Morning Coffee Jan 11 2011

Credit Suisse Bonus Changes Exceed Requirements

By julie steinberg

Credit Suisse has made changes to its 2010 bonus plan that go above and beyond what is required by U.S. regulations for bonuses to finance pros.

U.S. regulations mandate that only risk-takers -- like a trader or loan officer -- have to defer a bonus for an amount of time proportional to the risk involved, according to Peter Miterko, managing director at Pearl Meyer & Partners, an executive compensation consulting firm. CS's new rules defer bonuses for all employees who get roughly a $50,000 bonus, regardless of what they do at the bank.

Employees used to have to get roughly $130,000 in bonuses in order to qualify for the mandatory deferral. The decreased threshold means 50% more employees will have their compensation deferred for the 2010 cycle than last year.

For employees below the rank of director, 100% of deferred comp will be granted in shares that vest over four years. For those who do get cash bonuses, they'll be paid out over four years and will be linked to the firm's return-on-equity from 2011 to 2014. The new measures also allow the bank to claw back bonuses if an employee's actions hurt the bank. See the original statement here.

Finance Jobs Vanish (FINS)

The number of workers at banks and underwriters dropped by 262,000 over the past year, according to the Bureau of Labor Statistics. Unemployment in finance hasn't risen accordingly. Some people are leaving the ranks of finance entirely. But why?

Bringing on Talent (Fort Worth Star-Telegram)

USAA is planning to hire 200 financial advisors by 2012 for its new center in Addison, Texas. Don't bother applying unless you've got your Series 7, though.

Weak Bonuses (Fox Business News)

Are you at JPMorgan and excitedly counting how many Verizon iPhones you'll buy with your bonus this year? Not so fast. Charlie Gasparino predicts that bonuses will be down in the investment banking business at JPMorgan. The firm is expected to announce bonuses the week of January 17. JPMorgan did not return a request for comment.

Losing Steam (Bloomberg)

Finance firms in the U.K. will slash 45,000 jobs over the next six months, said a British business lobby. The projections follow a gloomy end to 2010: In the final three months of last year, banks and insurers cut 30,000 jobs.

Venture Capital Misadventures (Financial News)

The number of active VC firms has decreased by more than 300 in Europe and 200 in the U.S. since 2008. That decline has meant a steep drop-off in the number of employed VC professionals.

Bank Reforms (MarketWatch)

Credit Suisse may be emphasizing the need for deferred bonuses, but what are the other banks doing? Some are content to simply decrease the size of the bonus and increase the size of the base salary.

Goodbye to All That (FT)

What do you do when you're a prop trader and recent legislation writes you out of a job? Start a hedge fund, of course. The last big prop trading team at Goldman is launching its own fund in Q2.

Filing for Bankruptcy (Deal Journal)

New data show that financial or bank companies comprised nine of the 10 largest public bankruptcies last year.

List of the Day: Growing Ambition

Suffice it to say that in this job market, candidates who don't have drive won't get very far. You'll need to tap your reserves of ambition to impress a would-be employer. Here are some myths about the quality you can shatter right away.

1. Ambition and family are mutually exclusive.

2. Ambition is a static quality.

3. Nice people just aren't ambitious.

(Source: Aol Jobs)

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