Credit Suisse Group AG will pay some of its junior and mid-level banker bonuses in installments, adding to turmoil in the firm’s handling of employee compensation as it seeks to overhaul its operations after a series of scandals and deep losses.
(Bloomberg) — Credit Suisse Group AG will pay some of its junior and mid-level banker bonuses in installments, adding to turmoil in the firm’s handling of employee compensation as it seeks to overhaul its operations after a series of scandals and deep losses.
Selective associates and vice presidents at the Zurich-based lender were told on Tuesday that the much-anticipated rewards will be doled out in chunks, according to people familiar with the matter. Each of the three installments will be paid about 40 days after April 1, July 1 and Oct. 1, the people said, asking not to be identified discussing private information.
The embattled Swiss lender also this week postponed its much-anticipated compensation day for some investment bankers at the managing director or director level, straining its relationship with employees as it restructures its Wall Street operations. Credit Suisse is seeking to cling on to talent contending with an overhaul after a string of scandals and billions of dollars in losses sparked a tide of departures.
A representative for Credit Suisse declined to comment.
The bank as considered cutting the bonus pool for 2022 by about half, people familiar have said. The belt-tightening is likely more severe than at Wall Street peers including JPMorgan Chase & Co. and Citigroup Inc., which are paring bonuses after a slump in dealmaking and sales of new securities.
Credit Suisse has also been paying upfront cash bonuses to retain top performers, with the caveat they stay on for three years or pay some back. That program is now facing difficulties as some former employees based in Europe and Asia are weighing separate legal challenges to the clawbacks, people familiar with the situation have said earlier.
Credit Suisse plans to merge its investment-banking arm with rainmaker Michael Klein’s advisory boutique. The combination is supposed to form a First Boston unit that will eventually be spun out. Apollo Global Management Inc., former Barclays Plc Chief Executive Bob Diamond’s Atlas Merchant Capital and Saudi Arabian Crown Prince Mohammed bin Salman are among investors that have weighed putting money in, Bloomberg has reported.
Staff inside Credit Suisse’s investment-banking arm have long been contending with uncertainty amid the Zurich-based lender’s plans to merge those operations with Klein’s advisory firm.
The lender said in October it received a commitment for a $500 million injection into the business, but has yet to identify that investor. The Swiss bank has said it would bring other investors into Credit Suisse First Boston and lower its holding over time.
Credit Suisse, seeking to move away from years of losses and scandals, has said it would carve out its dealmaking businesses under the storied First Boston brand and tapped Klein to try to return them to their former glory. Credit Suisse First Boston is set to be a partnership, giving senior employees some ownership.
The bank is due to report its fourth-quarter results on Thursday.
–With assistance from Ambereen Choudhury.
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