Lunchtime Links: UBS's clawback partly down to cruel accounting whim

Collectively, senior bankers at UBS are CHF300m ($282m) worse off than they might have been if the bank had made a net profit for 2009.

Bloomberg reports that Oswald Gruebel dispatched a memo yesterday saying that the bank's net loss for 2009 will trigger UBS's bonus clawback mechanism for the first time ever.

In 2008 Bloomberg says UBS deferred CHF900m of bonuses to be paid in equal parts in 2010, 2011 and 2012 if the bank made a net profit. Given that UBS made a net loss of CHF2.7bn overall for 2009, this year's CHF300m sadly won't be paid.

However, it's worth bearing in mind that CHF2bn of that loss comes from an accounting issue: as its performance improved, UBS - like most other banks - had to register a theoretical cost for buying back its own debt.

A further CHF1.6bn of losses in the investment bank for 2009 were attributed to credit losses on 'reclassified financial instruments.' This also sounds slightly unfair, particularly as the bank would have made a net profit in the absence of these two items. However, analysts point out that if the losses hadn't shown up on 'reclassified financial instruments', they would have appeared anyway on the trading book.

"To be brutally honest, all banks are getting bonuses down," says Peter Thorne, an analyst at Helvea in London. "They need to prepare their people for the days when margins are reduced for good."

Draft law would allow German bank regulators to block or limit "inappropriately high" bonus payments. (BusinessWeek)

Varley says prop trading is inconsequential for Barclays. (Financial Times)

"Profitability in the banking sector is a pre-condition to profitability in the real economy." (DealBook)

Sants was tired of the long hours and lengthy commute from Oxford. (Financial Times)

BNP Paribas has hired 5 electronic trading specialists, and intends to hire more. (Financial News)

Jefferies hires three for financial sponsors, and intends to hire more. (MarketWatch)

Naguib Kheraj is leaving JP Morgan Cazenove next month. (Financial Times)

Rothschild is appointing Nigel Higgins, who joined as a graduate trainee, as its chief exec. (Financial Times)

Obama doesn't begrudge Blankfein or Dimon their bonuses. (BusinessWeek)

Hank Paulson thinks bankers earn too much. (Bloomberg)

Goldman's head of PR has taken up blogging. (Huffington Post)

Italian salaries shrank 4% between 2006 and 2008. (Bloomberg)

In the first year of the German occupation of Greece, austerity and "wage cuts" were imposed on the economy; at least 300,000 Greeks died of hunger. (Marginal Revolution)