Europe's Banker Pay Soars

Credit Suisse's CEO Gets Pay Boost.

By LAURA STEVENS in Frankfurt and ANDREW MORSE in ZurichThe chief executive of Credit Suisse Group AG CSGN.VX +0.62% received a 34% increase in total compensation in 2012, the Swiss lender said, a year in which the bank's profit fell by roughly a third.

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Deutsche Bank co-CEOs

Jürgen Fitschen, left, and

Anshu Jain in 2012.

Meanwhile, Deutsche Bank AG's DBK.XE +1.50% co-CEOs, Anshu Jain and Jürgen Fitschen, each earned €4.8 million ($6.19 million) in total compensation for 2012, the bank disclosed Friday. The two chief executives came on board in June.

Though modest by Wall Street standards, the paydays come amid concerns in Europe over how executives, particularly bankers, are paid. With much of Europe suffering under the strain of public spending cuts and recession, corporate compensation packages have drawn the ire of politicians and the public.

Credit Suisse said Friday that it rewarded CEO Brady Dougan with total compensation of 7.8 million Swiss francs ($8.2 million). The pay package for Mr. Dougan, who repositioned the bank in 2012 and improved its capital position, includes 2.5 million francs in salary; 500,000 francs cash bonus; 2.5 million francs in deferred shares that vest over three years, subject to clawback provisions; two million francs of a deferred cash award that vests over a five-year period, subject to certain provisions; and 270,000 francs in other benefits.

Deutsche Bank didn't break out pay for salary, bonus or stock awards.

The European Union completed plans this week to cap bankers' bonuses at the level of their base salary. Swiss voters recently passed an initiative that directs the government to draft a bill that gives shareholders a binding say on pay and introduces fines and jail terms for violators. A new proposal to limit the pay of a company's most highly paid employee to 12 times that of its lowest paid is expected to be put in front of Swiss voters this year.

Critics of such initiatives warn that further restrictions will drive business and talent to other parts of the globe, further undermining the European economy.

Credit Suisse saw net profit slip to 1.35 billion francs from 1.95 billion francs a year earlier. In addition to improving its capital position, the Zurich lender also reduced risk-weighted assets and more than doubled pretax income to five billion francs.

Total compensation paid by the bank fell 5%, to 12.53 billion francs. The bank had 2,300 fewer employees in 2012 than it did in 2011.

Robert Shafir, who runs the bank's asset-management unit, remained Credit Suisse's highest-paid executive with compensation of 10.59 million francs, compared with 8.5 million francs in 2011.

Credit Suisse acknowledged the trend of compensation oversight by regulators and shareholders in its annual report and specifically referenced the Swiss initiative. "The group continuously monitors regulatory and legislative developments in all applicable jurisdictions," the lender said.

Deutsche Bank's Messrs. Jain and Fitschen spent their first six months in office working on restructuring the bank to boost a key measure of the bank's health known as its capital ratio. When the bank announced full-year results in January, with profits for the year all but erased by legal costs, shares received a boost when the capital ratio was far ahead of schedule.

But boosting capital has been expensive, with a number of charges related to shedding risk. In addition, the bank this week added an additional €600 million to its legal provisions due to suits related to its U.S. mortgage business, bringing its total legal provisions to €2.4 billion.

The bank earned €237 million in 2012, with a €2.54 billion loss in the fourth quarter largely due to restructuring costs and legal provisions.

The fourth-quarter hit did factor into deciding how much to pay executives, Supervisory Board Chairman Paul Achleitner said at a news conference Friday, adding that the chiefs' pay was "significantly below the global peers." J.P. Morgan Chase JPM +0.89% & Co. Chief Executive James Dimon had total compensation of $18.7 million in 2012, the Wall Street bank said in a filing Friday. UBS AG UBS +1.63% paid CEO Sergio Ermotti total compensation of 8.9 million francs in 2012.

Deutsche Bank's seven management board members earned €26.3 million in total compensation for 2012, compared with €40.1 million in 2011. Bonuses for the management board members, who include Messrs. Jain and Fitschen, will be paid out entirely in shares in five years.

Write to Laura Stevens at laura.stevens@wsj.com and Andrew Morse at andrew.morse@wsj.com
Fuente: THE WALL STREET JOURNAL