UBS cuts bonuses, raises base salaries.

Didn't other banks raise grad starting salaries a few months back? Looks like UBS is taking the same line but tweaked for MDs.

UBS Nixes Bonuses, but Raises Salaries By: Julia Werdigier, The New York Times | 02 Mar 2009 | 03:49 AM ET Text Size

A pay raise may be the last thing a bank is expected to offer these days. But UBS, the Swiss bank, is doing exactly that as it looks for new ways to compensate its investment bankers, two people who have been briefed on the changes said Sunday.

UBS Sharon Lorimer

UBS is increasing the base salary of senior investment bankers after reducing many bonuses sharply and to align overall compensation more closely with other financial services jobs, like consulting, said these people, who spoke anonymously because the bank has not decided to publicly disclose the changes.

The step is part of a bigger overhaul of UBS’s compensation system, they said.

Banks and regulators around the world have been rethinking the pay structure at banks as they suffer huge losses. UBS cut its bonus pool for 2008 more than 80 percent, while another Swiss bank, Credit Suisse, scaled back its bonuses 44 percent over all, with even sharper cuts for senior managers.

Credit Suisse, UBS and Morgan Stanley have also added so-called clawback provisions to bankers’ pay, allowing the banks to take back some pay from employees who fail to meet certain performance goals.

Any increase in base salary availabe to a managing director at UBS still depends on a performance review. But some salaries for senior bankers are being raised to about £300,000 from about £120,000, or to $429,000 from $172,000, still less than they earned when they received bonuses.

A spokesman for UBS declined to comment.

UBS, a bank that received state aid, said in November that its chairman, its chief executive and other members of the executive board would receive only salaries for 2008 and that all other employees would get lower bonuses.

Any increase in base salary would probably be the first for many UBS senior bankers. Until now, banks have tended to keep base salaries flat and use bonuses to increase pay. As a result, the annual bonus made up the bulk of a typical banker’s total compensation.