ZURICH (Reuters) -Credit Suisse is boosting payouts to senior bankers, according to a memo seen by Reuters, as it tries to retain top performers after a year of scandals saw its shares lose more than a quarter of their value.
The bank, which has been hit by a string of scandals and losses, is increasing the cash portion of short term bonuses senior staff receive and reducing the amount they get in shares which vest after one year.
Longer term bonuses, which are paid in shares and vest after three years, will remain the same portion of the overall payout.
The changes apply to staff who earn more than $250,000, the bank said in a memo seen by Reuters and confirmed by the company.
“For Managing Directors and Directors, this change is intended to rebalance the amount of immediate cash that is paid compared to prior years,” executive managers told employees in the memo, adding conditions would be attached.
Those receiving upfront cash would have to repay part of it if they left the bank within three years.
Credit Suisse racked up a multi-billion dollar loss in 2021 on the default of a single investment banking client, while its asset management was hit by the collapse of $10 billion in funds linked to insolvent supply chain finance firm Greensill.
It has been trying to turn the page on a slew of negative headlines and reform its risk management culture, an effort set back by the abrupt departure this month of the chairman brought in just nine months earlier to lead that transformation.
On Tuesday, it warned it report a fourth-quarter loss based on fresh legal costs and a slowdown in its trading and wealth management divisions.
Its shares have slid nearly 30% in the past year.
Across the financial industry, banker pay jumped in 2021 due to a bumper year for trading and dealmaking, while firms are also finding it increasingly tough to find and retain top performers. On Thursday, Deutsche Bank said compensation at its investment bank rose 30% in the fourth quarter of last year.
Goldman Sachs, meanwhile, increased its bonus pool by as much as 50%, sources told Reuters last week, while JPMorgan has raised its by up to 40%.
With its new incentives scheme, Credit Suisse told employees it aimed to reinforce a culture “based on personal accountability and responsibility” that would better align compensation with “positive behaviors”.
“With regards to executive compensation, Credit Suisse aims to strike an appropriate balance with the interests of shareholders and wider stakeholders,” the bank said in a statement.
(Reporting by Brenna Hughes Neghaiwi, Oliver Hirt and John Revill; editing by Jason Neely and Tomasz Janowski)