Instead of canceling bonuses for top execs this year, Credit Suisse instead will pay them with the very toxic debt that’s thrown the world into an economic crisis. Yes, Virginia, there is a Revenge Claus.
The leveraged debt and mortgage-backed securities will be placed in a Partner Asset Facility and the employees get shares in it as part of their pay.
It’s genius on several levels. The bank gets to transfer out its illiquid assets, the employees get some kind of bonus, and the bankers are forced to eat the very crap they’ve been serving other people
Credit Suisse to Use Illiquid Assets to Pay Bonuses [Bloomberg] (Photo: DanCentury)