Once upon a time in London, bankers were paid bonuses in the form of fine wines, Persian rugs and gold bars. That was the early 1990s and bonuses in kind were (predictably) a way of avoiding increased taxes on salaries. It now seems that UBS has been doing something similar quite recently, out of the kindness of its heart.
UBS's generosity was manifested in France, where the bank is currently embroiled in a court case alleging that it helped wealthy French clients to avoid heavy French taxes. Earlier in the week we heard how the bank invited French clients to hunting events alongside its Swiss bankers purely so that they could have a "joint experience" and without any intention (honestly) of selling anything. Yesterday, we heard how UBS recruited its bankers in France.
"To get them you needed to pay," Patrick de Fayet, the former head of the front office at UBS's French private banking unit told a court yesterday. "- So they were offered beautiful cars, high salaries and bonuses." This seemed to work: "We had as many as 140 bankers in France. It was a war machine.”
The perks didn't stop when the bankers were onboard. De Fayet also described how the bankers had a box for entertaining clients at Roland-Garros, the French tennis open. This, "costs a fortune," he reflected. "- Maybe something like 60,000 euros each year for box seats and a lunch service.”
This generosity seems to have been in place up to 2007. It's not clear whether it continues. However, it seems unlikely given that the six most senior French bankers in the unit are now facing charges of aggravated tax fraud and money laundering -and the French state would like fine UBS itself €1.6bn.
Separately, despite all the noise about banking executives pulling out of the “Davos in the Desert” summit following the alleged killing of journalist Jamal Khashoggi, American Banker says banks haven't pulled out of the summit entirely. Senior investment bankers from HSBC, Societe Generale and Credit Suisse are reportedly still planning to attend. So too apparently are 'executives' from Morgan Stanley and Citigroup.
Matthew Connolly, who once led Deutsche Bank's pool trading desk in New York, and Gavin Campbell Black, who worked on the bank's London desk, have been found guilty of LIBOR manipulation in New York. (Reuters)
Erin Baskett, a managing partner at Autonomous Research in New York claims she was paid 28% less than the suggested base salary for all partners, that a male managing partner with the same job was paid four times as much in total compensation in 2013, and that another "similarly-situated" partner earned 10 times as much as her that year. Autonomous denies this. (Business Insider)
Jamie Dimon says the fixed income trading market could double in size in the next two decades. This does not mean banks will make more money from it. Margin compression means banks now make $61 billion per year from the business, compared with $101 billion in 2010. (Reuters)
The "socialist" ex-CEO of UK accounting firm Grant Thornton encouraged the firm to speak out on issues including mental health at work and social mobility; capped her own pay; and adopted a new bonus system that meant all employees are entitled to a share of its profits. During her tenure average partner pay fell 5% to £365k while pay at rival firms rose. (Financial Times)
Morgan Stanley has a Multicultural Innovation Lab. 11 out of the 14 founders it's sponsoring are women. (Forbes)
It's a false economy for mothers to give up work to look after children for purely financial reasons. “If you decide the cost of childcare means it’s not worth going back to work for, over 20 years, that’s hundreds of thousands in lost earnings.” (Telegraph)
Marcelo Claure, Softbank’s chief operating officer, said “there is no certainty” that SoftBank will launch another Vision Fund and added that no dates have been set. He said SoftBank is “anxiously looking at what is happening” in Saudi Arabia. (Financial Times)
The brutal truth about data scientists. (Quora)
A vacancy has arisen for anyone wishing to be Sesame Street's Big Bird. The previous incumbent held the position for 50 years. (New York Times)
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