Credit Suisse's clawbacks are stopping rivals poaching people
A handful of Credit Suisse people may be leaving, but headhunters say far more of them would be fleeing the Swiss megalith were it not for one thing: the bonus clawbacks imposed by the Swiss bank on anyone receiving more than $250k in total compensation.
First introduced in the 2021 bonus round, Credit Suisse's clawbacks were rolled out again in 2022. Under the terms of the awards, bonuses are paid in cash, but this cash is repayable (plus income tax) if recipients resign from Credit Suisse within the ensuing three-year period. The payments amortize on a monthly basis - at the end of the period, people leaving only pay back 1/36th of the total.
The problem for Credit Suisse employees who only recently received 2022's bonuses in the form of cash that can be clawed back is that they now face having to pay back almost the entire amount, plus income tax. The arrangement means that many of Credit Suisse's higher earners are effectively stuck at the bank unless they can persuade another firm to buy out all the cash. In the circumstances, being laid off may be a good option: Credit Suisse previously allowed people who were let go or who retired to escape the clawback altogether.
One London headhunter says that while rival firms are frantically interviewing all the Credit Suisse people, the clawbacks are dissuading many from actually recruiting them. "It's not clear whether the clawbacks will be invoked if people are let go, so it may make sense for other firms to wait and then pounce," he says.
Credit Suisse people, meanwhile, are stuck - unless they can persuade rival banks to compensate them for the clawed back bonuses and the income tax payments. This is presumably what happened when Citi hired Greg Dalle, Maarten Swart and Sophie van Kleef recently.
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