on executive compensation, we are announcing a compensation structure that enables us to strike the right balance between paying our employees competitively, doing what is right for our shareholders and responding appropriately to regulatory initiatives and political as well as public concerns,” said Brady Dougan, Credit Suisse Group CEO.

In addition, the financial services firm created two programs for deferred variable compensation awarded to managing directors and directors. The Scaled Incentive Share Units (SISU) and Adjustable Performance Plan Awards (APPA) programs will be used to evenly fund these employees bonus pay.

SISU are similar to the Incentive Share Units (ISU), the share-based bonus program Credit Suisse had in place for the past three years. The new SISU will deliver a base share amount on a four-year pro-rata basis and the award of additional shares will depend on the average share price as well as return on equity over four years, the company said.

APPA is a cash bonus with a notional value that adjusts upward annually based on Credit Suisse’s return on equity over three years. A mechanism will adjust the outstanding awards downward, should the business area of the employee losses equity.

In addition, Credit Suisse will set share ownership requirements for members of divisional and regional management committees and for the executive board.

Write to Austin Kilgore.