PIPs help Credit Suisse bankers avoid bonus tax, news report claims

A number of bankers at Credit Suisse are to receive bonuses in excess of £1 million as part of a long-term performance plan.

The Performance Incentive Plan (PIP) was instigated by the organisation between 2004 and 2005 and may lead to more than 300 staff members receiving payouts from a bonus pool worth more than £1 billion, the Times reported.

The plan was launched by the bank as part of a bid to retain top talent and senior executives while average payments are expected to be approximately £3 million.

According to the newspaper, the final sum will be dictated by the performance of Credit Suisse’s share price during the coming weeks.

Payments as part of the PIP will not be taxed by the government’s new 50 per cent levy on bonuses over £25,000 or the 50 per cent income tax for high earners.

Meanwhile, many of the UK-based managing directors at Credit Suisse are expected to see their bonuses reduced by 30 per cent in the wake of the government’s new bonus levy.

By Jim Ottewill