The employees of Credit Suisse are planning to sue the Swiss financial regulator for cancelling their bonuses worth more than $400 million.
Many senior managers from Credit Suisse group have reportedly approached law firms to initiate legal action on their behalf.
Early this month, Credit Suisse Group had notified its staff that the delayed bonuses meant to replicate the value of bonds that were eliminated in the company’s urgent sale to UBS Group AG will also be reduced to zero.
Over the past few years, many managing directors and directors at Credit Suisse have been given some portion of their bonus in the form of contingent capital units. About two years ago, this practice became applicable to more than 5,000 members of the workforce too.
With this new decision, however, the contingent capital awards valued about $403 million by end of 2022 also came to be done away with. This only makes the financial difficulties of senior bankers go from bad to worse. After all, the value of their shares has already dropped and some of their bonuses have become null and void due to government regulations.
Not long ago, the Swiss government ruled that the executive board of Credit Suisse and the senior managers next in rank, would see their balance bonuses being revoked or reduced by up to 50 per cent. This was over and above the loss in value of employee awards of more than two billion Swiss francs resulting from the decline in stocks.