With the recent turmoil in the Swiss banking industry, the issue of executive bonuses has become a hot topic of debate. However, at least one bank has been spared from the controversy. Zurich's Cantonal Council has decided not to interfere with the salary policy of the Zuercher Kantonalbank (ZKB), scuttling a parliamentary initiative that would have placed an upper limit on salaries at the bank. The initiative was introduced by the left-leaning Social Democratic Party (SP), but was rejected by a vote of 101 to 66, with two abstentions, on Monday, according to the news agency "SDA".
The vote has come under criticism from centre-right parties, who opposed the initiative on the grounds that the Bank Council, elected by the Cantonal Council, is responsible for setting salaries. While condemning the "bonus culture", they believed that the initiative would have undermined the autonomy of the ZKB.
The initiative had called for the head of the ZKB to earn no more than Swiss National Bank President Thomas Jordan, who earned 1.35 million francs last year, according to the SNB's annual report. However, in August of last year, when Martin Scholl handed over the post to successor Urs Baumann, his total compensation amounted to 2.64 million francs. Separate details of Baumann's salary were not provided in the ZKB annual report.
This wasn't the first time that Zurich's parliament had attempted to impose a salary cap at ZKB. At the beginning of 2020, another SP initiative calling for a maximum salary of one million francs for top executives failed.
The debate around executive bonuses has been particularly heated in the Swiss banking industry in recent years. The public outcry over executive pay has led to increased scrutiny and pressure on banks to justify the high salaries of their top executives. In response, some banks have voluntarily reduced executive bonuses, while others have faced pressure from shareholders to do the same.
The decision by the Cantonal Council not to interfere with the salary policy of the ZKB will likely be viewed as a victory by the bank and its supporters. However, it remains to be seen how other banks in Switzerland will respond to the ongoing debate around executive pay, and whether they will take steps to reduce bonuses voluntarily or in response to pressure from shareholders and the public.
According to the ZKB's annual reports, the salaries of the bank's CEOs in recent years were:
- Urs Baumann (CEO from August 2020 - present): CHF 2.46 million (2020)
- Martin Scholl (CEO from 2013 - August 2020): CHF 2.64 million (2019)
- Markus Granziol (CEO from 2009 - 2013): CHF 2.65 million (2012)
- Hanspeter Rhyner (CEO from 2003 - 2009): CHF 2.72 million (2008)
- Andreas Andreades (CEO from 1999 - 2003): CHF 1.59 million (2002)
