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Banks (Finance)

Swiss Parliament Approves Revised Motion on Banker Remuneration

Strategic Insights

— 1 min read

The Swiss Parliament has approved a revised motion aimed at regulating compensation received by senior managers of Swiss banks. The original motion, filed by MP Jakob Stark, proposed a maximum remuneration of 3-5 million Swiss francs. However, the revised motion, adopted by the National Council, removes this cap and instead requires that compensation systems do not create adverse incentives and that variable compensation is linked to actual positive results.

Key Takeaways:

  • The revised motion drops the original proposal for a maximum remuneration of 3-5 million Swiss francs, instead focusing on ensuring that compensation systems do not create adverse incentives.
  • The motion requires that variable compensation and dividend distributions be linked to actual positive results, rather than subjective criteria.
  • The Swiss Financial Market Supervisory Authority (FINMA) has already set standards for remuneration schemes, which must be simple, transparent, implementable, and oriented towards the long term.
  • Publicly listed banks and systemically important banks (SIBs) must establish a remuneration committee under FINMA's Circular 2017/1 on corporate governance for banks.
  • The Stark motion's revision comes in the wake of the Credit Suisse crisis, which raised concerns about the adequacy of FINMA's supervisory instruments and the potential for excessive bonuses despite losses.
  • The Swiss Federal Council has recommended that SIBs implement remuneration policies that do not produce adverse incentives and discourage excessive risk-taking.
  • The National Council's decision to revise the motion reflects concerns that the original proposal was too restrictive and focused on competitiveness rather than accountability.
  • The Swiss motion is part of a broader trend towards strengthening corporate governance in banks and financial institutions globally.

Statistics:

  • The revised motion removes the proposed maximum remuneration of 3-5 million Swiss francs.
  • Variable compensation for senior managers of Swiss banks could be linked to actual positive results, rather than subjective criteria.
  • A remuneration committee must be established by publicly listed banks and SIBs under FINMA's Circular 2017/1 on corporate governance for banks.
  • The Swiss Federal Council recommended that SIBs implement remuneration policies that do not produce adverse incentives and discourage excessive risk-taking in 2024.

Sources:

  • Article on Mondaq, 2025.
  • Swiss Financial Market Supervisory Authority (FINMA) - Circular 2010/1 on remuneration schemes.
  • Swiss Financial Market Supervisory Authority (FINMA) - Circular 2017/1 on corporate governance for banks.
  • Swiss Federal Council - Report on banking stability (10 April 2024).
  • Prudential Regulation Authority (PRA) - Supervisory Statement 2/17 - Remuneration.
  • Financial Conduct Authority (FCA) - Regulatory framework on remuneration.

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