Credit Suisse Group employees learned that less of their compensation will be deferred to future years.  The firm advised its employees that total compensation in excess of 250,000 Swiss francs ($272,000) would be subject to deferred payout in future years.  Previously, any compensation (i.e., bonus) above 50,000 Swiss francs would be subject to deferral.  Another benefit to employees was that the vesting period for deferred compensation has been reduced one year, to three years.  These changes will impact about 90% of employees - meaning they will get more cash up front when 2011 bonuses are paid out in early 2012. The move appears to run contrary to a push by global regulators to have banks increase the amount of compensation that's deferred, an initiative aimed at reducing unnecessary risk-taking.  Yet, Credit Suisse's deferred compensation practices had been more onerous than many of its competitors, so this modification brings the firm more in line with those other firms. Credit Suisse notified its regulators of the changes, as well as the fact that Credit Suisse has retained its ability to claw back compensation in certain circumstances, the person briefed on the matter said. Compensation experts predict 2011 will be rough on Wall Street, where profit has been pinched by falling trading revenue.  Bonuses on the Street are likely to fall below last year's bonuses by an average of 20 - 30%.   If this turns out to be the case, it will be the weakest bonus season since the financial crisis. Credit Suisse Internal Memo:

Today we are announcing the 2011 compensation plan. Adjustments to the existing plan have been made to improve the competitiveness of our compensation structure in what continues to be a challenging business and market environment, and in response to your feedback.

The main changes include moving the deferral threshold from CHF 50.000 discretionary variable incentive award (Award) to CHF 250.000 total compensation and changing the deferral rates. This simplifies our deferral scheme and puts us more in line with our market peers. Only a small number of employees will have more compensation deferred under the updated plan. We have also decided to give the deferred portion in the form of shares, with performance conditions for Managing Directors and select groups of employees, and discontinue APPA. The vesting period is now limited to three years instead of four.

Employees who are subject to deferral have the opportunity to elect to receive a portion of the deferred award in cash rather than shares. Further details of this award and the election process will be communicated in the next few weeks.

Our objective with regard to compensation policy continues to be to reward employees fairly and competitively as they build the firm and franchise for the long term. We believe this is a responsible, equitable compensation plan balancing the interests and expectations of our employees, shareholders and regulators.

All Managing Directors and HR have been briefed so please do not hesitate to contact your line manager or your HR consultant if you have any questions. You can also refer to the Compensation Design Intranet for more information and a link to the 2011 deferral calculator, which helps you understand the impact of the new deferral table depending upon your assumptions about your Award.

In the challenging business environment, our clients look to us for extraordinary service and advice. We appreciate the continued hard work and commitment of all our employees across bank as we work in partnership to build our global business. [Dealbook, 11/14/11]