Credit Suisse bankers have deferred bonuses that were already frozen
The bankers of the bank of Credit Suisse Group AG had deferred bonuses that were frozen by the Swiss government, adding pain to awards that were already decimated by the firm's share plunge.
Exit Ant Venture is owned by none of the Vanguard Said to Shutter Business in China.
The Swiss government is temporarily suspending deferred remuneration for the years up to 2022, according to a statement released Tuesday. The bank can pay cash bonuses for last year as planned after the firm s executive board gave up such awards on Monday, the statement said.
Once the deal is completed, the stock of Credit Suisse will be converted into UBS shares at a ratio of 22.48 for one.
The share fall wiped out more than 600 million from the value of deferred stock held by the firm's bankers, according to calculations by Bloomberg. A further 210 million francs of special share awards that were handed out last month would only be paid out if the share price reached 3.82 francs on December 31, 2025, which would be impossible now.
Credit Suisse staffers will be waiting to see how long the suspension lasts and the permanent status of the lender's contingent capital awards. A person familiar with the matter said that these were meant to mirror risky bonds that were wiped out in the takeover but had yet to be written down to zero before the Swiss statement landed.
The CCA awards were worth about 360 million francs $388 million at the end of 2022. One of the conditions of the awards is that the instruments have no value in the event of a collapse of the bank. The nature of the rescue – couched as a private takeover – left some wondering if it was feasible the weekend's events may not trigger this.
Spokespeople for Credit Suisse and Finma didn't want to say anything.
In the past few years, thousands of managing directors and director-level staff at Credit Suisse have received at least part of their bonus in contingent capital units. These assets mimic many of the features of the bank's 16 billion-franc stack of additional tier 1 securities, designed to give the bank more capital in times of crisis. Swiss regulator Finma wrote off the AT 1 s on Sunday to help cover the costs of the emergency tie-up with UBS.
In 2021, just over 5,000 Credit Suisse employees received contingent capital awards, of which 1,229 were classified as material risk takers, performing jobs that are most important to the bank's health.
The lender stated in its annual report that contingent capital awards carry risks similar to other contingent capital securities it issues.
Credit Suisse granted the latest tranche of contingent awards to staff on February 11. This is the last award of these instruments, which were already set to be discontinued.
Contingent awards generally vest over three years, though in some countries it is longer dependent on local rules and are denominated in dollars or Swiss francs. Holders are eligible to receive semi-annual interest payments and receive cash or a contingent capital instrument upon maturity.
The Swiss statement may snuff out already slim hopes that this slug of compensation might be unaffected, adding to a bleak outlook for the bankers already facing the threat of job cuts.
None of Foxconn finds EVs are harder to build than iPhones.