Switzerland has instructed Credit Suisse (CSGN.S) to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether already those already paid out can be recovered, the Federal Council said on Wednesday.
Under Swiss banking law, the Federal Council can impose bonus-related measures on a systemically important bank if it received state aid from federal funds, according to a statement.
It is highly unusual for a government to impose a halt to bonus payouts, but there has been public backlash against bonus payments at the bank whose rescue was backed by roughly 260 billion Swiss francs ($280 billion) of state funding and guarantees.
The decision will affect around 1,000 employees, who will be deprived of approximately 50-60 million Swiss francs with the measures, the council said.
Bonus payments up to the end of 2022 will be cancelled for the Executive Board, and then halved for management one level below the board and reduced by 25% for those two levels below.
Credit Suisse must also report to authorities on whether it is possible to recover paid-out bonuses, added the statement.
For 2023, all bonus payments accruing until completion of the takeover by UBS (UBSG.S) will be cancelled or reduced for the top three levels of management, said the statement.