Credit Suisse, the Swiss-American financial services group, has given its top directors millions of special share units that could be worth as much as $1.79bn as part of a performance-based incentive.
The scheme, which includes senior managing directors at Credit Suisse First Boston, its investment bank, is designed to foster an ownership culture across the group.
It follows a strategic review conducted at the end of last year. This aimed to simplify the structure of Credit Suisse and encouraged greater co-operation between its divisions, including the private bank, investment bank and insurance arm, Winterthur. To qualify for payouts, staff at the investment bank will have to meet strict performance criteria and ambitious profits targets set by Brady Dougan, chief executive. The annual report makes clear that payments may not be forthcoming.
Details of the awards, first reported by Financial News in February, are contained in Credit Suisse's annual report.
The report said: 'In January 2005, as part of the 2004 compensation process, the group also granted new performance-based equity awards as retention incentive awards, which it believes better aligns the interest of its workforce with those of its shareholders. The new equity awards were granted in the form of share units.' CSFB declined to comment on its scheme.
The units convert into Credit Suisse shares after five years if the performance criteria are met.
Some 13.8 million units were granted to an unspecified number of staff and granted a fair value of Sfr51.70 a unit - potentially worth a total of Sfr714m. However, depending on performance, each unit converts to between zero and three Credit Suisse shares, meaning the maximum payout could reach $1.79bn.
Share-based compensation cost Credit Suisse €574m in 2004, the report noted.
Credit Suisse does not disclose the individual pay and bonuses of the 11 members of its board of directors. However, they shared a total of Sfr18.8m last year, with the lion's share, Sfr12m, going to one individual.