Justice: Court declares bonus ban for Credit Suisse bankers unlawful

The decision of the Federal Department of Finance to reduce or cancel the bonuses of former Credit Suisse bankers because the now bankrupt bank had to be rescued by UBS with state aid was unlawful, according to a ruling by the Federal Administrative Court.

Following UBS's rescue of Credit Suisse in March 2023, the Ministry of Finance issued a regulation requiring Credit Suisse to completely eliminate bonuses for members of the executive board. Bonuses for managers one level lower were to be halved and for employees two levels lower, they were to be reduced by 25 percent.

The bonus ban was justified by the granting of state aid. On Wednesday, the Federal Administrative Court ruled in a "pilot judgment" for a group of twelve affected individuals that the government's decision was unlawful. The court stated that approximately 1,000 people could be affected by the decision. Neither the Ministry of Finance nor UBS had been able to prove that any of the twelve affected managers had caused excessive risks through their actions or omissions, thereby jeopardizing Credit Suisse's financial situation, the court found.

The judgment is not yet final and can be appealed to the Federal Supreme Court.

The pool of variable compensation awarded by Credit Suisse for 2022, its last full year as an independent bank, amounted to CHF 2.76 billion. This amount was drastically reduced by the share price collapse during the acquisition. The Ministry of Finance's regulation, which affected unpaid bonuses, totaled CHF 62 million, according to the ministry.