At Credit Suisse, a suspicion that markets MDs were squeezed to pay bankers
Now that the dust is settling on the bonuses allocated to the managing directors at Credit Suisse who will one day (hopefully) be the driving force at CS First Boston, it's becoming apparent that the MD bonus round for senior bankers wasn't nearly as painful as expected.
Although banking bonuses were definitely down at Credit Suisse's investment bank, insiders say the cut was partially mitigated by a salary increase earlier in the year and that bonuses were far more generous than implied by the 79% year-on-year drop in M&A and capital markets revenues at Credit Suisse in 2022.
The comparative generosity came after Michael Klein, the man who will one day run CS First Boston, is said to have intervened on behalf of his future employees. "Klein was renegotiating and that's why the bonuses were delayed," says one insider.
While Credit Suisse bankers had Klein batting on their behalf, the Swiss bank's markets professionals were less lucky. Their bonuses were announced on time several weeks earlier, and headhunters say many were very disappointing. "A lot of markets MDs at Credit Suisse were paid no bonus at all and the good ones were paid bonuses which were down on last year, when the bonus pool was already down a lot," says one equities headhunter. "They were also paid a lot of cash deferred over three years and payable only in October/November 2023, 2024 and 2025."
Markets MDs performed better than bankers at Credit Suisse in 2022: fixed income and equities trading revenues were down 44% and 39% relative to the 79% decline in banking. However, as Credit Suisse restructures, it looks like markets pay was sacrificed to keep bankers happy.
If this was the intention, however, Credit Suisse could have gone further. Some banking MDs are complaining that the bonuses they received last Friday were small and contained very little cash. "I’m not sure that it was about them everyone happy, but more preventing us from being apoplectic," says one.
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