If you work for Credit Suisse and were hoping to fly beneath the regulatory radar, it's a day of bad news. The number of Credit Suisse employees defined as 'code staff' has swelled by nearly 300 people after the bank decided to give all UK managing directors the designation.
In total, Credit Suisse, which unveiled its 2014 annual report today, now has 801 ‘material risk takers and controllers’, or regulated employees (code staff included). These employees had 83% of their total compensation deferred this year.
The bank made a slight dig at the regulatory intervention over pay by saying that it may have an “adverse impact on our ability to retain certain of our most highly skilled employees and hire new qualified employees”, particularly those falling under the CRD IV bonus cap.
Credit Suisse paid its regulated employees an average of CHF2.05m in 2014, down from CHF2.6m in 2013 when UK managing directors were not included in the group. Of the CHF1.6bn put aside for these employees, CHF492m was paid in salaries and CHF191m in unrestricted cash bonuses. The remainder was paid in deferred share awards, performance share awards and the bank’s contingent capital awards.
Like most investment banks last year, Credit Suisse said it introduced ‘fixed allowances’ for its staff in addition to salaries and bonus payments. All code staff have these allowances as part of their compensation structure, but some of this is a share award that vests over three years and is dependent on continued employment.
Here are some other facts about Credit Suisse’s compensation:
1. Credit Suisse’s cash cap is unusually generous
Credit Suisse employees receive all bonuses in cash up to CHF250k. Beyond that, bonuses begin to be deferred. This compares well with its European rivals – Deutsche Bank, for instance, caps cash payments at €100k. When salaries are included, Credit Suisse’s compensation cash cap is a hefty CHF2m, or $2m on a local currency basis.
2. The number of people receiving more than CHF250k has grown
There were 7,583 people who were required to defer some of the bonus at Credit Suisse this year, implying they were paid more than CHF250k. Last year, the comparable figure was 7,563.
3. Credit Suisse is still paying guaranteed bonuses
Nine material risk takers and 129 other employees received guaranteed bonuses this year. This is down slightly from the 141 people who received them in 2013.
4. And it’s now less generous with sign on bonuses
Credit paid CHF13m in sign on bonuses to 102 people last year. This is an average of CHF127.4k. Last year it paid 83 people an average of CHF216k.
5. But redundancy payments are pretty consistent
Credit Suisse fired 1,552 people across the organisation in 2014. This is a decrease from the 2,189 people let go in 2013, but severance payments were largely the same. On a per head basis, it paid CHF121.7k in 2014, down from CHF120k in 2013.
6. Credit Suisse has continued to pay ‘contingent capital awards’ (CCA), but it’s a comparatively negligible sum
CCA’s are bonds that could be written down to zero if Credit Suisse’s tier one capital falls below 7%. CCA bonds are only offered to senior staff, but thousands of people qualify for these awards. Last year, Credit Suisse paid 5,891 people CHF360m under ‘fair value’ awards, or a ‘mere’ CHF61k each.