Swiss investors demand that board engages with investors on executive remuneration.

Shareholders have shown Credit Suisse a significant sign of discontent over its controversial executive pay packages, after a third failed to back the bank’s remuneration report at today’s AGM in Zurich. 
The vote on the remuneration report came out at 66% for, 29% opposed, and 5% abstention; a high vote against. Under a controversial five-year bonus plan, the 2009 remuneration package of Brady Dougan, the Credit Suisse chief executive, will reach almost €50m. A further 400 senior bankers will share in excess of €2.1bn. Ethos, the Swiss sustainability investor group comprised mostly of Swiss pension funds voted against the report. It was reportedly joined by influential US proxy investment advisors, RiskMetrics, and Glass Lewis. Earlier this month, Ethos led investors at UBS in a successful vote against the signing off on responsibility for the Swiss bank’s accounts for 2007, 2008 and 2009. The

resolution was voted down by 52.75% of shareholders at UBS’ AGM in Basel on April 14th. Following today’s Credit Suisse AGM, Ethos said it was asking the bank’s board of directors to consult with all shareholders on the pay issue. Dominique Biedermann, executive director of the Ethos Foundation, said: “Today’s vote is a very clear signal to the board of Credit Suisse Group. The remuneration policy should be amended so that paying excessive remuneration is no longer possible.” Ethos claims that the Credit Suisse remuneration system includes elements that can lead to egregious payments to executives, with a variable part exceeding ninety percent in 2009. It also questioned what it called the “risky” use of return on equity as one of the two main performance criteria, claiming this could lead executives to pursue a reduction of the bank’s equity against the interests of long-term shareowners.