Credit Suisse CEO Tidjane Thiam says the current pay model for investment bankers “does not work.”
That’s according to Bloomberg’s Jeffrey Voegeli, who reports that the chief executive made the comments at a conference in Paris with IMF director Christine Lagarde and the Bank of England governor, Mark Carney.
“The business is structurally quite profitable provided the pay can go up and down. It’s the ‘and down’ that they don’t accept,” Thiam reportedly said of investment bankers.
He said that the current model of having high levels of fixed pay doesn’t make sense, because investment banks have cyclical revenue streams.
Thiam was CEO of the insurance firm Prudential before joining Credit Suisse in March, and wasted little time in shaking up the bank after starting there. Credit Suisse has announced plans to shrink its investment bank while building up its wealth management division.
He is not the only Wall Street CEO to make a dig at Wall Street compensation culture. In October, Deutsche Bank CEO John Cryan pointed to the “significant challenges” of his firm’s “inflexible compensation culture.”
Also in October, Barclays chairman John McFarlane spoke at the annual conference of the British Bankers’ Association in October and argued that bankers earned too much.
Wall Street banks begin reporting fourth-quarter earnings on Thursday, and are expected to announce bonuses in the coming days.