UBS Group AG cut bonuses for last year by 10% after its dealmakers saw revenue erode by a slump in mergers and capital raisings.
Chief Executive Officer Ralph Hamers received 12.2 million Swiss francs ($13 million) for his second full year in the job, an increase from the 11 million francs a year earlier. The Zurich-based lender set aside $3.3 billion for employee bonuses last year, down from about $3.7 billion, according to its annual report on Monday.
The pay awards cap an uneven year for Switzerland’s largest bank, with a roughly 50% slump in the business of advising on mergers and capital raisings offsetting gains in trading and inflows in wealth management. Hamers previously warned that bonuses could be cut if dealmaking didn’t come back. He said in January that UBS has a “healthy culture of pay for performance,” though he didn’t see a need for a bidding war.
The reason for Goldman Sachs’ bumper bonuses is partly due to the fact that some of its Wall Street competitors, who were competing for talent just a year ago, have started cutting jobs in anticipation of an economic slowdown. Credit Suisse, which is located in the same city, is currently undergoing a complex restructuring that involves cutting thousands of jobs and spinning off the investment bank. The company has reduced its bonus pool for 2022 by about 50%, and the management board received no compensation following its worst year since the financial crisis.
Some rivals, however, are still handing out large increases. Italy’s UniCredit SpA is set to boost the pool for last year by 20%, likely one of the most generous awards among European banks, Bloomberg reported. CEO Andrea Orcel, a former UBS investment banker, was given a 30% compensation increase after he received €7.5 million for 2022.
UBS stood out among global peers in its confidence that large-scale job cuts seen across Wall Street can be avoided. Cost pressures playing out in the industry where particularly acute for investment bank units.
