(Please note that the headline above is from the WSJ print edition–KSH).
Credit Suisse Group’s novel plan to pay bankers with a brew of its own toxic bonds and corporate loans has gotten off to an unexpectedly strong start, which could put further political pressure on other Wall Street firms to change how they pay their employees.
Late Wednesday, the bank told 2,000 of its top bankers that a $5 billion fund of soured mortgages and bonds — which it granted as a big portion of 2008 pay — had returned 17% since January, according to people familiar with the matter.
The returns registered well below the 75% increase in Credit Suisse shares over the same period, and the 30% uptick in the benchmark Merrill Lynch high-yield bond index. But the fund still outperformed major stock indices, as well as initial expectations of bankers inside and outside the Swiss bank. Many were originally skeptical of the plan, with one decrying what he called the “eat your own cooking” plan as unfair to employees who didn’t contribute to the bank’s 2008 net loss.