Swiss Parliament Water Down Proposal for Banker Bonus Cap

Swiss lawmakers have watered down a proposal to cap banker compensation at 3-5 million francs/year. The lower house's committee removed the fixed cap, instead stating that variable remuneration should not be paid if the business doesn't perform well. The softened bill is likely to pass, with a vote possible as early as next month. This comes after the demise of Credit Suisse and criticism of UBS CEO Sergio Ermotti's $16 million pay.

Swiss lawmakers have significantly softened a proposal to cap banker compensation at 3-5 million Swiss francs per year. The lower house's committee on economy and taxation removed the fixed cap, instead emphasizing that variable remuneration should not be paid if the business does not perform well. This decision is likely to pave the way for the bill's passage, with a vote potentially taking place as early as next month.

The amendment comes amid ongoing debates on regulating Switzerland's largest bank, UBS Group AG (UBSG), and the broader financial sector. The move follows the recent demise of Credit Suisse, which has heightened scrutiny over executive compensation. Finance Minister Karin Keller-Sutter has previously criticized the compensation of UBS Chief Executive Officer Sergio Ermotti, who received a $16 million pay package [2].

The lower house's committee replaced the fixed cap with a provision that variable remuneration should be withheld in the absence of business success. This change means the bill, when it comes before the entire chamber, is likely to be voted on in its softened form, unless a counterproposal is introduced. The proposal to cap banker compensation at 3-5 million francs per year was initially approved by the upper house of parliament in March [2].

The decision to remove the fixed cap and focus on performance-based remuneration reflects a broader trend in financial regulation, aiming to align executive compensation with business performance and long-term shareholder interests. This approach is particularly relevant in the wake of the Credit Suisse collapse, which underscored the need for more stringent oversight of banker compensation.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3UB0TX:0-swiss-lawmakers-remove-contentious-pay-cap-from-remuneration-motion/
[2] https://www.bloomberg.com/news/articles/2025-08-21/swiss-banker-bonus-cap-proposal-watered-down-in-parliament