The new compensation structure, which will more closely link pay to the performance of credit markets while reducing the bank’s exposure to the securities, comes amid rising public and political pressure on bankers’ inflated bonuses, which have been widely accused of fostering reckless short-term risk taking.
Under the new system, any mark-to-market gains or losses on the fund’s assets can be offset by corresponding losses or gains on the banks’ liabilities to employees, meaning Credit Suisse will be able to avoid making further write-downs on these securities which would negatively impact its capital base.