UBS Allows Staff Share Bonus Sale after 1 Year: Report
UBS, struck with billions of dollars of writedowns on subprime exposures, is trying to persuade investment bankers to stay with the company by allowing them to sell some of their share-based bonuses after just one year, the Financial Times reported.
In a report from London, the FT said UBS had upset employees by capping the cash portion of bonuses and announcing plans to pay the rest in stock.
UBS was not immediately available to comment on the report.
Investment bankers' cash bonuses are due to be slashed this year after the Swiss group's 2007 profits were wiped out by losses in the U.S. subprime mortgage market.
Citing sources close to the bank, the newspaper said UBS had told staff that they could sell the additional shares after 12 months rather than waiting for the usual three years.
The Swiss bank's depressed share valuation has made share-based bonuses more attractive than in previous years, the newspaper said.
UBS's efforts to hold on to staff highlight the challenge many investment banks face in rewarding and keeping staff after a year of huge fixed-income losses.
Banks in the United States and Europe have taken billions of dollars of charges on exposures to subprime mortgages -- loans made to borrowers with patchy credit histories -- after the value of mortgage-backed securities held by the banks plunged.