Credit Suisse to Pay 2012 Cash Bonuses With Clawback

Credit Suisse Group AG, Switzerland’s second-biggest bank, plans to pay out part of its bonuses for top staff at the investment bank in cash that can be clawed back over the next three years.

The compensation, called cash retention awards, will be given to directors and managing directors in the investment bank, the Zurich-based company informed employees in an internal memo this week. A Credit Suisse official confirmed details of the awards.

Credit Suisse used similar instruments to pay parts of bonuses of top investment bankers for 2008 and 2010, according to the company’s annual reports. Employees will also be eligible for deferred stock awards, some of which can be clawed back, and an asset-based instrument called Plus Bond as part of their 2012 variable compensation, according to the bank.

Cash retention awards will be paid out in full this year and can be reclaimed if, for example, an employee leaves the company or engages in detrimental conduct. The company can reclaim the full amount of the awards, reduced by 1/36 for every completed month from the date of the grant to the event triggering repayment, according to the memo.

Plus Bond awards are based on a trading portfolio of structured product securities, have a maturity of 3 1/2 years and will pay an annual coupon, according to Credit Suisse. While the instrument will make up part of bonuses for the top investment bankers, other employees can elect to receive it as well instead of share awards.