The Financial Times reports that Credit Suisse now requires its senior managers to donate part of their bonuses to charity. More details on this new compensation structure can be found on the Credit Suisse press release website , though compulsory donations are not mentioned there. The FT article starts off as follows:
"Credit Suisse has become the first bank to force its staff to make compulsory charitable donations, with several hundred US managing directors directed to give 2.5 per cent of their 2010 bonuses to good causes.
The Swiss bank, which estimated the scheme would raise up to $30m for charity, said it would only apply in the US for tax and administrative reasons, but it could be extended in future."
I am not a financial geek and don't pretend to understand the complexities of fixing compensation levels to comply with all forms of regulation, tax-breaks, fical responsibilities and all that. However, if anyone should be fooled into thinking that this move has something to do with CSR and sustainability, I suggest they think again. In fact, it seems to me that we have a compensation structure for corporate execs which is based on unsustainable principles and needs a complete overhaul as part of a new sustainable infrastructure for financial institutions. The fact that a few execs will now have no option but to give up a massive 2.5% of their even more massive bonuses is about as useful and desirable as an ashtray on a motorbike. What's worse, it may just dupe these super-execs into thinking that they have done their bit and have become awesome philanthropists, when at the same time, workers around the world are still struggling to make a living wage.
If this is the New Economy, then we need a Newer one.
elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Author of CSR for HR: A necessary partnership for advancing responsible business practices. Contact me via www.twitter.com/elainecohen on Twitter or via my website www.b-yond.biz/en
1 comment:
I am surprised they claim to be the first bank that has done this. I knew people at Bear Stearns where top Execs were required to give 5% of their salary to charity.
Regardless of who did it first, you raise an important point about how people choose their level of support. Professional fundraisers will tell you that if you set a donation amount for participation, people tend to stop at that level. It is the reason that so many fundraising events remain "free."
Finally, I agree, it is extremely disappointing that we seem to have gone back to business as usual in our banking institutions. When will we recognize the pattern and make the necessary changes?
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