Credit Suisse's practice of announcing a new compensation plan has become an annual ritual, like the January sales or the sighting of the first snowdrops poking through the ground, according to the WSJournal.  This year is no exception, as it has all the traditional hallmarks:  creativity, complexity, worthy talk of aligning incentives and some extra juice for the staff. Senior employees of Credit suisse will receive part of this year's remuneration in structured notes, a fixed-income investment that will pay a generous 5% coupon - 6.5% for U.S. employees.  It's backed by 18% of the bank's derivatives book. The so-called "PAF2" is a riff on the first "Partner Asset Facility" plan, a portfolio of toxic assets used to pay staff in 2008.  After much consternation from staff, the value of those 'toxic assets' has risen 70%.  Other notable Credit Suisse plans include a 2005 plan that famously netted CEO Brady Dougan an $80 million payday in 2010. The PAF2, being a fixed-income product, doesn't offer any upside like previous plans and could in theory pay out less than full value, although Credit Suisse will absorb the first $500 million of losses from the underlying assets.  The real motivation behind the structure is regulatory arbitrage:  Credit Suisse gets to remove assets from its balance sheet that would attract substantial additional capital charges under Basel 3, thereby accelerating its plan to become the first major bank to operate fully under the new regulatory rules.    [Bloomberg News, 1/24/12]