UBS Won't Pay Up. JPM Won't Poach. Right.

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Events of the past two days signal new twists in Wall Street's post-crisis jousting for talent. In particular, battle lines are being redrawn among Bank of America, UBS, JPMorgan Chase, Morgan Stanley and Citigroup - with compensation issues at center stage.

We'll start with UBS. The Swiss bank, long the global leader in private wealth management, is poised to redouble efforts to recruit financial advisers away from Bank of America Merrill Lynch and Morgan Stanley Smith Barney. Yet it won't do so by outbidding the competition, says Robert McCann, the new chief executive of UBS Wealth Management Americas.

"The days of UBS, if in fact UBS was, the high bid in the market to just bring talent in, it's over," McCann said Tuesday on Bloomberg television. "I want to pay people and I want them to feel that they are getting paid fairly, but I won't be the high bid in the market."

Late in 2008, UBS reportedly lured as many as 200 U.S.-based brokers away from Goldman Sachs, Morgan Stanley and other rivals by dangling signing bonuses as large as 260 percent of trailing 12-month commissions.

McCann's Promise - and Challenge

McCann is widely admired among the Merrill brokerage force that he headed until early 2009 when he became an early casualty of the Bank of America acquisition. Already in play amid a strained integration with the B of A culture, brokers and others who came over from Merrill now must also deal with possible fall-out from steep compensation cuts for executives ordered by Kenneth Feinberg, the U.S. government's pay czar for bailed-out firms.

The UBS sales force faces challenges of its own - most notably a worldwide scandal over abetting tax evasion that ultimately forced the Swiss parent to turn over information on thousands of clients to U.S. and European tax authorities, marking an exception to Switzerland's banking secrecy laws. The bank was also hard-hit by the financial crisis, although it eventually repaid the Swiss government its $5.6 billion bailout aid. Private bank clients withdrew $153.9 billion in net assets from UBS since March 2008, according to BusinessInsider.

When announcing McCann's long-anticipated appointment Tuesday, UBS Group CEO Oswald Gruebel said the former Merrill executive will "apply his long and deep client relationship and business experience to gain market share, increase profitability and grow our Wealth Management Americas business."

To counter McCann's appeal to Merrill brokers, BusinessInsider reports that Sallie Krawcheck, B of A's head of global wealth and investment management, is trying to recruit back ex-Merrill executive Brian Hull. The site says Hull has deep connections with the Merrill Lynch advisor culture, but B of A might find it impossible to lure him back after pushing him out last year.

Dimon's Pledge

Meanwhile, JPMorgan Chase CEO James Dimon pledged not to exploit government-imposed pay restrictions to poach talent from B of A or Citi. "I morally have an issue with people going against these companies that are hamstrung and making it worse," Dimon said in a speech at the SIFMA conference in New York Tuesday. "It would be wrong for us to say, 'Let's go hire their best people.' I think that would be a terrible thing to do."

That promise shouldn't be taken at face value. "Wall Street execs ALWAYS say publicly they won't poach from the weak. And they almost always do it anyway," notes Politico. "It happened to Bear and Lehman as they crashed and it will happen again."

At least Dimon is being consistent: In March of 2008, he reportedly pleaded with his counterparts at other big banks not to recruit employees from Bear Stearns while JPMorgan was in the process of acquiring that sinking firm.

Pay Czar's Zigzag

Finally, The Wall Street Journal reports that Treasury pay czar Feinberg - even while halving total compensation and slashing cash compensation more than 90 percent for top-paid employees at seven bailed-out institutions - actually raised the average base salary by 14 percent among the individuals whose pay he oversees. Base pay was adjusted upward for 89 of those 136 employees as a direct result of Feinberg's review and the average climbed from $383,409 to $437,896, according to the WSJ.

The salary adjustments were made after banks complained that Feinberg's edict to pay bonuses in restricted stock would deprive employees of needed cash and cause retention problems for the companies. Still, the increases "offset the total cuts by only a small amount," the Journal notes.

The biggest beneficiary of the adjustments may be Citigroup. Thirteen of its 21 employees involved in the review saw their base pay more than double.

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