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A Revolution in Compensation at Investment Banks? Credit Suisse and its Competitors in 2010

Publication type: Case study

Research Archive Topic: Business Economics and Public Policy, Capital Markets and Investments, Leadership, Organizations

Abstract

In the wake of the 2008 financial crisis, compensation at investment banks came under fire, with some critics connecting Wall Street's short-term incentives with the meltdown itself. Seeking to better align the long-term interests of shareholders with employee compensation, Credit Suisse outlined a new pay structure in October 2009 that adhered to the best practices set at the G-20 summit a month earlier. Meanwhile, competitors including Goldman Sachs and Morgan Stanley were also considering new ways of compensating employees. In this case, students analyze executive pay within the financial services industry as well as the sales and compensation ratios of investment banks to explore the implications of the new pay structures.

Citation

Kogut, Bruce. A Revolution in Compensation at Investment Banks? Credit Suisse and its Competitors in 2010. Columbia Business School: CaseWorks, Spring 2010.


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