Credit Suisse has buckled. Bloomberg reported today that the Swiss bank has been approaching a 'select group' of rainmakers and offering them inducements to stay following various senior exits in recent weeks.
The identity of the bonus recipients is top secret, even within Credit Suisse. One of the bankers who's been told he's receiving the extra bonus said official letters with the terms of the payment are being issued soon. For the moment, he said he's been verbally informed that he will receive a bonus in July 2021 that will match the bonus he received at the start of this year for 2020, but that it will be paid entirely in Credit Suisse stock.
The additional payment means that some people at Credit Suisse will effectively have their bonuses doubled this year. "It's uncertain how big the bonus pool in 2022 will be, but this gives a floor and means we will at least receive something for 2021," says the banker.
Credit Suisse isn't commenting on the retention packages. The Swiss bank employed 1,428 material risk takers and controllers in 2020, earning an average of CHF1.2m ($1.3m) each. It's thought that only a small proportion of them will receive the July payment.
The danger for Credit Suisse is that its generosity to a few will backfire for the rest. If you're not getting the retention bonus, the implication is that you are dispensable. Given the comparatively poor prognosis for 2021's payments, this might even drive more people to leave. "We've been told this must be totally confidential," says the banker. "Employees who are key to the franchise have been ranked and assessed, with consideration all paid to the risk that they could be poached by the competition."
Another Credit Suisse MD said he'd heard nothing at all. "I'd be surprised if we're paying retention packages yet," he says.
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