CSFB Cuts Deep Into U.S. Bonuses

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CSFB Cuts Deep Into U.S. Bonuses

Derivatives staffers at Credit Suisse First Boston have reportedly been left reeling after seeing their bonus payouts being cut by as much as 80% on last year, said recruiters in New York. While most staffers were expecting pay cuts, many were not prepared for their scale, which headhunters agreed were among the worst presented by Wall Street firms so far this payout season. John Gallagher, spokesman for CSFB in New York, declined comment. Lehman Brothers, Merrill Lynch, Morgan Stanley, Goldman Sachs, Deutsche Bank and Bear Stearns are among Wall Street firms that have already paid out bonuses, said headhunters.

CSFB bonuses were down approximately 50% versus last year across all asset classes, with equity professionals seeing cuts as deep as 80%, said recruiters. This compares to cuts of between 20%-50% on last year, they added. In addition, CSFB staffers saw an increased proportion of their compensation being allocated to company stock, with vesting periods also being extended in some cases as far as five years, a steep extension on the more commonly offered three years.

Mike Nelson, executive director at New York-based executive search firm the Options Group, noted that the CSFB bonus cutbacks can probably be explained by the poor performance of the Credit Suisse Group, which has announced a net loss of approximately CHF3.4 billion (USD2.5 billion) for 2002. This will have affected bonus pools and in turn hit derivatives staffers, he said. Tough years are felt across the board at firms, like CSFB, that share a bonus pool, added Carlos Mejia, v.p. at the Options Group.

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