Swiss hit

10 January 2011 By Antony Currie Follow @AntonyMCurrie

The Swiss group that paid its investment bankers with toxic assets has more tricks up its sleeve. It s now deferring more pay, setting stringent clawbacks and abolishing leveraged stock awards. That keeps banks still pussyfooting around with bonuses playing catch up.

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Credit Suisse announced a new compensation structure on Jan. 10. The bank has lowered the threshold above which staff will have a portion of their bonus deferred to 50,000 Swiss francs; previously it was 125,000 Swiss francs. The change will increase by about half the number of staff having some of their bonus withheld. Affected employees will have at least 35 percent of their bonus deferred. Those granted more than 250,000 Swiss francs will have 50 percent deferred, and those awarded more than around 750,000 Swiss francs will have 70 percent deferred.

Employees who are directors or managing directors will receive half their deferred bonus in stock and half in deferred cash, both of which vest over four years. The bank has removed all leverage triggers from stockbased compensation that enabled staff to earn multiples of their stock grants if certain triggers were met. The cash portion of deferred payments will be linked to the return on equity of both the overall bank and the recipient's business unit. Also, some or all of the deferred cash bonus will be clawed back if a business unit loses money in any given year.

Employees below director level will receive all deferred compensation in shares.

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