Credit Suisse bank executives fired as a result of restructuring raises questions as to what happens to their bonuses. The bank seemingly relents.
Credit Suisse recently revised its bonus program so that senior managers receive the cash portion of their variable compensation immediately. In return, the bank made it clear it will claw back on a pro-rata basis the amount paid from those accepting the bonus and then leaving the bank within three years.
The bonus program has one notable exception. All Credit Suisse bankers leaving due to «termination without cause» or retirement will not be affected.
No Clawback
Accordingly, bankers who have been dismissed will receive a consolation prize in the form of the bonus payments already granted, according to a report by «Financial News» (behind paywall) Tuesday, citing people familiar.
Directors and executives earning over $250,000 can sign up for the bonus program until January 30, according to the report.
Shrinking Bonus Pool
Credit Suisse is applying the new bonus system for the second year as part of an effort to retain bankers amidst the bank's restructuring. At the same time, the bank is preparing to cut its entire bonus pool by half.
In addition to the bonus program, Credit Suisse offered one-time payments to a select group of dealmakers to discourage them from switching to competitors. In the third quarter of 2022 alone, it granted about $300 million in deferred cash and equity bonuses, mostly to investment bank employees.
