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A corporate reorganization unveiled by UBS this month could channel a greater share of the company-wide bonus pool toward private bankers, at the expense of the struggling investment banking division. The bank said it will separate its business divisions into three autonomous units and "will align incentives for management and staff of each autonomous business division directly with its financial results" and degree of risk. "The new business model will enhance... Read more

Below-market salaries are impeding Canada's central bank from fielding a world-class research team, according to a recently published report by an authoritative panel of U.S.-based economists commissioned by the Bank of Canada itself. The panel found "a substantial inconsistency" between pay scales and the bank's official objective of operating a “second-to-none” research department. "The Bank faces a difficult choice: either abandon the objective, or increase the amount of resources for economist... Read more

The threat of defections is reportedly shaping up as a critical obstacle to Lehman Brothers' move to shore up its balance sheet by selling a controlling stake in its asset management division. Multiple scenarios for Lehman Brothers have moved in and out of focus in recent days, running the gamut from asset sales to an Asian strategic partner to a hostile takeover. The swirl of disparate media reports reflect an institution... Read more

Chicago-based mutual fund firm Ariel Investments laid off 18 employees or about 20 percent of its staff, citing a need to run a leaner operation amid difficult market conditions for its value equity style. Pensions & Investments reports that the casualties include two of Ariel's nine technology staffers, two research analysts and a position responsible for sponsorships. One of the laid-off researchers, Robert Goldsborough, had just been appointed to the firm's... Read more

Merrill Lynch froze new hiring, including replacement hires, for the remainder of 2008, according to media reports. Retail brokers are exempt. Any other new hires must be approved by a member of Merrill's management committee, according to an internal memo from Greg Fleming, the bank's president Thomas Sanzone, the chief administrative officer. "As we focus on returning the firm to profitability, it is extremely important that we all manage expenses prudently,"... Read more

Trading up for talent, banking boutiques are feasting on Wall Street's castaways. While many laid-off bankers seek a new home within the vibrant hedge fund sector, smaller sell-side firms also are dipping into the pool of top candidates unleashed by the industry downturn. A recent Reuters story points to Thomas Weisel Partners, Wedbush Morgan Securities, and Evercore Partners as boutique firms engaging in opportunistic hiring lately. San Francisco-based investment bank Thomas Weisel... Read more

Societe Generale reportedly fired a four-member merger arbitrage trading team based in New York last month. The move is an apparent response to declining merger activity, according to Bloomberg News. Other players such as hedge funds Deephaven Capital Management and Tisbury Capital Management shut their U.S. merger arbitrage strategies this year as well. Unnamed sources told Bloomberg the group had invested SocGen's own capital and was breaking even since the beginning... Read more

Who says it's only the founders of hedge fund firms that have a shot at a nine-figure payday? Fortress Investment Group granted star macro hedge fund manager Adam Levinson 31 million shares of the publicly traded firm, valued at $300 million. The grant places Levinson among five other executives who together hold a controlling interest in Fortress, says The Wall Street Journal. Its purpose is to encourage the portfolio manager to... Read more

Wall Street will accelerate layoffs this year, shrink severance packages and retention efforts, and defer more pay. As for bonus expectations, already down 25 - 35 percent year-on-year, they'll melt further if asset write-downs exceed current projections. Those are the words from Johnson Associates, a compensation consultant whose clients include many large financial institutions. The firm's second-quarter report spotlights the downside risk to its own projections for 2008 bonuses. It... Read more

Negotiating compensation is a delicate dance that begins when you first apply for a job. Often, candidates are asked for information they may not wish to provide at the outset, when a job posting asks for their current or most recent compensation. "I have real reservations about disclosing comp without knowing who the other party is," says New York career counselor Roy Cohen. On the other hand, if a company... Read more

Cadwalader, Wickersham & Taft laid off 96 U.S. and UK lawyers this week. All but a handful worked in its real estate finance and securitization practices. The New York-based firm, whose rapid growth in recent years stemmed from tying its fortunes to booming mortgage-backed securities issuance, becomes the latest large law firm to undertake mass layoffs after the boom turned into a bust. This is round two for Cadwalader, which cut... Read more

With 2008 past the halfway mark, the latest year-end bonus projections point to a plunge of more than 30 percent from 2007 – an even gloomier view than three months ago, when Wall Street was digesting the Bear Stearns fiasco. New York City's comptroller sees bonuses shrinking "in excess of 30 percent" this year, Frank Braconi, the chief economist in the comptroller’s office, told the New York Times. "That would amount... Read more

You're a private-client relationship manager responsible for $300 million in assets, but your employer is trimming both bonus allocations and back-office resources that support your activities. What are your choices? If you work for a large institution that's retrenching amid the credit crunch, jumping to a private-wealth boutique could be a viable option. Or, a mid-career private wealth manager whose current business is stagnating might think about relocating to a high-growth... Read more