Credit Suisse execs set for bonus payout: Report

LONDON: Nearly 300 bankers and executives at Swiss banking major Credit Suisse are poised to share an estimated 1.9 billion Swiss francs ($1.85 billion) in stock as part of performance-based retention plan, says a media report.

"About 300 Credit Suisse bankers and executives stand to share an estimated 1.9 billion Swiss francs ($1.85 billion) in stock next spring under a performance-based retention plan instituted nearly five years ago as the bank struggled to retain staff," The Financial Times has reported.

Eligible Credit Suisse managing directors and executives were paid one-fifth to one-half of the bonuses they received in early 2005 in "performance incentive plan" awards rather than in cash, it added.

The awards are due to vest in late March. As per the daily's estimates, since the bank has hit performance and share price targets, the plan participants could receive about 2.76 shares in Credit Suisse for each unit they were awarded.

"The ultimate amount paid out, if any, will not be clear until late March and will depend on the bank's earnings and share price. If Credit Suisse's average share price for the first three months of 2010 drops below 30 Swiss francs, employees will receive nothing," the daily said.

According to the report, Credit Suisse's plan incorporates many of the elements that banking compensation critics have been advocating - "long-term, share-based compensation that can be 'clawed back' for under performance".

Quoting Paul Calello who is the head of Credit Suisse's global investment bank, the daily said, "The PIP programme was ahead of its time and is very consistent with the focus on long-term risk-adjusted compensation being discussed today".

The publication noted that Credit Suisse has a history of implementing bonus payment plans that prove unpopular internally but draw external praise for their long-sightedness. "... the latest of which was its decision last year to tie bankers' bonuses to the performance of USD 5 billion in risky mortgage assets," it added.