Credit Suisse Group AG’s Michael Klein, appointed to run the spinout of the lender’s First Boston investment-banking unit, told a town hall meeting that everyone there would be shareholders in the new venture.
(Bloomberg) — Credit Suisse Group AG’s Michael Klein, appointed to run the spinout of the lender’s First Boston investment-banking unit, told a town hall meeting that everyone there would be shareholders in the new venture.
Trying to rally the staff to support the planned overhaul, Klein pledged that the new “super boutique” will be profitable, and said that should mean this year’s bad bonus round won’t happen again.
At the town hall Wednesday, Klein said the new venture will be owned and operated by everyone in the room, according to people who attended the meeting. He said Credit Suisse First Boston already has lined up investors, though he didn’t name them, the people said, asking not to be identified discussing non-public information.
The executive stressed that his incentives are aligned with the venture’s success in part because he is set to have equity in it as a result of the sale of his firm, Klein Group.
Credit Suisse posted a fifth-straight quarterly loss earlier this month, with red ink in the fourth quarter alone totaling 1.39 billion Swiss francs ($1.5 billion). The bank also lost an unprecedented 111 billion Swiss francs worth of assets during the three final months of last year. Chief Executive Officer Ulrich Koerner’s pledge to stem the outflows hinges on a massive outreach program to woo nervous clients and their cash back to the bank, while carving out the volatile investment bank and slashing costs.
The investment-banking venture will be based in New York and will offer capital-markets and advisory services.
A company spokesperson declined to comment.
The Swiss lender is in the early stages of a restructuring that includes cutting 9,000 jobs. Earlier this month it reduced the bonus pool for 2022 by about half. Koerner said in a Bloomberg TV interview that bonuses had to be linked to profits, so in years when the bank posts a loss “we pay very little or nothing.”
–With assistance from Marion Halftermeyer and Crystal Tse.
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