Credit Suisse Chair Axel Lehmann is forgoing the $1.6 million he would have been paid first year on the job, the bank disclosed in a Securities and Exchange Commission filing Tuesday.
The bank identified “material weaknesses” in its internal controls over financial reporting in the past two years, as it reported its biggest annual loss since the 2007-08 financial crisis, according to the filing.
“Management did not design and maintain effective controls over the classification and presentation of the consolidated statement of cash flows,” the bank said Tuesday.
The Swiss lender was compelled to delay the release of its annual report from last week to address some last-minute questions raised by the SEC on cash-flow statements from 2019 and 2020 but did not explicitly say if they did so.
Credit Suisse said the Tuesday report “fairly present[s]” the bank’s financial condition and that management is working on developing a plan to remediate weaknesses and strengthen control frameworks.
The bank’s CEO, Ulrich Körner, is overseeing a radical restructuring meant to bring Credit Suisse back to profitability. That includes spinning off its capital markets and advisory units under a revived CS First Boston banner and slashing 9,000 jobs by 2025.
Credit Suisse, in its Tuesday filing, noted that changes in their ratings by Standard and Poor’s, Fitch and Moody’s “adversely” affect the business, leading to elevated borrowing costs and limiting the bank’s access to short-term funding markets.
Lehmann’s compensation was adjusted from $4.92 million to $4.15 million for 2023-24, according to the filing. Lehmann’s share compensation, however, will be increased from 33% to 50%.
In forgoing his fees, Lehmann follows the footsteps of the executive board members who will not receive a bonus for 2022 — when the bank was bogged down by cash outflows. The withdrawals continued into this month, the bank noted in its filing.
Körner earned $2.73 million last year, including for this role as an executive board member before taking up the role of CEO.
Credit Suisse also reduced its 2022 pool for all employees by half, keeping aside only 1 billion Swiss francs, compared with 2 billion the year before.