At Credit Suisse, Toxic Bonuses Turn into Gold
Credit Suisse employees feast on beaten-down loans and bonds
This article is for subscribers only.
At the depths of the financial crisis, senior bankers at Credit Suisse Group received $5.05 billion of junk-grade loans and commercial-mortgage-backed bonds as part of their annual bonuses. Those assets, considered long-shot investments when they were transferred to an internal employee fund in late 2008, offered the Swiss investment bank a way to shift risk off its books—while giving the employees a chance to benefit from any recovery in that market.
It turned out to be the sweetest of deals: The assets have delivered gains of 75 percent since the end of that year through Nov. 30, people with knowledge of the results say. During that same period, Credit Suisse’s shares declined 23 percent.