UBS Intensifies Cash Clawback From Credit Suisse Defectors

Deferred awards are typically given in restricted shares that the bank can just cancel. But to retain talent amid multiple restructurings and a slumping stock price, Credit Suisse handed out cash with a clause requiring employees to repay some of the bonus if they left the firm within three years.

The Swiss bank stumbled through several money-losing quarters before collapsing and being bought by its Zurich rival earlier this year.

For many bankers that defect to rivals, hiring firms provide a signing bonus that covers rewards that are lost or must be repaid. But such deals aren’t universal, particularly if bankers move to a new industry. More than 15% of Credit Suisse’s staff voluntarily left the bank last year.

UBS scooped up its rival for, by one measure, 5 cents on the dollar, leading to an unprecedented $29 billion quarterly pretax profit. The firm’s shares are up almost 50% since it struck the deal.

Still, the bank has warned that the integration will be long and complex, and has flagged several billion dollars in costs to resolve ongoing Credit Suisse legal liabilities.

(Credit: Bloomberg)