UBS is not only hiring in IBD and equities and fixed income sales and trading, it is also paying some people some big money in purest cash.
So says today’s UBS remuneration report for 2015. In 2015, the Swiss bank paid 656 of its key risk takers a total of CHF2.1m ($2.2m), split as follows.
The cash component of UBS’s pay includes both fixed salaries, the cash-element of role based allowances, and cash bonuses. In 2015, 656 people at the Swiss bank had $1m in cash to spend as they wished.
The deferred component of UBS’s pay includes all deferred stock bonuses as well as the equity element of role-based allowances. In 2015, this totaled $1.2m.
UBS’s key risk takers look cash rich compared to their peers. Over at Deutsche Bank, cash compensation averaged a mere $721k in 2015.
There is, however, a catch. UBS’s deferral schedule is more punitive than its peers. Yes, you get plenty of cash up front, but you’ll be made to wait for the proportion you don’t.
While Deutsche now defers its bonuses over four years, with bonuses vesting equally over that period, UBS defers bonuses over five years. The Swiss bank runs several deferral schemes. Under the Equity Ownership Plan (EOP) bonuses vest over five years, with vesting taking place between years three and five and stock then subject to an additional six month withholding period. Under the deferred contingent capital plan, bonuses vest in full only after year five – and then only if certain conditions are met (eg, the Tier 1 capital ratio has to be above 10%).
99% of UBS’s staff don’t get big bonuses
As at Deutsche, alongside its haves on $1m cash payouts and $1.2m deferred bonuses, UBS contains a large proportion of have-nots.
659 key risk takers at UBS got to share $1bn, or 40% of the bonus pool last year. This left the remaining 45,652 UBS employees $1.5bn between them. The differential in bonuses per head for key risk takers and other UBS employees was as follows: