Not only did investors lose money when Credit Suisse was forced to write off the full value of its AT1 bonds, but now bonuses linked to the instruments are worth nothing as well.
Credit Suisse is said to have told employees that had bonuses linked to the bank's AT1 bonds that were written down when it was taken over by UBS are also being wiped out, according to a «Bloomberg» (behind paywall) report citing people familiar.
The contingent capital bonuses worth 360 million Swiss francs ($403 million) at the end of last year, are now also worthless as they have been written down to nothing, according to the report.
On March 19, Credit Suisse was told by Swiss financial regulator Finma to write off around $17 billion of additional tier 1 capital (AT1), as part of its forced takeover by UBS.
Bonus Pain
The cancellation of AT1 bonuses comes on the back of a decision by the Swiss government to cancel bonuses for Credit Suisse's executive board and reduce those for managers one and two levels lower by a quarter to a half, as finews.com reported.
Around one thousand Credit Suisse managers seen as bearing responsibility for its demise will see their bonuses cut by 50 to 60 million Swiss francs, with clawbacks also under discussion.
