Switzerland’s Federal Department of Finance appeals court ruling that struck down Credit Suisse variable pay cuts for former senior managers

Switzerland’s Federal Department of Finance (FDF) has decided to appeal to the Federal Supreme Court after the Federal Administrative Court found that the FDF’s reduction or cancellation of variable remuneration for certain former Credit Suisse senior managers was illegal. The remuneration measures were imposed during UBS’s takeover of Credit Suisse, with the FDF relying on the Banking Act to instruct Credit Suisse to reduce variable remuneration payments to certain senior managers and, in some cases, cancel them. The Federal Administrative Court upheld appeals from a number of affected managers, ruled that the definitive reduction or cancellation ordered by the FDF was unlawful, and repealed the order. The Federal Supreme Court will issue the final decision on the matter. The FDF argues that the Federal Administrative Court’s reading of the legal basis did not adequately reflect key aspects, including the exceptional circumstances leading up to the Credit Suisse takeover that the legislator could not have foreseen.