Credit Suisse Said to Lift Salary, Chop Allowance for Some StaffBy
Bank said to have informed senior U.K. bankers last quarter
Other lenders have made similar moves in response to EU rules
Credit Suisse Group AG changed the structure of compensation for some of its senior London bankers, increasing fixed pay while eliminating the so-called allowances that have come under regulatory scrutiny, people familiar with the plan said.
Affected employees were informed of the move last quarter, the people said, asking not to be identified as the details are private. Total pay hasn’t been decided for this year, and the bank will continue to use role-based allowances where needed for other staff, the people said.
European regulators drew a clear line between salaries and variable pay in final rules released in December, pledging to closely examine cash allowances to avoid circumvention of a rule that caps bonuses at twice fixed pay. Dozens of the region’s lenders have counted allowances as fixed pay in recent years, while the European Banking Authority said in most cases they should be classified as variable.
A Credit Suisse spokesman declined to comment on the move.
U.K. banks including Standard Chartered Plc have already eliminated allowances and are paying higher salaries to comply with the bonus cap.
The U.K.’s referendum vote to exit the EU last month is likely to throw total compensation at investment banks in London into disarray this year, with bonuses expected to be down a quarter, according to recruiters and executives. The share prices of several European banks are down more than one-third this year, including Barclays Plc, Deutsche Bank AG and Credit Suisse. That’s heightened the pain felt by senior bankers who get a large portion of their pay in deferred stock.
Separately, Jim Amine, Credit Suisse’s investment banking and capital markets head, told some U.K. managing directors in an internal meeting this month that the Swiss firm will be hiring for his division after strong performance, the people said. The firm has landed recent deal mandates such as advising on a merger of Abu Dhabi’s two largest banks. Chief Financial Officer David Mathers and global-markets chief Tim O’Hara also made presentations at the briefing, the people said.