This is how the CS bonus system works

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The federal government stepped in on Tuesday evening and temporarily banned Credit Suisse (CS) from paying a portion of bonuses to its executives. The times when CS paid the highest jackpots in the Swiss banking center are long gone: there are one billion francs in the CS jackpot pot for 2022. That’s half of last year. Still: with 50,000 CS employees, there is an average bonus of CHF 20,000 per person.

For comparison: UBS gave its employees the equivalent of three billion Swiss francs bonuses last year. However, UBS also employs significantly more than CS at 74,000 worldwide. What is much more important, however, is that UBS posted a record profit of CHF 7.6 billion last year compared to a loss of CHF 7.3 billion in CS.

The CS management under CEO Ulrich Körner (60) will not receive any bonuses for 2022 due to the lousy numbers. However, top managers do not starve: as can be seen from the CS annual report, the regular salary of the entire management team was 32 million francs.

Bonus height is a taboo subject

With the exception of the 17,000 employees in Switzerland, most of the other non-executive CS employees received their bonuses last year. You should receive the bonus payment by the end of this week.

The bank’s willingness to pay more bonuses despite billions in losses and an urgent takeover has been increasingly criticized. All employees are entitled to a bonus, from the Career Starter (a computer science graduate program for young college graduates) to the CEO. Who gets how much bonus depends on the job, position and individual performance. Areas that contribute more to the bank’s sales often have larger jackpot pots. For example, bankers get more than HR workers.

Bonus pots are distributed to their teams by the responsible managers. It’s not clear whether the episode is fair or not, several CS employees criticize in their conversations with Blick. The fact that bonuses are a taboo subject within the bank also contributes to this. Almost no one talks about how much they get.

One to two monthly fees

In the past, individual high-ranking employees could count on bonuses in the millions: According to the financial portal “The Onliner”, the 1,400 employees, most of them general managers, are seen as risk takers with great responsibility and especially fundraisers. prince bonuses every year.

For most CS employees, the astronomically high bonuses are a long way off. Ordinary employees are more likely to expect bonuses as much as one to two months’ wages. That’s a nice addition: According to the Federal Statistics Office, the gross median wage in the banking industry is CHF 10,000 per month – CHF 4,000 more than in the private sector as a whole.

Marcel Rohner, 58, President of the Swiss Bankers Association and thus Switzerland’s largest banker, argues that it would be wrong to demand that their bonuses be revoked: “There are thousands of employees who are doing an excellent job.” It would be unfair to punish them for their boss’ mistakes, the debate continues.

False incentives

According to the CS Compensation Report, bonuses are intended to, among other things, reward “outstanding performance”, “attract and retain employees”, “encourage teamwork and collaboration” and “encourage effective risk management practices”. On the other hand, internal sources say that bonuses sometimes have the opposite effect: Some employees focus on individual bonus-related areas of their job and let others that have no impact on bonuses slip through.

In addition, many bank employees do not see the bonus as a variable salary component – they relied on it. This year especially shows that he can take his revenge. A smaller jackpot doesn’t mean everyone will get a deeper jackpot. But at the same time, more bankers than ever are going empty-handed: Blick knows that this year even high-ranking CS employees holding the title of (Managing) Director will not receive any bonuses.

Source :Blick