Swiss wealth manager cancels bonuses

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Zurich-based asset manager GAM is doing what Credit Suisse hasn’t done for years: GAM is canceling bonuses for its employees because of crappy business. The asset manager announced this internally last week, as Bloomberg reported, citing inside sources.

GAM has been grappling with problems for years. 42.5 million Swiss francs were lost last year alone. It was the fifth consecutive crimson annual result. According to GAM, it still manages assets of 71.7 billion francs today – up from 99 billion francs at the end of 2021.

There are exceptions

The number of employees fell from 701 to 541 in two years. However, personnel costs continue to burn a hole in the GAM budget, especially variable wages. GAM spent 22 million on bonuses last year. In fact, it was 38 million the previous year. Thus, the variable fee accounts for up to a quarter of all wage costs.

Now that work is done, the wage variable has been deleted. According to Bloomberg, this has caused “definite frustration” among employees. The fact that GAM isn’t completely eliminating all bonuses should also contribute to this: key portfolio managers continue to collect bonuses, apparently to keep bonuses from jumping out.

GAM wants to prepare for an upcoming takeover with bonus cuts: GAM decided to accept British Liontrust’s takeover offer earlier in the month.

Source :Blick