By Scott Ronalds

There was an interesting article in the New York Times last week on Wall Street bonuses – a topic that is enough to make many investors sick, given the sad state of the financial industry.  

Putting aside the debate on whether bonuses should be paid at all in a time when many institutions are sinking, it’s interesting to note how Credit Suisse is rewarding its investment bankers.  Just as these financial engineers were cooking up new ways to package and sell sour mortgage investments and other troubled assets to the unsuspecting public, they’re now being told to eat their own cooking.

As part of their bonuses, the Swiss bank is paying its senior executives some of the distressed investments they were responsible for creating, in lieu of company stock that they normally would have been paid.  As the Times article points out, these investments could pay off down the road (they’ve already been written down considerably), or they could fall further in value.

In any event, the I-bankers are getting a taste of their own cooking, something we at Steadyhand believe is crucial in this business.  All too often, investment professionals have far too little (if any) ownership in the products they create, manage and/or sell to their clients.  To paraphrase from an article that we recently published on this topic (Show me the Money: the Importance of Co-investment), if it’s not good enough for them, it shouldn’t be good enough for you.

While no one will be feeling sorry for the brass at Credit Suisse, at least some investors will take comfort in the fact that they’ll be eating leftovers this holiday season.