UBS bonus pool surges 14pc as European rivals cut awards
LONDON: UBS Group AG, which cut its securities unit to focus on wealth management, raised its bonus pool by 14 percent in 2015, leaving it the only major European lender to award bankers with higher compensation.
The bonus pool swelled to 3.5 billion francs ($3.6 billion) from 3.06 billion francs, the Zurich-based bank said in its annual report on Friday. Chief Executive Officer Sergio Ermotti, 55, remained the highest paid member on the group executive board, with a total compensation of 14.3 million francs, up 28 percent from 2014. His bonus jumped 37 percent to 11.5 million francs. UBS's disclosure comes after lenders across Europe slashed their bonus pools, with Deutsche Bank AG and Credit Suisse Group AG cutting variable pay by 11 percent. While some of Europe's largest lenders posted losses in 2015, hurt by a slump in trading revenue and costs tied to restructuring plans, UBS posted the strongest profit since 2010.
"It's easier to keep paying high performers well if you can afford to increase the bonus pool," said Andreas Venditti, an analyst at Vontobel. "When a bank is cutting, employees who aren't vital to the success of the business, have to take an even larger hit." Deutsche Bank, which houses Europe's largest investment bank, said earlier this month that it cut its bonus pool to 2.41 billion euros ($2.7 billion) after posting its first annual loss since 2008. The lender's co-CEO John Cryan, who scrapped dividends and announced plans to eliminate thousands of jobs, on Wednesday forecast another unprofitable year.
At Barclays Plc, total compensation costs decreased 6 percent to 8.3 billion pounds ($12 billion) in 2015, while the bonus pool dropped 10 percent. The London-based bank's securities business swung to its first quarterly loss in at least two years in the three months through December, as CEO Jes Staley seeks to shrink the unit and boost profitability.