The departing Chief Executive Officer (CEO) of Credit Suisse Group AG CS, Brady W. Dougan received less than 1% pay cut in 2014. As per the company’s annual report, Dougan received an approval for compensation worth CHF 9.70 million for 2014, reflecting a slight decrease from CHF 9.79 million in 2013.
The decline in the CEO’s compensation has perhaps resulted from the weak performance last year, as the company struggled with legal issues.
Net income for 2014 stood at CHF 1.92 billion, down from CHF 2.37 billion. Core pre-tax income for 2014 declined 7.8% year over year to CHF 3.23 billion. Further, total operating expenses increased nearly 4% year over year.
Notably, Credit Suisse’s 2014 results witnessed revision to account for mortgage-related litigation provisions. Last May, the company pleaded guilty to criminal charges of assisting its U.S. clients to evade taxes. The company shelled out $2.8 billion as settlement charges to the U.S. authorities.
Notably, owing to the May settlement, the board and executive board of Credit Suisse agreed to voluntarily reduce the compensation amount that would have been awarded for 2014. The total compensation for the board declined by around 25% and the variable compensation for the executive board declined by equivalent 20% of amount that would have granted last year.
Credit Suisse mentioned in its latest report that under Dougan’s leadership the company witnessed several achievements in its performance last year including gradual improvement in winding down its non-strategic positions in 2014 and a 35% decline in risk-weighted assets.
Also the report stated, “As a particular achievement in 2014, the Compensation Committee acknowledged Mr. Dougan’s strong leadership in managing the US cross-border settlement and its consequences.”
However, non-strategic operating results were below the company’s target.
Notably, earlier this month, Credit Suisse announced the departure of Dougan. The long eight-year tenure of Dougan will end in Jun 2015. U.K.-based insurer Prudential PLC’s PUK existing CEO – Tidjane Thiam will replace Mr. Dougan as the chief executive of Credit Suisse. (Read more: Prudential CEO to Take Over as Chief at Credit Suisse)
Among other banking giants, Bank of America Corp.’s BAC Chairman as well as CEO Brian Moynihan is expected to receive $13 million as total compensation for 2014, which reflects a decline of over 7% from the pay awarded to him in 2013. This move did not come as a surprise, given the company’s struggling profitability throughout the year.
However, Sergio P. Ermotti, CEO of UBS Group AG UBS has been awarded a 4% year-over-year increase in his compensation to CHF11.16 million for 2014. Though in 2014, the bank’s financials were dented with legal and regulatory charges, the company stated that under Ermotti’s leadership, the company recorded a strong performance last year.
Credit Suisse currently carries a Zacks Rank #5 (Strong Sell).
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