Swiss banks rocked by shareholder revolts on pay

UBS and Credit Suisse suffer large shareholder rejection of their remuneration reports.

Switzerland’s largest banks, UBS and Credit Suisse, were both rocked by major shareholder revolts on pay at last week’s annual general meetings (AGM) as investors upped the ante on votes against remuneration reports. At the UBS AGM on April 28, 32.2% of shareholders voted down the bank’s 2010 compensation report, an unusually high figure, while 64.4% voted in favour and 3.4% abstained. Dutch pension fund management giants ABP and PGGM both cast their votes against UBS’ management.
Meanwhile at the AGM of Credit Suisse the following day on April 29, 23.5% of shareholders went against the advice of company management and voted against the group remuneration report. Just over 74% of shareholders approved the report, while 2.4% of investors abstained. ISS, the world’s largest proxy share voting agency had recommended a vote against the Credit Suisse pay deal, which Credit Suisse said “surprised and disappointed” the bank.Switzerland’s Ethos Foundation, which looks after more than CHF2.3bn (€1.4bn) in assets for more than 100 pension funds and foundations, and which has been highly active in the say-on-pay agitation by Swiss investors, said shareholders in the country were becoming more active in their voting policies.
It said that in 2009, just 10 AGM resolutions in Switzerland generated more than 20% opposition, while last year that figure had risen to 15.
Already this year – alongside the bank votes – almost 40% of shareholders at the AGM of Novartis, the Swiss pharma company, failed to back the company’s remuneration report. The Swiss regulator is understood to be looking at regulation that would oblige institutional investors to exercise their share votes and report back on them. For its part, Ethos said it had signed up to the UK Stewardship Code, which calls for investors to publish their voting record.