May 15 (Bloomberg) -- UBS AG, the European bank with the biggest losses from the financial crisis, plans to boost salaries for senior bankers by an average of 50 percent to stem defections, three people with knowledge of the matter said.
The salary increase would apply to managing directors in investment banking, fixed income and equities worldwide, said the people, who declined to be identified because the matter is confidential. Less senior bankers, including associate directors and executive directors, may also get raises, they said.
UBS cut its bonus pool by 78 percent in January after amassing the biggest loss in Swiss corporate history in 2008. The bank came under pressure from government officials to slash variable pay after the Swiss state provided capital to UBS and helped shift hard-to-trade assets off its books. Bank of America Corp., which bought Merrill Lynch & Co., said in March it might raise salaries as a proportion of compensation.
“If the base goes up, it’s because bonuses are going down,” said Jason Kennedy, a London-based investment-banking recruiter. “It’s the same shrinking pie, you’re just stealing from Peter to pay Paul.”
Managing directors at the Zurich-based company currently earn about $190,000 to $250,000 a year in base pay, Kennedy said. Executive directors and directors earn from $150,000 to $200,000, he estimated.
To help retain senior bankers, UBS set aside about 900 million Swiss francs ($811 million) for bonus payments over the next three years in a plan to tie compensation to longer-term profitability. The payments will depend on both the bank and the employee’s division being profitable, and on UBS accepting no further capital from the state, the company said in February.
The salary increase would apply to managing directors in investment banking, fixed income and equities worldwide, said the people, who declined to be identified because the matter is confidential. Less senior bankers, including associate directors and executive directors, may also get raises, they said.
UBS cut its bonus pool by 78 percent in January after amassing the biggest loss in Swiss corporate history in 2008. The bank came under pressure from government officials to slash variable pay after the Swiss state provided capital to UBS and helped shift hard-to-trade assets off its books. Bank of America Corp., which bought Merrill Lynch & Co., said in March it might raise salaries as a proportion of compensation.
“If the base goes up, it’s because bonuses are going down,” said Jason Kennedy, a London-based investment-banking recruiter. “It’s the same shrinking pie, you’re just stealing from Peter to pay Paul.”
Managing directors at the Zurich-based company currently earn about $190,000 to $250,000 a year in base pay, Kennedy said. Executive directors and directors earn from $150,000 to $200,000, he estimated.
To help retain senior bankers, UBS set aside about 900 million Swiss francs ($811 million) for bonus payments over the next three years in a plan to tie compensation to longer-term profitability. The payments will depend on both the bank and the employee’s division being profitable, and on UBS accepting no further capital from the state, the company said in February.
No comments:
Post a Comment