Raising Salaries After Bonus 'Mutiny'

The New York Times reports that UBS is to increase the base salary of senior investment bankers as it strives to retain top talent in the wake of disappointing bonus payouts.

Losses over at the investment banking unit in 2008 saw the division's bonus pot cut by some 80%, and The New York Post reported last week that 'mutiny' was 'brewing' in the unit as senior bankers trained their sights on investment banking head Jerker Johansson, who they believe hasn't done enough to fight their corner. The so-called 'mutiny' is said to have culminated in an unruly conference call late last month which 'devolved into a shouting match'. Johansson is said to have got very defensive during the call, allegedly telling bankers that he was 'doing the best I can'.

The New York Times has now revealed that the salaries for some senior investment bankers (at Managing Director level and above) are likely to increase from £120,000 ($170,000) to £300,000 ($425,000).

Swiss newspaper NZZ am Sonntag has quoted new UBS CEO Oswald Gruebel saying that it could take up to 3 years to get the bank back into sustainable profit, and that there would have to be further reductions in UBS's cost base before this was achieved.