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Wall Street Journal, March 25, 2010 article


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MANAGEMENT   |   MARCH 25, 2010

Credit Suisse CEO Earns $17.9 Million, Doubles Up Blankfein


Twice the pay for half the hassle.

Credit Suisse Group Chief Executive Brady Dougan got $17.9 million for 2009, the Swiss bank said Thursday. The payout was more than six times what he got in 2008, reflecting Credit Suisse's swift recovery from the financial crisis.

Mr. Dougan's pay for 2009 was nearly double the $9.6 million that Goldman Sachs Group paid CEO Lloyd Blankfein, even though Goldman made 40% more in net income last year than Credit Suisse.

The contrast between the two CEOs underscores the tumult surrounding the pay culture at banks and securities firms around the world. Credit Suisse cut investment-banker pay last year and put some of their reduced bonuses in toxic assets the company wanted to unload from its balance sheet. Goldman reined in compensation as a percentage of revenue, but the move came after relentless grilling about its traditionally high bonuses, government connections and trading maneuvers.

"In a system where we're trying to tie pay to performance, it's unfortunate that you have situations in which a company does much better, but the management does less well because it's under the political microscope," says Mike Shah, a lawyer at Jones Day who advises companies on executive pay, employee benefits and corporate governance.

Mr. Dougan's 19.2 million-Swiss-franc payout for 2009 was up from 2.8 million Swiss francs in 2008 and came close to his 2007 pay of more than 22 million francs. The award came after Credit Suisse swung to a net profit of 6.72 billion Swiss francs in 2009 from a year-earlier net loss of 8.22 billion francs. Credit Suisse, which has a confident outlook for 2010, paid out a total of 148.9 million Swiss francs ($138.7 million) to its 13 top-ranking executives, up from 106.7 million francs in 2008.

The pay awards drew criticism from some shareholder activists and political parties. "It's very difficult to understand how bankers can justify these huge salaries," said Eva Zumbrunn, portfolio manager at Swiss pension fund Stiftung Abendrot, which holds assets worth about 700 million Swiss francs.

In a letter to shareholders, Mr. Dougan and Credit Suisse Chairman Hans-Ulrich Doerig wrote that "a skilled workforce is key to maintaining high levels of client satisfaction...which is why we will continue to attract...talented people while remaining sensitive to the public debate about compensation." Credit Suisse earmarked 20 million Swiss francs from the executive bonus pool to sponsor charitable projects.

Swiss lawmakers are discussing new salary rules aimed at capping pay and giving shareholders a bigger say on pay. Swiss bank UBS AG triggered a public outcry by paying huge bonuses to its key staff despite losses in 2009. UBS needed several large cash injections during the financial crisis.

Mr. Dougan's payout was roughly in line with those of J.P. Morgan Chase & Co. Chairman and Chief Executive James Dimon, who collected a $17 million bonus for 2009, and Wells Fargo & Co. CEO John Stumpf, who got a $21 million payout. Deutsche Bank AG CEO Josef Ackermann got about 9.6 million ($12.8 million).

Some other financial CEOs still are in the penalty box, either because of government ownership or boardroom scrutiny. The top executives at Barclays PLC, Royal Bank of Scotland Group PLC and Citigroup Inc. took no bonuses for 2009.

According to compensation-research firm Equilar, bonus payouts fell 12.6% in 2009 to an average of $812,800.

Write to Goran Mijuk at and Aaron Lucchetti at


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