The Financial Times reports that UBS is looking at capping bankers’ bonuses as the Swiss bank joins its European peers in cracking down on remuneration schemes following regulatory and investor pressure.
Here Is The City understands that the UBS's board is of the opinion that the world has changed, and that they can't simply wait until regulators and policy makers impose a new pay system upon them. In the brave new world post the financial crisis, banks will need to be proactive on compensation and take investor's feedback seriously.
A compensation cap is just one option UBS will consider. Nothing has yet been decided, and what is likely to emerge is a balanced scheme.
UBS is one of a number of firms looking to tackle the 'pay issue'. Anshu Jain, the co-CEO at Deutsche Bank, confirmed this week:
'The payout ratio, it's got to go down. Employees must make their contribution....Compensation practices are one important way to achieve behavioral change and align incentives to longer-term sustainable performance on behalf of all stakeholders'.
Deutsche has, however, already ruled out a cap on pay. Jain said: 'We are part of a competitive environment. One size fits all doesn’t make sense'.
The Wall Street Journal reports that Barclays' incoming chairman, David Walker, Wednesday told a U.K. government commission that bank-sector pay is set to come down as returns shrink and shareholders demand a larger share of rewards.
In the meantime, CityAM reports that Deutsche plans to slash infrastructure spending, which could see jobs shifted from expensive locations like London to low-cost sites in Mumbai, the bank’s COO told investors yesterday.
Finally, Bloomberg reports that Moore Capital Management, the $15bn hedge fund run by Louis Moore Bacon, cut 10 to 15 investment jobs as it restructures one of its equity teams, according to three people with knowledge of the matter.
The portfolio managers and research analysts were let go on Sept. 11, said one of the people, who asked not to be identified because the information is private. Patrick Clifford, a spokesman for New York-based Moore, declined to comment.
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