Compared to their rivals, UBS investment bankers have been waiting for an eternity to get their bonus numbers for 2012. The big day – March 6 – will likely be a bitter disappointment for an alarming number of i-bankers.
Andrea Orcel, chief executive of UBS’s investment bank, delivered the news to his troops in what appears to be a rather passive-aggressive manner, telling staffers that roughly half of them will receive a bonus of “around the market rate,” according to Financial News. The takeaway was that the remaining investment bankers will receive a zero bonus, although Orcel didn’t specifically spell that out.
eFC’s Sarah Butcher reported in late February that the Swiss firm’s investment banking bonus pool would likely be cut by 50%, with fixed income staffers taking the brunt of the punishment. It appears investment bankers at UBS are being singled out. The bank announced earlier this year that the bonus pool across the entire firm would only be cut by 7%.
Bonuses that are handed out will have multiple strings attached. There’s the deferred contingent capital plan (DCCP), which allows UBS to write down a portion of all bonuses to zero if the firm’s BASEL III core tier one capital ratio falls to 7% or less. Plus, bonuses paid under the DCCP won’t vest at all for five years. UBS has also introduced longer deferral periods for bonuses.
Needless to say, UBS i-bankers are more likely to be drowning their sorrows at their local pub, rather than swinging from the chandeliers.
Nearly 70% of Swiss voters have backed a plan that would give shareholders the power to curb executive pay. The initiative would affect all companies listed in Switzerland, including UBS.
European investment banks have a long history of trying, and failing, to make their mark in U.S. investment banking. The barriers to success may be about to get higher.
HSBC missed profitability and cost-cutting targets in 2012. Compliance failures were part of the problem, but its bonus caps for executive directors – nine times base salary, far above the EU’s proposed cap – didn’t help either.
The median amount of time a laid off worker is unemployed dropped to 16 weeks in January, down from 25 weeks in June 2010.
Berkshire Hathaway stock pickers Todd Combs and Ted Weschler are getting more money to play with. Warren Buffett’s deputies will each oversee roughly $5 billion – up from the $4 billion Buffett outlined in July – after each booked a strong 2012.
Morgan Stanley Chief Financial Officer Ruth Porat is rumored to be leaving the bank for a role on Capitol Hill. Three internal candidates are reportedly on the short list to replace her.
Morgan Stanley European wealth management business is reportedly on the block, but are there any potential buyers?
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