The Swiss bank, UBS, is intensifying its efforts to reclaim millions of bonus payments that were made to senior executives at Credit Suisse before its collapse. UBS has contacted hundreds of bankers from the acquired Credit Suisse and offered them multi-year payout plans to recover a portion of the 1.2 billion Swiss francs in tied-up cash bonuses, referred to internally as “Upfront Cash Awards.”
According to informed sources and documents seen by Bloomberg, UBS is seeking to reclaim an amount of less than 651 million Swiss francs. The bank’s lawyers have reportedly contacted former employees who left Credit Suisse independently and threatened legal action if the requested sums are not paid.
While it is common practice to reclaim bonuses when an employee leaves the bank, known as a “clawback,” the extent and structure of the situation at Credit Suisse are remarkable. The bank granted thousands of senior executives, including managing directors and directors, bonuses that were subject to conditions in early 2022 and this year.
This program, which was extended again in 2023, was intended to cushion the shock of a shrinking bonus pool due to Credit Suisse’s financial difficulties. However, following the decline of Credit Suisse and its subsequent acquisition by UBS, there was a massive exodus of employees.
Typically, deferred bonuses are granted in the form of restricted stock that the bank can simply cancel. To retain talent despite multiple restructurings and a declining stock price, Credit Suisse paid cash bonuses with a clause requiring employees to repay a portion of the bonus if they left the bank within three years.
Many bankers who switch to competitors are offered hiring bonuses by their new employers to cover the lost or repayable bonuses. However, such agreements are not generally common, especially when bankers switch to a different industry.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇨🇠|
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | UBS, Credit Suisse, Bloomberg |
| Currencies | Swiss Franc |
| Securities | None |
