Wall Street Bankers in Switzerland Seek Pay Bump on Franc Surge
(Bloomberg) — Bankers at Wall Street firms based in Switzerland are asking their bosses in New York for higher compensation ahead of the upcoming bonus season, as the franc’s surge threatens to wipe out more than a 10th of their pay for this year.
Staff in Switzerland working for US banks are more sensitive to exchange rate impacts as their compensation is more often calculated in dollars, according to people familiar with the matter. That’s led deal-makers in Zurich and Geneva to argue for at least some of their pay to be adjusted before performance and other factors are taken into account, the people said, who asked not to be named discussing private details.
The Swiss franc’s status as a safe haven amid geopolitical and tariff turmoil has meant the country’s currency has gained more than 13% against the dollar since the beginning of this year.
Along with the country’s high cost of living, a quirk of Swiss accounting in which many foreign banks record their revenues in dollars and their costs in Swiss francs means the dollar’s decline is more resonant. That’s made the conversations around salaries particularly pressing, the people said.
Switzerland is one of the most competitive markets for Wall Street firms in Europe. Those institutions are seeking a bigger slice of investment banking business advising corporates on everything from deals to placements to lending following the demise of Credit Suisse. Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., and Jefferies Financial Group Inc. are all present, offering various investment-banking services.
Representatives from the banks declined to comment on compensation.
Some US banks have adjusted salaries in line with the foreign exchange rate in the past, and are recognizing this as an issue, however it is unclear whether they would make similar considerations this time around, according to the people.
Switzerland has been a reliable source of fees for investment banks advising on mergers and acquisitions. The country has one of the biggest stock markets in Europe and is home to giants such as Nestle SA, Novartis AG and Roche Holding AG who frequently turn to investment banks for advice on M&A and disposals. The Swiss corporate landscape is also a hunting ground for private equity firms.
Bankers have seen a surge of deals this year including the combination of insurer Helvetia Holding AG with rival Baloise Holding AG and Advent’s take-private of chip-maker U-blox Holding AG.
–With assistance from Jan-Henrik Förster.
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