Credit Suisse plans "bail-inable" bonuses Credit Suisse is set to pay several thousand senior staff bonuses in the form of bonds that can be wiped out if the lender fails to meet capital requirements. Higher-earning bankers at Switzerland's second-largest bank by assets will be handed a fifth of their 2013 bonuses as "contingent capital awards," according to an internal memo seen by the Financial Times and confirmed by Credit Suisse. The move will make it the second-largest bank after Swiss rival UBS to follow recommendations by an EU commission led by Finnish central banker Erkki Liikanen. The commission last year called for bonuses to be partly based on "bail-inable" debt that can be converted to equity or wiped out in the case of trouble. In Credit Suisse's case, the bonds will be written down to zero should the bank's regulatory core tier one capital fall below 7 per cent. The bonds will be paid out to managing directors and directors earning total pay of more than 250,000 Swiss francs or US dollars. They will only pay out after three years and will pay a floating coupon of 5.33 per cent above the six months US dollar Libor rate. The bonds - worth several hundred million francs in total, according to FT estimates - are set to help Credit Suisse further bolster its regulatory capital. The Swiss bank has been a trailblazer for paying debt instruments to its staff. A few years ago, it linked legacy assets such as leveraged loans to the pay of its investment bankers, a move that proved highly lucrative for its staff as the depressed value of those assets improved significantly. The lender is expected to hand out a lower overall bonus pool to its staff this year after setting aside 13 per cent less for overall pay in the first nine months. Credit Suisse is the first European bank to tell staff about their bonuses for last year. Investment bankers are eagerly waiting to find out if they get a higher or lower bonus or even a "doughnut" - jargon for no bonus at all. Consultants estimate that, on average, bonus pools will be flat to slightly down but with huge disparities between banks and business lines. On Friday, it also emerged that James Gorman, Morgan Stanley's chairman and chief executive, will get a $5.06m share bonus that is almost double the size of the previous year, according to a filing with the US Securities and Exchange Commission. Mr Gorman will get the stock bonus in addition to a $1.5m salary and an unknown cash bonus and long-term incentive award.