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Compensation to members of the Executive Board

In line with our overall approach to compensation, our executive compensation policies are designed to attract executives of the highest quality, to retain them by rewarding them for superior performance and to motivate them for outstanding performance in the future. In addition, compensation should encourage strong teamwork and a meaningful alignment with the integrated bank strategy and the interests of shareholders.

Furthermore, and in support of the above objectives, the Compensation Committee established a bonus pool framework linked directly to our performance for the Executive Board, including the CEO. The bonus pool was used to define the total amount available for bonus payments, which were then delivered in cash and deferred share-based compensation. At the beginning of the year, a target bonus pool for this executive population was set assuming specific, pre-defined Credit Suisse financial and non-financial performance goals would be achieved in 2007. At the conclusion of the year, the Compensation Committee performed an assessment versus those goals and then modified the size of the available bonus pool based on actual results. The final bonus pool was then distributed to the members of the Executive Board and the CEO based on business performance, individual contributions and competitive compensation levels.

The performance criteria used in this framework of determining the size of the total bonus pool for the Executive Board and the CEO included the following:

  • the financial performance of the Group adjusted for extraordinary items compared to the strategic business plan;
  • assessment of delivery of defined non-financial targets in relation to our strategy;
  • consideration of the Group’s performance against the performance of its peer companies;
  • measurement against market information of companies with similar scope and complexity; and
  • measurement of shareholder satisfaction, assessed by reviewing objective data regarding the Group’s financial performance, with a focus on revenue growth, pre-tax margin growth, return on equity and earnings per share.

This approach is designed to assess performance in relation to the delivery of the strategic plan and satisfaction of the expectations of shareholders.

Executive compensation components

In line with our overall approach, executive compensation consists of a fixed salary and a variable performance bonus. Salaries for members of the Executive Board are reviewed annually. The annual performance bonus usually represents the most significant part of an executive’s total compensation package and varies from year to year depending on the executive’s performance. Part of the bonus is awarded in cash and a part in share-based awards. As a matter of policy, sharebased awards are usually a material portion of each executive’s compensation and are subject to vesting, holding and future performance requirements.

Credit Suisse’s executive compensation in 2007

Executive compensation for 2007 was based on the general approach set out above. In 2007, the members of the Executive Board (13 individuals) received on average, as a percentage of their total compensation, 7% salary, 19% cash bonus, 71% share-based awards and 3% other compensation.

The mandatory deferral amount of the total bonus for the CEO and the other members of the Executive Board was based on the approved share plan deferral schedule, materially reduced to reflect the revision of 2007 earnings as a result of the revaluing of certain ABS positions in our CDO trading business.

As in previous years, members of the Executive Board participated in the bank-wide share-based compensation plan and received ISUs or, to a limited extent, other share-based awards for performance in 2007. This participation is designed to ensure that executive compensation is in line with our overall approach to compensation.

Compensation for the members of the Executive Board




Cash


1
% of total
remu-
neration


Value
of
share-based
awards


2
% of total
remu-
neration



Pension
and similar
benefits



Other com-
pensation
categories


3
Total
remu-
neration


Number
of share-
based
awards


4
2007 (in CHF million, except where indicated)  
13 individuals 542.026%115.271%1.53.4162.11,659,896
of which highest paid:
Brady W. Dougan   		 3.4 16% 17.9 80% 0.01 0.98 22.3 272,866
2006 (in CHF million, except where indicated)  
8 individuals 83.755%67.744%1.40.2153.0660,956
1    Includes base salary for each Executive Board member ranging between CHF 0.65 million and CHF 1.25 million per year. The balance is variable cash compensation.
2    Share-based awards include 1,427,682 ISUs granted in 2008, each of which has a base component and a leverage component. The fair value of the base component of each ISU is CHF 54.90 and the fair value of the leverage component of each ISU is CHF 10.69. The total fair value of each ISU is CHF 65.59. The remainder refers to other share-based awards.
3    Other compensation includes lump sum expenses, child allowance, health care allowance and dividend and par value reduction equivalents.
4    All such share-based awards are included in the total remuneration.
5    Includes Oswald J. Grübel through May 4, 2007. Mr. Grübel is no longer an employee of the Group following his decision to retire as of May 5, 2007. Includes also Robert Shafir, who joined the Group as of August 1, 2007.


The per capita change in the total compensation value of the 2007 Executive Board members versus that of the 2006 values can be attributed to the following reasons: (i) the composition of the Executive Board in 2007 has changed; (ii) the impact of the Group’s financial performance relative to ist 2007 plan and the share price development during the year; and (iii) differentiated adjustments in personal compensation based on division performance.

2007 total compensation of the highest paid member
of the Executive Board

Our executive compensation policies guided the compensation recommendations made by the Compensation Committee and approved by the Board of Directors with respect to the 2007 compensation for Brady W. Dougan.

For 2007, the Compensation Committee based its total compensation recommendation on its review of: (i) the Group’s core operating financial performance relative to its 2007 plan and 2006 results, as well as the relative performance of Credit Suisse to that of its competitors; (ii) the share price development of Credit Suisse in 2007; (iii) the delivery of key integrated bank business objectives, specifically: (a) establishing Centers of Excellence that leverage the global talent pool and worldwide resources in order to supply high-quality internal services at competitive costs; (b) leveraging resources across Private Banking, Investment Banking and Asset Management to deliver the integrated bank, maximizing opportunities to innovate and offer products and services to our clients that drive growth and profitability; and (c) building the capability and mindset of continuous improvement, supporting the Group’s strategy to consistently deliver measurable efficiencies by systemically improving the cost structure and business processes of Credit Suisse; and (iv) the complexity and scope of the role that Mr. Dougan performs as CEO.

Mr. Dougan’s annual total compensation was CHF 22.3 million for 2007. The percentage composition of his total compensation was: 6% salary, 10% cash bonus, 80% ISUs and 4% other compensation.

Additional fees and remuneration

Three former members of our most senior executive body are eligible to receive office infrastructure and secretarial support. These services are based on existing resources and are not used on a regular basis. In addition, we have concluded an agreement with Oswald J. Grübel for the period of one year to act as a Senior Advisor to the Chairman of the Board. For his services, Mr. Grübel received a flat fee of CHF 150,000. During this period, Mr. Grübel received office infrastructure and secretarial support for which he compensated us in the amount of CHF 75,000.

No additional fees, severance payments or forms of remuneration were paid to current or former members of the most senior executive body or related parties during 2007.