Morning Coffee: Credit Suisse’s belated bonus generosity not necessarily working. Intensely patronising layoffs afflict the fintech sector

If you had the choice to work elsewhere now, would you stay at Credit Suisse? What if you were offered a hefty mid-year retention bonus to stay? Always not?

If Credit Suisse wants to retain anyone now, it likely wants to retain the chief executives of its investment banking division. In particular, he is likely keen to retain CEOs covering such hot sectors as fintech and power, energy and renewables. And yet, it is the managing directors of Credit Suisse who are leaving.

Bloomberg reports that the two Prescott Johnson, Managing Director of Credit Suisse the energy and infrastructure team, and David Goldstein, Managing Director of Credit Suisse’s fintech team, is leaving. Both are based in the United States and had worked for Credit Suisse for more than a decade: Johnson had been there for 12 years, Goldstein 16 years. Johnson joins Bank of America; Goldstein goes to Jefferies.

The departures come after Credit Suisse announced last week that its investment bank would undergo further restructuring pending a new plan to be revealed in the third quarter. However, Credit Suisse’s M&A bankers need to be protected from the turbulence: the bank intends to switch to an “advised” model and its M&A revenues rose 44% year-on-year in the second quarter following a “significant deal-closing activity”. David Miller, global head of investment banking and capital markets, said in June that the bank was hiring: having already recruited 55 chief executives in the first six months of the year (to replace 69 parties in 2021), CS planned to hire another 40, Miller said.Credit Suisse may be restructuring, but its M&A and capital markets businesses are expected to be in growth mode.

If that’s not enough to convince people to stay, Credit Suisse recently handed out $300 million in retention bonuses in a single month to help it retain talent. These bonuses were intended for employees in Asia and North America, and a senior banker from the financial sponsors alone would have received $10 million. Goldstein and Johnson must have received something.

Not enough, it seems. And the risk is that where they have gone, others will follow. Despite the admissions of consistency, there is turbulence. Credit Suisse investment banking director Christian Meissner is leaving and it’s unclear who will replace him. $300 million in retention bonuses doesn’t count for much after last year’s bonus cut and when this year’s bonuses are likely to be reduced as well. In addition, the CHF 1.9 billion loss in the first half and the CHF 1.1 billion loss in investment banking in Q2 do not bode well for further clawbacks on bonuses awarded in the past. . Unfortunately for Credit Suisse, Goldstein and Johnson may not be its last chief banking officers to leave this year.

Separately, the 780 people laid off from Robinhood in the latest round of cuts there can at least not have anything to do with what appears to be a mildly sickening corporate culture.

In a letter to staff about the job cuts, the CEO Vlad Tenev repeatedly calls his acolytes “Robinhoodies” and laments the need to leave nearly a quarter of his The Robinhoods are going. Nevertheless, the needs must, and Tenev says each “Hoodie” will soon receive a Slack message notifying them of their status. If they are no longer wanted, this will be followed by a schedule to chat live about their specific situation. “We know this news is difficult for all Robinhoodies, and we are also offering wellness support for those who would like it,” adds Vlad.

If the feeling is strong, the insistent evocation of a group of friends is not. Credit Suisse employees can at least take comfort in the fact that they aren’t known collectively as “Suisseys,” even though the bank may let many more go soon.

Meanwhile…

Robinhood shares rose 13% after announcing the Hoodies were going. (Bloomberg)

PayPal saved $360 million with staff cuts. (Bloomberg)

A Hong Kong-based company apparently owned by former UBS banker Calvin Choi appears to be arguing $310 billion after climbing in value by 22,000%. AMTD Digital grows digital businesses, including financial services companies, and is now worth more than Bank of America, Morgan Stanley or Goldman Sachs. The rise in price may have something to do with the fact that only a small proportion of AMTD’s shares are available for trading, which facilitates the rise in price. Choi is intolerant of enemies. There are those who envy and [are] jealous, and the cold-eyed and the scoffers, and the wicked, there are the slanderers,” he said last year. (Bloomberg)

SocGen says it is in “cautious but not catastrophic” mode. (FinancialTimes)

Point72 hired two economists: Sophia Drossos as Economist and Strategist based in New York, and Soeren Radde as Head of European Economic Research, based in London. (Hedgeweek)

Don’t be too ambitious with your vacation plans. “Trust your instincts and gravitate toward experiences that feel more enjoyable when you imagine them.” (WSJ)

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