The krona crisis is getting worse and UBS wants to pay individual employees around the world up to one fifth of a fixed salary. What’s behind it?
Ahead of the bonus season coming in February, UBS is adjusting the pay structure for individual stars. This was reported by the agency “Bloomberg” (Paid item) with reference to an internal bank check. This found greater differences in the fixed salaries of executives at the same level and relative to the competition.
As a result, the fixed salaries of individual senior executives from the ranks of the executive director to the chief executive officer will be increased by up to 20% retrospectively until January 1, 2020, as has been said. At the same time, however, the variable salaries (bonuses) of those concerned are decreasing.
Preventing fishing trips
The measure applies to all regions and sectors and is apparently primarily aimed at ending attempts to poach competitors.
UBS confirmed to the agency that it has selectively adjusted the wage level to remain competitive on the job market. However, the institute insists that increases due to bonus reductions are overall neutral with respect to wages.
The 2020 bonus pool is expected to be set in November. The largest Swiss bank reported an excellent third quarter result last week and paid employees below management level an additional weekly wage as a crown bonus. It will take over in early November Ralph Hamers the staff of the outgoing CEO Sergio Ermotti.
As has just been said, in today’s environment UBS employees should only be rewarded with bonuses for clear outperformance. Variable remuneration in the banking sector has been criticized for years; the reproaches became stronger with the crown crisis, especially in neighboring countries. In Europe, salary limits have been applied for some European banks since 2014.
At the height of the collapse of the Crown last March, the European Central Bank (ECB) warned eurozone banks to be “extremely reluctant” to pay bonuses this year. Credit Suisse CEO last March Thomas Gottstein It should be known that due to the crisis bank bonuses are no longer sacrosanct.
Will there be a transfer of European financial centers due to the Crown and Brexit?
Yes, London will lose much of its importance.
Yes, Frankfurt will emerge as the big winner.
There is a division between different cities.
Yes, Switzerland will become much more important.
No, everything remains the same.