CREDIT SUISSE Said to use Illiquid Securities to pay Bonuses

Note that employees receive LIBOR + 2.5% (4.0%) so the banks are making money on the spread. Anyone know if they have to pay income taxes on the grant (don't know vesting schedule) - would really suck if you have to come out of pocket to pay the income taxes but don't see any returns for 4-5 years (as the article states).

do you see this scheme becoming popular? for next year bonuses? clearly there's a widespread understanding that they have nowhere else to go... so instead of "retention packages" they are delivering "dumping toxic assets packages".

I have no idea how their system works, but the comparable system for tech stock compensation is: stocks are taxed at vesting date (and a portion are sold whether you like it or not to cover withholding taxes), options are taxed at exercise date.

I know a few at CS - its scary. This wont last. if they have to do this to fund retention of talent and help with bonuses, what money is left to buy other held illiquid assets; I ask quietly to myself?

UD it impacts only MDs on, not the rank and file (those that i know). is it possible they want to politely ask expensive employees to go without having to pay them retention packages? some employees will surely feel offended with these type of bonuses.

Tech guy, you need to do some more research...

you have two sets of tax systems, regular and the AMT. Options get SMACKED by the amt...