The UBS bonus controversy has been making headlines for years, and it's essential to understand what's behind the fuss. The Swiss bank's generous bonuses to top executives have been criticized for being out of touch with the company's financial struggles.
UBS's financial struggles are well-documented, with a $21 billion loss in 2008 and a subsequent bailout by the Swiss government. The bank's poor performance was largely due to its involvement in the subprime mortgage market.
The bank's executives, however, continued to receive hefty bonuses, sparking outrage among employees and the public. In 2008, UBS's CEO, Marcel Ospel, received a $14 million bonus, despite the bank's financial woes.
The controversy surrounding UBS's bonuses has led to changes in the way the bank rewards its executives. In 2009, UBS introduced a new bonus system that ties executive compensation to the bank's financial performance.
Discover more: Bonus Tax Rate
UBS Bonus Controversy
UBS executives are considering cutting the group's bonus pool in an effort to recoup some of the $2.3bn it lost in the alleged trading scandal.
The bank's chief executive, Sergio Ermotti, has said there's no way bonuses will be unaffected by the trading loss, allegedly racked up by a low-level trader in London.
The decision could end up cutting the year-end pay and bonus pool within the investment bank by as much as 10 per cent.
The bonus pool is worth SFr4.6bn ($5bn) as at the end of September.
UBS claims that the trader, Kweku Adoboli, ran up more than $2bn in losses in a matter of weeks last summer by placing a small number of unauthorised bets on the future movement of various stock market indices.
The bank's previous approach, which meant that 90 per cent of the investment bank's SFr1.35bn of third-quarter revenues was set aside for pay and bonuses, was widely criticised by analysts.
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Frequently Asked Questions
What is the UBS employee referral bonus?
The UBS employee referral bonus is a reward of up to $3,000, equal to 5% of the referred candidate's starting base salary. This bonus is paid to employees who successfully refer candidates to open positions at UBS.
What is the UBS compensation plan for 2024?
In 2024, UBS offers a New Client Growth Award, awarding 1% of compensable T-12 to qualifying Financial Advisors who meet specific business growth and relationship requirements. This award aims to incentivize advisors to grow their business and build strong client relationships.
Sources
- https://financialpost.com/news/ubs-bonuses-at-risk-as-2-3b-loss-erases-profit
- https://www.vccircle.com/ubs-explores-cut-bonus-pool
- https://www.finews.asia/finance/40591-ubs-credit-suisse-bonus-payments-clawback-managing-directors
- https://frequentmiler.com/my-take-on-the-ubs-100k-bonus-offers/
- https://www.hartfordbusiness.com/article/ubs-reveals-new-tool-to-clawback-bonuses
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