'I don't see how compensation should stay the same or go up if profitability of the banking industry is going south', so says UBS Group CEO Sergio Ermotti.
And the bank's 2011 total comp pot is down some 40% on the year before (to $2.8bn), with bonuses over at the investment bank down 60%.
Having said that, around 850 investment bankers are thought likely to be getting a little extra, as they will share in a 'special' bonus plan which will pay out $328m in restricted stock which vests in three years. UBS, which is busy restructuring its investment bank, has allocated these additional monies for retention purposes.
In the meantime, Bloomberg reports that UBS is considering moving what's left of its equity prop-trading unit over to the bank's asset management business. Firm CFO Tom Naratil said: 'We do plan to exit that business at the investment bank, however, we do think that the strategies that the proprietary equity team pursues would actually be attractive to asset management clients'. The move could affect up to 50 people.
Finally, The Wall Street Journal reports that, according to its sources, UBS is currently laying off around 35 employees in the Asia-Pac region, less than 0.5% of the bank's regional headcount.
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