It looks like UBS has done away with the concept of annual bonuses. The Swiss bank today unveiled details of a new bonus scheme, under which ëtop executivesí will receive (at the very, very most) a third of each yearís bonus at the end of the year in question. The rest will be put aside and only awarded if the bank/employee performs well and behaves nicely in subsequent years.
ìShould UBS's results be poor, a negative award, or malus, can result and the bonus account will decline. The account can also decline if regulations are grossly violated, if unnecessarily high risks are undertaken, or if individual performance targets are not met,î UBS declared in an announcement on the subject.
It also confirmed the claw-back rumours that have been circulating about recent yearsí bonuses, saying that ìa potential claw-back of paid bonuses for the former members of the board, as well as former top executives, is being assessed on legal grounds.í
In advance of this, a ëtask forceí has also been formed to encourage senior bankers to relinquish their recent bonuses voluntarily.
All of this would cause consternation even were it only restricted to a handful of ësenior bankersí and members of the board. But Peter Thorne, an analyst who covers UBS at Helvea in London, says the new rules will affect most people in the investment bank.
UBS investment bankers we spoke to knew nothing about the new bonus system, but if Thorneís right they might like to find out about it soon.
ìIt looks theyíre going to spread it far and wide,î he says. ìTo my mind, theyíre going to spread it around the investment bank as much as they can – if you are a lowly analyst or secretary you wonít be affected, but if youíre a trader taking a big risk position you probably will be.î
Very scary bonus developments at UBS
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