UBS Group AG lowered staff compensation for last year by 10% after its dealmakers saw income erode by a fall in mergers and capital raisings.
Chief Executive Officer Ralph Hamers got 12.2 million Swiss francs ($13 million) for his second full year in the role, a rise from 11 million francs a year earlier. The Zurich-based lender put aside $3.3 billion for staff incentives last year, down from around $3.7 billion, according to its annual report on Monday.
The compensation awards cap an inconsistent year for Switzerland’s biggest bank, with a nearly 50% decline in the business of advising on mergers and capital raisings countering advances in trading and inflows in wealth management. Hamers previously warned that incentives may be slashed if dealmaking didn’t come back. He noted in January that UBS had a “healthy culture of compensation for success,” albeit he didn’t see a need for a bidding war.
That’s in part because numerous Wall Street competitors who just a year before were still battling for talent have started to eliminate employment in anticipation of an economic downturn. Cross-town rival Credit Suisse is involved in a difficult reorganization that involves thousands of job losses and a spin-out of the investment bank. The business lowered the incentive pool for 2022 by almost half and stated the management board took nothing following its worst year since the financial crisis.
Some competitors, though, are still dishing out big hikes. Italy’s UniCredit SpA is going to enhance the pool for last year by 20%, possibly one of the most lucrative awards among European banks, Bloomberg reported. CEO Andrea Orcel, a former UBS investment banker, was handed a 30% salary boost after he got €7.5 million for 2022.
UBS excelled among worldwide rivals in its optimism that large-scale job layoffs witnessed throughout Wall Street can be averted. Cost constraints playing out in the business are especially intense for investment bank divisions.
Hamers had a huge setback in September when the bank revealed that it was backing out of an agreement to acquire American robo-advisor Wealthfront, an acquisition that was designed to broaden its reach to the lowest rungs of the rich there. Instead, UBS retrenched, claiming it would concentrate on its core high-net-worth client base.
Incoming Chairman Colm Kelleher received 4.8 million francs after taking over at last year’s annual general meeting. Axel Weber, who stepped down from that job in April after a decade, received 5.2 million francs, according to the study.
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