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Credit Suisse (CS) CEO's Compensation for 2018 Rises 30%

Zacks Equity Research

Credit Suisse Group’s CS CEO Tidjane Thiam has received 30% year-over-year higher compensation for 2018 as a reward for improving the company’s performance through his overhaul plan that was completed last year.

For 2018, Thiam received CHF 12.65 million as total compensation, of which CHF 3.35 million is fixed compensation and CHF 4.94 million represents short-term incentive awards. Also, he received CHF 4.36 million as long-term incentive awards, which was up significantly from 2017 when the CEO had voluntarily proposed to reduce these by 40%.

The executive group’s compensation surged 34% from 2017 to CHF 93.49 million mainly due to rise in CEO’s pay package.

The increase in compensation was on account of Thiam’s three-year restructuring plan (2015-2018) to boost the company’s performance. Having successfully completed the plan, Credit Suisse delivered its first annual post-tax profit since 2014 of CHF 2.1 billion for 2018.

Further, the executive group was commended for strengthening capital position as judged by common equity tier 1 ratio of 12.6% as of Dec 31, 2018 compared with 11.4% at the end of 2015. Moreover, the CEO successfully launched a share buyback program for 2019, thereby lifting investors’ confidence.

In the three years of restructuring, Thiam was also able to control the escalating cost base and maintained the targeted expense range of below CHF 17 billion for 2018.

He was successful in reviving the company, despite receiving continuous criticism from shareholders and involvement in legal matters. However, slow growth of the global economy amid trade tensions and Brexit-related concerns keeps us apprehensive.

Shares of Credit Suisse have lost 26% over the past six months compared with 4.6% decline of the industry it belongs to.

The stock currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space are Bank Of Montreal BMO, Lloyds Banking Group PLC LYG and Royal Bank Of Canada RY. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Bank Of Montreal has been raised 1.2% for the current year in the past 60 days. The company’s share price has jumped 14.9% in the past three months.

Lloyds has witnessed 2.4% upward earnings estimate revision for 2019 in the past 60 days. Its share price has risen 28.3% in the past three months.

Royal Bank Of Canada’s shares have gained 11.1% in three months’ time. Its earnings estimate for 2019 have moved up slightly in the past 60 days.

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