With bonuses down big across Wall Street as the market meltdown send income statements deep into the red, a lot of investment bankers aren't going to be too pleased with their bonuses this year.
Credit Suisse is trying something a little bit different. Credit Suisse will be paying it bankers their bonuses with a combination of the usual cash and nearly impossible to trade junk bonds: the kind of garbage that banks have been trying to sell to the Treasury Department to dump the liquidity problem onto taxpayers.
I like this plan: If the bonds really are just illiquid -- and not total crap, as I'm inclined to suspect -- then the bankers will make out like bandits in a few years when credit markets stabilize and liquidity returns.
Another part of Credit Suisse's bonus program is generating some controversy: a portfolio of the cash bonuses paid out will have a "clawback" provision requiring that they be repaid if the employee leaves within two years. According (subscription required) to The Wall Street Journal, this could lead to some lawsuits
I'm not exactly sure what the problem is: As long as employees are notified of the terms of their pay package before they do the work, the banks can pay them whatever/however they want.
They should be happy to be receiving bonuses at all.
Credit Suisse is trying something a little bit different. Credit Suisse will be paying it bankers their bonuses with a combination of the usual cash and nearly impossible to trade junk bonds: the kind of garbage that banks have been trying to sell to the Treasury Department to dump the liquidity problem onto taxpayers.
I like this plan: If the bonds really are just illiquid -- and not total crap, as I'm inclined to suspect -- then the bankers will make out like bandits in a few years when credit markets stabilize and liquidity returns.
Another part of Credit Suisse's bonus program is generating some controversy: a portfolio of the cash bonuses paid out will have a "clawback" provision requiring that they be repaid if the employee leaves within two years. According (subscription required) to The Wall Street Journal, this could lead to some lawsuits
I'm not exactly sure what the problem is: As long as employees are notified of the terms of their pay package before they do the work, the banks can pay them whatever/however they want.
They should be happy to be receiving bonuses at all.
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