Credit Suisse banking MD bonuses are surprisingly OK
Credit Suisse’s long-waited bonus day for managing directors is upon us. And insiders say it's not bad at all.
“We’re flat to the street,” says one senior MD involved in the process. However, there are no additional sweeteners to tie people into CS First Boston, except for a “bit of cash upfront.”
Credit Suisse originally planned to announce bonuses for directors and managing directors on February 8, a day before announcing its annual results. However, they were delayed, giving rise to expectations that a new pay structure was being devised for senior staff.
Credit Suisse isn't commenting, but insiders now say that the delay was in fact the result of a fight between Zürich and Klein’s team, which fought to preserve the bonus pool for investment bankers despite the bank reporting a big full year loss.
The Swiss bank already re-jigged bonuses for junior investment banking staff who will receive their cash payouts in three staggered phases.
One person who is unquestionably getting well paid at Credit Suisse this year is Michael Klein, the CEO designate at CS First Boston, the 'super boutique' that will employ Credit Suisse's investment bankers and hopefully one day spin out on its own. Klein has joined Credit Suisse following the acquisition of his 40 person boutique for $175m on February 9th.
He is already is already rallying the troops. Sources say Klein was in bullish mood when he addressed staff at a town hall meeting this week. He apologised for the delay to bonuses and pledged it won’t happen again: First Boston will be profitable and all staff will share in the spoils.
Staff on the call say Klein’s performance was impressive and he invoked Goldman Sachs when laying out his vision for First Boston. Klein said that the boutique’s partnership structure could be every bit as successful as Goldman’s was before its IPO turned senior staff into multi-millionaires.
Those hoping to gain a more concrete sense of what First Boston will pay its partners will have to wait until next month, when Klein will host an off-site for the bank’s managing directors in New York.
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