Credit Suisse bankers who want to quit face a clawback problem
Credit Suisse’s APAC operation has become a poaching ground for rivals looking to plug gaps in their corporate finance operations.
Christopher Chua, the bank’s Hong Kong-based deputy head of mergers and acquisitions has resigned to join HSBC, and headhunters warn that others could follow in the run-up to the bank’s new strategy announcement on October 27.
Credit Suisse’s CEO Ulrich Korner is expected to shrink or close parts of the investment bank, and some staff are deciding to head for the exit now and grab a good opportunity elsewhere rather than wait.
But senior bankers who decide to leave before year-end will have to pay back any unexpired portion of restricted upfront cash awards (UCAs), which were paid last year to retain managing directors or directors earning $250k or more.
There is also talk of guarantees and retention bonuses being paid to bankers within the investment banking and capital markets division to persuade them to stay after the strategy revamp. “These can also be clawed back, so it’s best to leave now rather than get locked in for another year,” said one headhunter in Hong Kong familiar with the plan. “There are a lot of unhappy people at Credit Suisse in Hong Kong right now.”
Credit Suisse is set to shrink its investment banking business as part of a strategy overhaul that could lead to thousands of job losses. But junior bankers who have just joined the firm also face a conundrum if they choose to look for alternative employment. “Analysts should complete their initial training programme or else they risk losing their chance to move into private equity,” the headhunter said. Analysts often receive offers from private equity firms within months of joining a bank on the condition they complete two years at the bank.
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