Credit Suisse Suspends $1.5 Billion Share Buyback Plan on Virus

(Bloomberg) --

Credit Suisse Group AG froze its plan to buy back as much as 1.5 billion francs ($1.53 billion) of shares this year due to economic uncertainty caused by the coronavirus.

The bank purchased 325 million francs worth of shares through March 13 as part of a plan to spend at least 1 billion francs on stock this year, Chairman Urs Rohner said in a letter on Wednesday. The board of directors will review the bank’s goals for further purchases “when there is greater certainty over the market, financial and economic outlook,” he said.

Shareholder and executive compensation has come under scrutiny as governments plan to spend an unprecedented amount of public money to help companies weather the economic disruption caused by the virus. Europe’s top banking lobby is trying to find common ground among lenders in the region on whether to scrap dividends to free up more money for lending, according to people familiar with the matter.

Banco Santander SA Chairman Ana Botin and Chief Executive Officer Jose Antonio Alvarez will donate half their salaries to an anti-virus charity and non executive directors will have their compensation reduced by 20%, the bank said on Monday.

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Credit Suisse will go ahead with canceling the shares it has already purchased under the program, according to the chairman’s letter.

The bank also released an executive compensation statment on Wedneday. Former Chief Executive Officer Tidjane Thiam’s pay for 2019 was cut by by about 15%, after the bank became embroiled in a spying scandal that led to his ouster.

“Mr. Thiam has taken accountability for the events and accepted a reduction of his non-financial assessment score,” board member Kai Nargolwala wrote in the report. The executive’s total compensation declined to 10.7 million Swiss francs, the bank said.

Undone by Scandal

The bank posted its best annual result under Thiam in 2019 after his first years in charge were marked by losses stemming from a major restructuring. The scandal, in which former executive Iqbal Khan was shadowed by private detectives, led to a reduction of the ex-CEO’s 2019 bonus, the bank said. Credit Suisse’s overall bonus pool was reduced by 1% from a year earlier to 3.17 billion francs.

Rohner said in a letter to shareholders that succession planning for his role “is well underway and progressing according to plan.” The executive said he will stand for re-election this year but won’t seek an extension at the bank’s general meeting in 2021.

Since being replaced by Gottstein, Thiam has been nominated to join the board of directors of French luxury goods group Kering SA.

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