Lunchtime Links: Actually, UBS may have cut compensation right back to salaries; 65% back office redundancies at one London firm

As we mentioned earlier, UBS doesn't seem to have cut compensation in its investment bank by as much as everyone was expecting.

Compensation per head at UBS's investment bank is down a mere 18% year-on-year, to CHF265k year to date. This is roughly in line with reductions elsewhere.

However, UBS has limited flexibility with regards to compensation costs because a particularly high proportion of personnel expenses in its investment bank (65% according to JPMorgan Cazenove) are comprised of deferred compensation from previous years and high salaries.

In 2010, average compensation per head in the investment bank was CHF400k, suggesting the fixed element of last year's compensation was CHF260k. This looks like the bare minimum UBS needs to accrue per head. Kitchen sinking post-Kweku may have driven accruals in Q3. UBS bonuses aren't assured yet.

Separately, somewhere in London is making vicious staff cuts. Step forward F&C Asset Management, which according to The Telegraph, wants to lay off 65% of its IT and back office employees and 33% of its corporate staff. Only 7% of fund managers are being chucked.

UBS has substantially increased the VaR in its investment bank in the past quarter. (Financial Times)

Morgan Stanley has swiftly promoted a FIG banker whom Goldman Sachs wished to poach. (Bloomberg)

Average pay rose tenfold from $2.8m (1.75m) in 1989 to $26m in 2007 because it was linked to ROE. If it had been based on ROA pay would have risen from $2.8m to $3.4m. (Guardian)

"Unlimited liability has a tendency to deter persons of fortune,

intelligence and respectability from becoming partners or managers". (Bank of England)

My first suggestion is to reconsider limited liability, at least for investment banks. The advantages of partnerships are very great. (Financial Times)

Justine McLucas, a former collateral management specialist at a UK bank, has set up her own pole dancing school. (Financial News)

There is a high health risk to wearing heels more than 3 inches. (Guardian)

The Beano is hiring. (FleetStreetBlues)