Compensation Cut for Seniors at Credit Suisse Group AG
Credit Suisse Group AG (NYSE:CS), the second-largest bank in Switzerland, told senior investment bankers that compensation this year would be an average of 30 percent lower than last year. For a few bankers, mostly in Asia, it will only drop about 20 percent.
Securities firms are restricting payments for investment bankers while the European sovereign debt crisis decreases revenue from deal making. Even greater regulation limits have been put on the profitability of fixed-income trading. Morgan Stanley (NYSE:MS) is also cutting pay for senior investment bankers and traders 20-30 percent.
The bank also plans to pay a portion of senior employees’ 2011 bonuses in bonds backed by derivatives. In 2008, during U.S. financial crisis, they gave employees shares in a $5.05 billion pool of junk-grade corporate loans and bonds backed by commercial mortgages. “We are trying to strike the right balance and align employees with shareholders,” Chief Executive Officer Brady Dougan said.
Here’s how these banks are trading now:
Credit Suisse Group (NYSE:CS): CS shares recently traded at $26.60, down $0.11, or 0.41%. They have traded in a 52-week range of $22.23 to $47.63. Volume today was 128,680 shares versus a 3-month average volume of 2,523,480 shares. The company’s trailing P/E is 9.65, while trailing earnings are $2.76 per share.
Morgan Stanley (NYSE:MS): MS shares recently traded at $18.15,. They have traded in a 52-week range of $11.58 to $31.04. Volume today was 1,582,640 shares versus a 3-month average volume of 30,941,500 shares. The company’s trailing P/E is 14.76, while trailing earnings are $1.23 per share.