Former Credit Suisse executives, cancellation of bonuses confirmed

Context

TL;DR

• The TF confirms the revocation of bonuses for former CS executives
• The TAF had upheld the appeals in March 2025
• Bonus cuts: 100%, 50% and 25% for three levels
• The acquisition of CS by UBS was announced on March 19, 2023

Key facts

• What → revocation of variable compensation not yet paid
• Authority → TF, following the appeal by the Confederation and UBS
• Rule → Article 10a of the Banking Act (LBCR)
• Measures → 100%, 50% and 25% at the three highest management levels
• Average reduction → 68'000 francs
• Liquidity assistance → 168 billion francs, fully repaid

LAUSANNE - The Federal Supreme Court (TF) declared the revocation of bonuses awarded to former Credit Suisse (CS) executives lawful, overturning the decision of the Federal Administrative Court (TAF) and upholding the appeal by the Confederation and UBS. The ruling concerns variable compensation intended for the three highest management levels of the now-defunct institution, but not yet paid.

At the center was Article 10a of the Banking Act (LBCR). The TF had to determine whether this provision was sufficient to allow the Federal Council to revoke in whole or in part remuneration still to be paid when a systemically important bank, or its parent company, receives direct or indirect state aid using Confederation funds.

The appeals by the affected executives had been upheld by the TAF in March 2025. The lower court held that the provision permitted only temporary measures, namely suspension of payment. In its judgment of September 16, published today, the TF instead adopted a different interpretation.

The interpretation of Article 10a

For the judges in Lausanne, the duration of the support referred to by the law indicates the period during which the government is authorized to issue measures, not the duration of the individual measure. Moreover, the fact that the right to variable remuneration may be “limited” indicates something more than simply postponing payment.

The TF also referred to the Federal Council’s message to Parliament on the amendment of the LBCR and the introduction of the too big to fail rules. In that document, according to the judgment, the government specified that the measures could go as far as revoking variable remuneration and affect the related rights.

The aim was to prevent public funds from financing bonuses deemed inappropriate, including those contractually provided for but not yet paid for previous financial years. The TF found that the conditions of Article 10a had been met and held that the Federal Council was required to take measures. The reduction was applied gradually: 100% at the first management level, 50% at the second and 25% at the third. On average, the cut reached 68'000 francs, while fixed remuneration in the final year of employment, which was not reduced, was approximately 1,4 million.

Operational details

What changes for the case under review

The practical difference between the two judgments concerns the meaning of the measure adopted by the Federal Council. The TAF had interpreted it as a temporary suspension: payment of variable compensation would be deferred. The TF, however, held that the word «limited» also allows for a substantial reduction or a total or partial revocation of bonuses not yet paid.

Three levels, three measures

The case therefore does not involve a uniform cut for all those affected. The percentage depends on the management level: 100% indicates the largest measure, while 25% is the smallest among those indicated in the source. The economic comparison provided by the judges adds two points of reference: the average reduction was 68'000 francs and, in the last year of employment, the average unreduced fixed remuneration was approximately 1,4 million francs.

For anyone interpreting variable remuneration in the Credit Suisse case, the distinction between the fixed component and bonuses is therefore decisive. The ruling concerns variable compensation not yet paid; according to the data reported by the Federal Supreme Court, fixed remuneration was not reduced. The source also specifies that contractually stipulated variable remuneration for previous financial years could be involved, when the foundations for the need for state aid had been laid.

The judges rejected the executives' argument that the decision was a sanction. Article 10a, in the TF's interpretation, serves preventive rather than punitive purposes. The employees had been informed of the possibility of eliminating the variable component through restrictive clauses included in their compensation plans.

The scope of the decision remains as described by the source: direct or indirect state aid using Confederation funds to a systemically important bank or its parent company. The measures apply during the period in which the government is authorized to intervene. The judgment therefore does not turn every salary dispute into a similar issue: the TF's reasoning is tied to the provision, public support and the three management levels in the CS case.

Key points

How to reconstruct the case

The sequence of events makes it possible to verify why the issue of bonuses was linked to the liquidity crisis and the intervention of the Confederation. To follow the case without confusing the different stages, it is advisable to proceed by date and distinguish the authorities' announcements from the judicial decisions.

The institutional sequence

1. On March 15, 2023, FINMA and BNS announced that Credit Suisse continued to meet capital and liquidity requirements. At the same time, BNS announced liquidity support.

2. On March 16, the Federal Council issued the liquidity support ordinance. This provided for additional loans and Confederation guarantees in the event of default for loans granted by BNS to systemically important banks.

3. On March 19, 2023, UBS's acquisition of CS was announced. On the same day, the Federal Council amended the ordinance on liquidity assistance, adding a provision on the adoption of measures concerning remuneration.

4. By the end of March 2023, CS had received liquidity assistance amounting to 168 billion francs; the amount was repaid in full.

5. Only after reconstructing this sequence can one examine the judicial stage: in March 2025, TAF had upheld the appeals, while TF subsequently overturned that decision in the judgment of September 16 published today.

To correctly apply the logic of the case, there are three points to check: the remuneration must be variable and not yet paid; the measure must concern one of the three highest management levels; the legal reference is Article 10a of LBCR, linked to the public support provided for by law. The scale indicated by the judges remains 100%, 50% and 25%, not a single percentage for everyone.

The source does not describe an individual procedure, a form or a deadline for other workers. Therefore, the case should be read as a federal decision on the remuneration of former CS executives, without automatically extending its effects to different situations. To connect the distinction between fixed and variable pay with reading your own payslip, consult busta paga svizzera.

Source: tio.ch