Retaining talent is the most difficult part for any organisation and keeping good employees requires companies to understand their workforce needs with a futuristic approach….
Credit Suisse Ready to Splash More Cash to Lure Best Bankers and Retain Star RecruitsManagement NEWS RECRUIT RETAIN July 7, 2016
Credit Suisse’s readiness to splash cash and award employees over and above salaries, has trebled the Swiss Bank’s annual bonuses last year to 222 million Swiss francs ($228 million). The main intent behind this move is to lure best banking talent from the competitors and dissuade valued employees from quitting the organisation.
This sudden increase in awards reflects a change in management and new compensation philosophy, under the directives issued by boss, Tidjane Thiam, who joined the company a year ago. Thiam is said to have received 14.3 million Swiss francs in lieu of unvested shares in his previous employer, Prudential, Business Recorder reports.
Thiam’s decision to increase the proportion of bonuses paid as upfront cash, rather than deferred awards is his understandable motivation to gain better control on the bank’s costs because of attrition. Many new executives received smaller awards, which is too much in bonuses and special payment for executives in a year, than anything special that the financial institution managed to accomplish.
These special perks and added benefits were provided to 925 staffers, up from 216 the year before. Even if these new bonuses were offered to the new recruits, shareholders need some amount of convincing to understand this talent retention and recruitment strategy opted by the Bank, which is but too sweet to ingest.
Looking at the figures from last year, the Bank experienced a loss of 2.9 million Swiss francs and managed an adjusted return on regulatory capital this year of 2.3 percent. This is far below the cost of equity that’s probably more than 10 percent.
Until Credit Suisse’s bottom line improves meaningfully investors are suppose to expect a pay drop.
While the total pay awarded per employee was down by 6 percent year-over-year in 2015, Thiam is clearly out of favour from investors after botching the Swiss Bank restructuring. This special pay rewards to staffers might help him win some confidence from the investors.
According to earlier press release issued by the Bank, it stated, “The Staff Council and the employer representatives of Credit Suisse Group in Switzerland have concluded the salary negotiations for 2016. The social partners have agreed on an increase in the total salary amount in accordance with the Agreement on Conditions of Employment for Bank Staff (ACEBS) of 0.75% for individual and performance-based salary increases for 2016.”
Image credit: brecorder.com
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