The Swiss banking giant is increasing its efforts to claw back millions in bonus payments which Credit Suisse made in order to retain senior executives before its collapse.

UBS has contacted hundreds of bankers from its new acquisition, Credit Suisse, and offered some of them payment plans over several years in order to recoup part of the 1.2 billion Swiss francs of restricted cash bonuses, known internally as «upfront cash awards».

This is according to a report from the agency «Bloomberg» with reference to informed persons and documents which they have seen. According to one of the sources, the total amount that UBS has demanded back is less than 651 million Swiss francs.

Threats of Legal Action

The report states that the bank’s lawyers are contacting former employees who left Credit Suisse of their own accord, and threatening them with legal action if the demanded amounts are not paid. A spokesperson from UBS declined to comment when approached by «Bloomberg».

Although it is common practice to demand back recoverable bonuses when an employee leaves the bank – a measure known as a «clawback» – the extent and structure of the situation at Credit Suisse is remarkable, the report goes on. In early 2022 as well as this year, the bank offered cash bonuses to the higher management levels (managing directors and directors), but these bonuses had strings attached.

Cushioning the Blow

At that time, Credit Suisse wanted to cushion the blow of an ever-shrinking bonus pool caused by the bank’s struggles. During the downfall of Credit Suisse and the subsequent takeover by UBS, however, there was a mass exodus of employees.

Deferred bonuses are normally granted in the form of restricted shares that the bank can simply cancel. However, to retain talent in spite of several restructurings and a falling share price, Credit Suisse paid out cash bonuses with a clause requiring employees to repay some of the bonus if they left the bank within three years.

No Guarantee

For many bankers who are switching to the competition, new employers are offering a signing bonus that covers the bonuses which are lost or must be paid back.

However, these types of agreements are not universal, particularly if bankers move to a different industry.