Credit Suisse didn't have to be nice to its people last year. As today's 2018 remuneration report from the Swiss bank makes clear, 2018 wasn't a great year in terms of business. There was a "significant drop in client activity" in the second half, during which conditions became more "challenging." Nonetheless, the bank decided to keep its overall bonus pool stable, and its "high performing" employees received year-on-year increases in their pay.
Credit Suisse was kind, basically.
How do salaries and bonuses at Credit Suisse compare?
Credit Suisse defines material risk takers (MRTs) as members of the executive board, employees who can put the bank's capital at risk, its top-paid 150 employees, and individuals whose jobs might have an impact on the reputational, market and operational risk of the group. Last year, there were 1,030 of them (plus control staff).
The average of Credit Suisse's material risk takers plus control staff (MRTC) earned a salary of CHF(US$)555k last year and a bonus of CHF(US$)925k. This compared to an average salary and bonus of CHF540k and CHF874k respectively one year earlier.
The chart below shows how Credit Suisse's compensation compared to rival banks. As ever, comparisons are muddied by definitional variations - most banks provide pay information for material risk takers, but Credit Suisse's data is bundled in with control staff; UBS only talks about 'key risk takers.'
Either way, it looks like Credit Suisse is generous. Just not as generous as UBS.
Credit Suisse bonus deferrals and performance hurdles
Away from the top line numbers, Credit Suisse has a few punitive elements to its pay structure.
It only pays cash bonuses up to CHF(US$)250k. - Beyond that, deferrals kick-in. At UBS, you can earn up to CHF300k in cash before your bonus gets deferred.
Like at UBS, deferred bonuses only pay out in full if the bank meets a return on equity target. At UBS's investment bank specifically, the RoTE target is 8%. Across Credit Suisse as a whole it's 8.5%. If Credit Suisse makes a loss of more than CHF1bn, deferred bonuses start to be reduced. If the loss is more than CHF6.7bn, they're reduced to nothing at all.
Lastly, Credit Suisse's deferred bonuses usually vest over three years for the average employee, five years for risk managers and seven years for senior staff. Senior staff get 'contingent capital awards' which vest entirely at the end of three, five and seven years according to their employment category.
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