Credit Suisse markets MDs fear bonus apocalypse
Bonuses at Credit Suisse this year are going to be bad this year whatever your role. But if you have the peculiar misfortune to be a senior person in the Swiss bank's global markets business, 2023 bonuses could take excruciating to a whole new level.
Speaking earlier this week, Credit Suisse chairman Axel Lehmann said that Credit Suisse people "have realistic expectations that it will not look great" for bonuses after a "horrifying year." His comments came after a report last week that the bank was contemplating a 50% cut to this year's bonus pool which, following cuts in previous years, would leave bonuses at Credit Suisse down around two thirds on 2021. In a further tweak/complication, Credit Suisse is also paying a portion of bonuses for anyone earning over $250k in cash that can be reclaimed if employees leave within three years.
Some people, however, may be lucky to get anything at all. Managing directors in Credit Suisse's global markets business are allegedly having their expectations talked down to zero, as are those in the non-core bank. Insiders say only markets MDs on guarantees at the bank are hopeful of receiving anything at all.
Credit Suisse isn't commenting on the bonus prognostication for its senior salespeople and traders. The double danger is that not only will bonuses be zeroed, but that previous years' deferrals will be clawed back, as happened last year. Credit Suisse's investment bank made a loss of CHF1.7bn in the 12 months to September, which is sufficient to trigger a clawback under the terms of the bank's bonus awards. If the loss hits CHF2bn, clawbacks of 30-45% are implemented.
As we've reported, many of Credit Suisse's senior credit traders and salespeople have left already, including - most recently - the former head of high yield, Karen Miles. However, the bank still retains some markets MDs who are big profit generators, including Raj Raithatha, the former head of EMEA credit repo.
One headhunter said most Credit Suisse MDs are looking for roles elsewhere. "It's kind of a no-brainer," he reflected.
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