Deferred awards are usually given in restricted shares that the financial institution can simply cancel. However to retain expertise amid a number of restructurings and a slumping inventory value, Credit score Suisse handed out money with a clause requiring workers to repay a number of the bonus in the event that they left the agency inside three years.
The Swiss financial institution stumbled by means of a number of money-losing quarters earlier than collapsing and being purchased by its Zurich rival earlier this 12 months.
For a lot of bankers that defect to rivals, hiring companies present a signing bonus that covers rewards which can be misplaced or should be repaid. However such offers aren’t common, significantly if bankers transfer to a brand new trade. Greater than 15% of Credit score Suisse’s workers voluntarily left the financial institution final 12 months.
UBS scooped up its rival for, by one measure, 5 cents on the greenback, resulting in an unprecedented $29 billion quarterly pretax revenue. The agency’s shares are up nearly 50% because it struck the deal.
Nonetheless, the financial institution has warned that the mixing might be lengthy and complicated, and has flagged a number of billion {dollars} in prices to resolve ongoing Credit score Suisse authorized liabilities.
(Credit score: Bloomberg)