Flexible Compensation Models At Group Management Level

Introduction

Flexible management compensation remains a bone of contention in Switzerland. However, a verdict on salary systems is clear – aligning the interests of the managers with those of the shareholders through performance-related remuneration is often not met.

UBS and Credit Suisse stocks have shown poor performance while some of their managers have become multi-millionaires. This has resulted in much heated debate, including at the recent Credit Suisse general shareholder assembly, which discussed how high-ranking managers received bonuses while Credit Suisse suffered substantial losses in 2015 and 2016.

New compensation system

The board of directors of the Bank of Liechtenstein (LLB) has increasingly seen such discussions as a burden. According to the chairman of the board, Hans-Werner Gassner, in the past LLB's compensation wage regime was linked to net profits. However, this became unsatisfactory. At the beginning of 2013, LLB (which is listed on