Lunchtime Links: Negative bonuses possible at UBS

18 November 2008

2 minute read

Lunchtime Links: Negative bonuses possible at UBS

Yesterday's unnerving bonus revelations from UBS have become more unnerving still now that there's been time to digest them. The Times reports that as part of the new malus system for recouping bonuses in the event of everything from losses (group or division), asset writedowns, personal misconduct and missed performance targets, it will soon be possible for UBS senior bankers and 'risk takers' to accrue a negative bonus balance. The bank has apparently confirmed this, but it's not immediately clear what the implications will be for anyone changing jobs - would departing bankers need to pay UBS for the pleasure of leaving to work elsewhere?

If some bozo on the other side of the world loses the company a fortune, you pay the price. (The Times).

Barclays bends a bit on bonuses. (Alphaville).

"What they forget is that most of these large bonuses go to men with expensive wives who like to spend." (Fintag).

Other bank execs urged to go Goldman and relinquish bonuses. (FT).

Could Goldman Sachs go private? (Clusterstock).

Goldman manages to forge an implicit pact with the best and brightest: Give up your life, give us your soul, and at a relatively young age we'll make you really wealthy, even by Wall Street norms.... If the pool that feeds Goldman partners shrinks, or its returns fall, or the firm stops sending partners limited, the pressure builds from below, and the mechanism begins to break down. (The Deal).

HSBC cuts 500 jobs in Asia. (Bloomberg).

Cuts at Putnam. (FT).

Cuts at Blackrock. (Bloomberg).

Profits plunge at Macquarie. (Alphaville).

Dear Citi Colleagues, A few minutes ago I concluded a Town Hall meeting in New York... (DealBook).

Less to Citi's job cuts than meets the eye. (Breaking Views).

Citi to cut less than 300 jobs in Singapore. (Reuters).

Connexion Capital hires someone. (FinAlternatives).

Hoare Capital markets launched in London. (Financial News).

Jobless of Henley on Thames, part II. (Telegraph).

AUTHOReFinancialCareers UK

Insider Comment

hs
hsbc employee
19 April 2009
If you pay a bonus for selling certain products you are bound to have people miss sell the product to gain the bonus. Yes it is that simple! It is not an exaggeration to say that in every branch someone has done this. Pay a reasonable wage with pay rises each year for good work, in other words treat the staff fairly,and go back to old fashioned banking where customers were people and not just figures.
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Av
Average Joe
23 November 2008
edster999. A lot of the criticism in the media (and by politicians) is by people who have a bare understanding of what they're talking about, but are able to put together a sensationalist headline. If these guys were any good at their jobs, and had real investigative skills and academic qualifications, the issues they report with glee would have been outed and discussed properly years ago.
Good point about the bonus system though - the majority of people working in the city don't earn the astounding figures mentioned (Dick Fuld etc). For the average joe, the equivalent s per hour worked and the sacrifice of a personal life for a potentially 0 bonus might make people reconsider the culture and whether it's all worth it.
However, I don't see why an entire industry and thousands of honest and hard working staff should be castigated because of the few.
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Go
Goldfinger
19 November 2008
Bankers have historically been idiots. Nothing has changed in that regard. Their biggest problem for the forseeable future will not be bonuses, but rather finding liquid clients to rob. Those that do that will be paid handsomely. Risk taking at banks is a thing of the past.
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ed
edster999
19 November 2008
god bless UBS! A negative bonus in a downturn - a great response to todays banker blame game. Lets just call this great PR for UBS as any savvy banker would chop/change employer to arb the bonus scheme anyway.
Big issue for me, an ex banker, is the media lynching of bankers. The proportion of "bankers" earning very serious bonuses is TINY - and those people are either top execs or front office traders who've made their employer lots of cash - as in every industry. Yes theres (historically) a premium on banking base salaries but this just reflected a wellfunded industry competing for talent - take a look at the uk invisibles balance of payments, then look at our manufacturing... who did best?!
Most "bankers" are actually just ordinary salesmen, ops guys and accountants who happen to work for a bank. They take a premium salary and (avg) 15% discretionary bonus in exchange for low job security, high pressure & low control. Most neither create the esoteric products (marketing dept) nor set the rules (risk dept) but live with them. If the media needs a story how about:
RISK MEASUREMENT SYSTEMS
TRICKY STRUCTURED PRODUCTS
BANKING REGULATON
UK PLCs OVER-EXPOSURE TO FIN SERVICES I
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Je
Jean A.
19 November 2008
From golden parachutes to leaden parachutes... from one extreme to another! Hell why not sue the "criminal" too and out him/her in jail after taking everything he/she owns (house, car, savings, retirement plan!)... Let's make workplace a real fearful place and undermine new ideas and talented people in the name of a "risk-free environment".
We haven't learned anything yet!
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