Credit Suisse trader said to quit to avoid bonus clawback
As we've already noted here, Credit Suisse bonuses are being announced this week. In normal circumstances, this might be expected to encourage people to hang around until they hit their bank accounts. At Credit Suisse, however, people have reason to move on.
Credit Suisse insiders say at director level and above, there's a scramble to leave the Swiss bank before bonuses are announced in order to avoid the bank's bonus clawbacks. The clawbacks apply to anyone receiving more than $250k in total compensation and stipulate that the significant proportion of upfront cash must be repaid plus income tax if recipients leave within three years.
In the worst case situation, individuals who resign at Credit Suisse after their bonus has been announced but before the bonus is actually paid may have to pay back income tax levied on the bonus, even though it hasn't been received. They will then need to reclaim the tax back from the national tax authority at a later date.
This might be why, with one day to go, sources say one of Credit Suisse's last remaining high yield traders has quit. Gajern Kailavasan, who joined from January in 2021 is understood to have handed in his resignation. Kailavasan didn't respond to a request to comment; Credit Suisse declined to comment.
It's not clear where Kailavasan is going next, although there were reports last year that he was joining JPMorgan. Another possible destination is Deutsche Bank, which has hired numerous members of Credit Suisse's team, including Diego Discepoli, the head of its global credit products business in EMEA. Karen Miles, the Swiss bank's head of high yield trading, with whom Kailavasan was close, also quit before Christmas. The Swiss bank is now thought to have one remaining high yield trader in London in the form of Fabian Berg, who joined from Morgan Stanley in 2019.
Kailavasan isn't the only trader moving on today. Mathieu Recayte, a Nomura FX options trader has also revealed that he's joining Eisler Capital as a portfolio manager. Nomura doesn't pay bonuses until April and Eisler is hiring as it builds a multistrategy platform.
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