Swiss Banker Bonus Cap Proposal Watered Down in Parliament
In March, the upper house of parliament voted in favor of the bill to cap salaries of top executives at Swiss banks at between 3 million and 5 million francs per year. That bill has now been changed in the lower house, according to a statement from the parliament. That means the cap is unlikely to become law.
Executive compensation has become a hot button issue for Swiss politicians in recent years, especially after the demise of Credit Suisse. Finance Minister Karin Keller-Sutter has previously criticized the compensation of UBS Chief Executive Officer Sergio Ermotti.
Chief executive officers at Swiss listed companies have seen significant pay raises since the Covid pandemic, according to a report by proxy advisor Ethos.
CEOs at SMI companies made 8.3 million francs on average in 2024, a 7.4% increase compared to the previous-year period, it said.
On the plan to cap banker salaries, the lower house's committee for economy and taxation has removed a fixed upper limit from the text of the bill, according to the statement. Instead the text now only states that 'variable remuneration should not be paid if the business does not perform well,' it said.
The committee decision means that when the bill comes before the whole chamber, lawmakers will likely only vote on the softened version, unless a counterproposal is launched. A vote in parliament could come as early as next month.
The Swiss move chimes with a broader push in the region among jurisdictions not part of the European Union. In 2023, the UK scrapped an EU-era cap limiting bonuses to a maximum of twice a banker's base pay. Wall Street banks broadly welcomed the move, saying it would help the City of London's appeal as a financial center and mean firms could better align the paycheck structure of top bankers with the bonus-heavy packages of their New York counterparts.
The UK bonus cap was introduced by the EU back in 2014 in response to public outcry about the financial crisis. For most lenders, the cap meant their material risk takers — which can be investment bankers, traders, risk managers or even compliance personnel — could earn variable compensation that was equal to two times their fixed salary.
(Updates with Ethos report, background on UK from fourth paragraph.)
More stories like this are available on bloomberg.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
35 minutes ago
- Time of India
Niranjan Gupta named HUL's CFO-designate
New Delhi: Consumer goods company Hindustan Unilever on Thursday named Niranjan Gupta its chief financial officer-designate and a member of the management committee with effect September 1. Gupta, a former chief executive of two-wheeler maker Hero MotoCorp who had started his career at HUL, will take over from Ritesh Tiwari as executive director-finance and CFO on November 1, company said in a news release. Tiwari has been named global head of M&A and treasury at HUL parent Unilever effective November 1. Gupta has experience across finance, M&As, supply chain and strategic roles in diverse industries. Following his initial two-decade stint at HUL, he spent three-years at Vedanta and joined Hero MotoCorp in 2017 as its CFO. He was elevated to its CEO in 2023. He had played a pivotal role at Hero MotoCorp, strengthening the financial health of its business, creating a strategy for the long term and establishing strategic partnerships, including with American motorcycle maker Harley-Davidson. He will report to CEO and managing director Priya Nair. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Your Car Insurance Provider Is Laughing at You Right Now – Here's Why AutoTrends Learn More Undo Tiwari took over as the finance director and CFO at HUL in 2021 and helped steer the company through the Covid-19 pandemic. In his new role, he will be based out of London. Tiwari allocated capital in line with the company's strategic priorities to drive competitive volume-led growth amid volatile market conditions. He led key acquisitions, disposals and partnerships that have helped HUL in sharpening its portfolio. More recently, he steered the ice-cream business demerger into Kwality Walls (India) Ltd, paving the way for its independent listing. Live Events
Mint
2 hours ago
- Mint
EU's trade framework with US could offer key lessons for India
New Delhi: The recently-announced US-EU (European Union) Framework Agreement on trade—which maintains a 15% blanket tariff on the bloc's exports to the world's largest economy—could offer important lessons for India as it negotiates its own rules under the EU's Carbon Border Adjustment Mechanism (CBAM). As New Delhi pursues a free trade agreement (FTA) with the EU, experts say the country must secure similar carve-outs and flexibilities, particularly to protect Indian small and medium enterprises (SMEs) and exporters from steep compliance costs. Without such measures, the country's firms could face significant regulatory hurdles, while US competitors benefit from preferential treatment, potentially eroding India's competitive position in the European markets. 'For India, which is in the advanced stages of negotiating its own free trade agreement with the EU, these developments carry clear lessons. New Delhi should push for similar carve-outs and flexibilities in CBAM and sustainability rules, especially to shield Indian SMEs and exporters from disproportionate costs," said Ajay Srivastava, founder of economic think tank, Global Trade Research Initiative (GTRI). Indeed, the US-EU Framework Agreement on trade also grants the US concessions on European regulatory frameworks, including CBAM and Corporate Sustainability Rules. The EU will provide flexibilities for US SMEs under CBAM, effective 1 January, 2026, and ease compliance under the Corporate Sustainability Due Diligence and Reporting Directives (CSDDD and CSRD) from July 2027, even considering exemptions for firms already subject to high-standard rules. These steps underscore the EU's readiness to accommodate US concerns when market access and strategic partnerships are at stake. A senior government official told Mint that India will need to negotiate its CBAM strategy well with the EU. 'The US-EU trade framework could be useful in this regard," the person added, requesting anonymity. 'India will also seek similar concessions while finalizing the deal," the person added. India's FTA negotiations with the EU aim to expand market access, boost exports, and strengthen strategic economic ties. Key discussions focus on tariff cuts, regulatory harmonization, and protection for Indian companies, especially SMEs, against steep compliance costs. The deal is expected to be finalized by the end of the year. "The EU has shown flexibility by addressing certain concerns of the US under CBAM, including on the de minimis threshold," said Pankaj Chadha, chairman at Engineering Export Promotion Council. "India, as a developing economy, should also negotiate for a fair deal with the EU, aiming for zero CBAM on its exports. Our exporters need a level playing field to remain competitive," he added. Economists, however, do not expect India's exports to see any immediate impact of the US-EU Framework Agreement on trade. 'For India, the US tariffs on EU exports are unlikely to have an immediate impact. Our key export sectors to the US, like RMG (ready-made garments), precious stones, leather, and agricultural products, don't directly compete with the EU," said Madan Sabnavis, chief economist at Bank of Baroda. Sectors such as electronics, which might have overlapped, are largely exempted from the US tariffs, he added.
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
EU, US set new steps to cut tariffs and boost transatlantic trade
The US and European Union took the next steps to formalize their trade pact, detailing plans that could reduce tariffs on European automobiles within weeks while opening the door to new potential discounts for steel and aluminum. The joint statement issued Thursday advances the preliminary deal announced a month ago, by including specific benchmarks for the EU to secure its promised sectoral tariff discounts on cars, pharmaceuticals and semiconductors, as well as new commitments to cooperate on economic security matters, food standards and digital trade. President Donald Trump has repeatedly praised the sweeping US-EU trade framework, extolling it as 'a big deal' in a Monday White House meeting with foreign leaders including European Commission President Ursula von der Leyen. The deal provides predictability and 'delivers for our citizens & companies, and strengthens transatlantic relations,' von der Leyen said in a post on the social-media platform X. The development underscores the nature of trade talks under Trump, with some initial, broad pronouncements of deals giving way to weeks or more of work to hammer out detailed agreements. Many of them are also tied to sweeping policy changes that could take time to materialize. For example, Trump already imposed a flat 15 per cent rate on most European goods — half the 30 per cent he'd previously threatened. But the US promise to extend that lower levy to autos and auto parts now hinges on the EU formally introducing a legislative proposal to eliminate a host of its own tariffs on US industrial goods and provide 'preferential market access' for some US seafood and agricultural products. Car Relief The statement outlines choreographed action on both sides of the Atlantic, with the US codifying reduced auto tariffs once the EU 'formally introduces the necessary legislative proposal to enact' its own promised tariff reductions. The discounted 15 per cent tariffs on European auto imports — down from the current 27.5 per cent — would be effective from the start of the same month that legislation is advanced. They could be in place within weeks, said a senior Trump administration official who briefed reporters on the initiative. The shift has been anxiously anticipated by some EU member states, particularly Germany, which exported $34.9 billion of new cars and auto parts to the US in 2024. The legislative trigger is designed to help ensure the EU delivers on its promised tariff reductions — and ensure the 27-nation bloc has sufficient pressure to obtain the political mandate needed to make the changes, the administration official said. The US is committing to apply lower most-favored-nation, or MFN, tariffs to a slew of other European products — including aircraft and aircraft parts, generic pharmaceuticals and their ingredients and some natural resources such as cork. More carve-outs could be added in future, the statement says, but for now the EU has not succeeded in receiving the same treatment for wines, spirits and medical devices. The US is also renewing its commitment to cap future sectoral tariffs on European pharmaceutical products, semiconductors and lumber at 15 per cent. Metals Quotas It's also opening the prospect for discounted rates on some steel, aluminum and derivative products under a quota system. That's a shift from the White House's stated plans in July, when the Trump administration insisted those metal tariffs would remain at 50 per cent, helping to lower trade deficits with the EU and bring revenue to US coffers. On steel and aluminum, the EU and US now assert they 'intend to consider the possibility to cooperate on ring-fencing their respective domestic markets from overcapacity, while ensuring secure supply chains between each other,' according to the joint statement. Under the terms agreed by the two sides, the EU faces a 15 per cent tariff on most of its exports. The US clarified in an executive order last month that the EU's rate would function as a ceiling, while other exporters' universal duty is currently in addition to existing MFN duties. Goods covered by the order that faced MFN levies above 15 per cent will continue to do so, but separate sectoral tariffs do not stack on top of each other or on top of the universal rates, said some of the people. QuickTake: EU-US Trade Deal - What Has and Hasn't Been Agreed? The document leaves unanswered major questions about how the EU might fulfill its promise to invest $600 billion in the US or purchase some $750 billion in US energy resources — including liquefied natural gas, oil and nuclear power products — through 2028. Private sector investments by European companies would be expected across strategic sectors in the US, including pharmaceuticals, semiconductors and advanced manufacturing, the senior administration official said. Meanwhile, the EU plans to substantially increase procurement of military and defense equipment from the US, according to the statement, and intends to buy at least $40 billion worth of US artificial intelligence chips. According to the joint statement, the EU intends to provide preferential market access for a range of seafood and non-sensitive agricultural goods imported from the US, including tree nuts, certain dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, pork and bison meat. Digital Trade In recent weeks, deliberations over the EU's digital services regulations and potential relief for some goods — including wine and spirits - were seen prolonging talks. The EU didn't secure lower rates for alcohol in the joint statement. The US and EU are pledging to address some of what the joint statement calls 'unjustified digital trade barriers,' with the bloc confirming that it will 'not adopt or maintain network usage fees.' A question-and-answer paper released Thursday by Brussels said it made no commitment on digital services regulation. 'The Joint Statement does not include any commitment on EU digital regulations,' it said. The EU has committed to work toward providing more 'flexibilities' in its levy on carbon-intensive imports set to kick in next year, the statement said, and it will seek to ensure its corporate sustainability due diligence and reporting requirements don't pose 'undue restrictions on transatlantic trade.' Potential changes could include eased compliance requirements for small- and medium-sized businesses, according to the statement.
