UBS Group AG cut employee bonuses for last year by 10% after its dealmakers saw revenue erode by a slump in mergers and capital raisings.
(Bloomberg) — UBS Group AG cut employee bonuses for last year by 10% after its dealmakers saw revenue erode by a slump in mergers and capital raisings.
Chief Executive Officer Ralph Hamers received 12.2 million Swiss francs ($13 million) for his second full year in the job, an increase from the 11 million francs a year earlier. The Zurich-based lender set aside $3.3 billion for employee bonuses last year, down from about $3.7 billion, according to its annual report on Monday.
The pay awards cap an uneven year for Switzerland’s largest bank, with a roughly 50% slump in the business of advising on mergers and capital raisings offsetting gains in trading and inflows in wealth management. Hamers previously warned that bonuses could be cut if dealmaking didn’t come back. He said in January that UBS has a “healthy culture of pay for performance,” though he didn’t see a need for a bidding war.
That’s in part because several Wall Street rivals that only a year earlier were still competing for talent have begun to cut jobs in preparation for an economic slowdown. Cross-town rival Credit Suisse is mired in a complicated restructuring that includes thousands of job cuts and a spin-out of the investment bank. The firm slashed the bonus pool for 2022 by about half and said the management board took nothing after its worst year since the financial crisis.
Some rivals, however, are still handing out large increases. Italy’s UniCredit SpA is set to boost the pool for last year by 20%, likely one of the most generous awards among European banks, Bloomberg reported. CEO Andrea Orcel, a former UBS investment banker, was given a 30% compensation increase after he received €7.5 million for 2022.
UBS stood out among global peers in its confidence that large-scale job cuts seen across Wall Street can be avoided. Cost pressures playing out in the industry where particularly acute for investment bank units.
Hamers faced a major setback in September when the bank announced that it was pulling out of a deal to buy US robo-advisor Wealthfront, a purchase that was meant to widen its reach to the lower rungs of the wealthy there. Instead, UBS retrenched, saying it would focus on its traditional high net worth customer base.
New Chairman Colm Kelleher earned 4.8 million francs after taking over at last year’s annual general meeting. Axel Weber, who stepped down from that role in April after a decade, earned 5.2 million francs, according to the report.
(Updates with chairman pay in final paragraph. A previous version of this story corrected the currency for the bonus pool.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.