UBS to Pay More Salary, Less Bonus to Some U.S. Managers
Senior field leaders and home office personnel at UBS Wealth Management USA are likely to see a revision of their pay before the year ends as part of their parent bank’s campaign to boost fixed salaries and reduce bonuses, according to a person familiar with the plan.
The changes will be retroactive to January 2020, according to the source, and are part of a compensation review across the Swiss banking giant. Fixed salaries for “senior employees” could increase by as much as 20% in a move aimed in part at satisfying European regulators’ skepticism about variable compensation and at matching European competitors, Bloomberg News reported earlier this week. The story did not address the policy change’s effect on U.S. employees.
European banks have long chafed at the variable compensation models of their U.S. retail brokerage arms, but the UBS changes will not affect its roughly 6,000 American brokers who will continue to receive a sliding-scale percentage of the monthly revenue they produce.
UBS remains committed to its “pay-for-performance philosophy” in the U.S. but is also respecting the need for “sustainable performance, growth and returns for our shareholders,” the person said.
“Our total compensation is competitive with our peers,” he said. “However, certain salary levels have had to be adjusted in order to remain competitive.”
Wealth management “field” managers typically derive around 60% of their annual compensation from bonuses related to hitting sales, recruiting, retention and other targets, said a former UBS Wealth Management USA branch manager, who was not familiar with the review. The manager speculated that the fixed salary component will now rise to 60%, and could be welcome amid the uncertainties of the coronavirus economy.
The changes will significantly affect pay calculations for UBS’s investment bankers, traders and asset managers in the U.S. who derive a large part of their compensation from bonuses that are multiples of their salaries.
“It’s in response to public perception, shareholder perception and regulatory perception, and it’s probably an intelligent move,” the former manager said.
UBS, which typically unveils annual compensation plan changes to U.S. advisors in December, earlier this month said it will offer an extra week’s pay to some 25,000 global employees in thanks for their performance during the pandemic. The bank also is allowing some senior employees who leave for a career change or retirement to immediately collect bonuses that were meant to be deferred.