Departed CEO Tidjane Thiam may have had his bonus cut at Credit Suisse last year, but for employees at the Swiss bank, the 2019 compensation round was less easy to read.
Across the bank, Credit Suisse's 2019 compensation report suggests that it kept the bonus pool stable: in 2019, Credit Suisse paid out CHF3.1bn ($3.2bn) in bonuses, the same amount as it paid in 2018.
However, last year a slightly higher proportion of Credit Suisse's bonus pool (34%) went to material risk takers and controllers than in 2018 (30%).
Credit Suisse defines material risk takers (MRTs) as members of the executive board, employees who can put the bank's capital at risk, its top-paid 150 employees, and individuals whose jobs might have an impact on the reputational, market and operational risk of the group as identified by regulators. Last year, there were 1,398 of them, up from 1,003 the year before. - The increase was due to the recategorisation of senior relationship managers in bank's wealth management-related businesses in the material risk taking category.
The average of Credit Suisse's material risk takers plus control staff (MRTC) earned a salary of CHF697k last year and a bonus of CHF1.1m. This compared to an average salary and bonus of CHF573k and CHF1m respectively one year earlier. However, rather reflecting a change in the composition of compensation it's likely that Credit Suisse's wealth managers are simply paid higher salaries and lower bonuses than the other MRTCs.
Credit Suisse bonus deferrals and performance hurdles
Away from the top line numbers, Credit Suisse has a few punitive elements to its pay structure.
It still pays cash bonuses up to CHF(US$)250k. - Beyond that, deferrals kick-in. At UBS, you can earn up to CHF300k in cash before your bonus gets deferred.
If Credit Suisse makes a loss of more than CHF1bn, deferred bonuses start to be reduced. If the loss is more than CHF6.7bn, they're reduced to nothing at all.
Lastly, Credit Suisse's deferred bonuses usually vest over three years for the average employee, five years for risk managers and seven years for senior staff. Senior staff get 'contingent capital awards' which vest entirely at the end of three, five and seven years according to their employment category.
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