The amount UBS is seeking to recover is less than 651 million Swiss francs, a source said. — Bloomberg
ZURICH: UBS Group AG has stepped up an effort to recoup hundreds of millions in cash bonuses that Credit Suisse paid to retain dealmakers before the lender’s collapse.
UBS has contacted hundreds of bankers and offered some multi-year payment plans amid efforts to claw back a chunk of the 1.2 billion Swiss francs in restricted cash bonuses, known internally as upfront cash awards, according to people familiar with the matter and documents seen by Bloomberg News.
The amount UBS is seeking to recover is less than 651 million Swiss francs, said one of the people, all of whom asked not to be identified discussing private information.
The bank’s outside law firms are reaching out to staffers who voluntarily left the firm and threatening legal action if the required amounts aren’t delivered, the documents show.
While going after contingent awards when an employee leaves – a measure known as a clawback – is common among the largest banks, the scale and the structure of Credit Suisse’s situation stands out.
The bank awarded cash bonuses with strings attached to thousands of managing directors and directors in early 2022 as well as this year in an effort to cushion the blow of a bonus pool shrinking amid the bank’s struggles. Then the bank saw a flood of departures.
Deferred awards are typically given in restricted shares that the bank can 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. — Bloomberg
