Update: UBS Bonus Pool Deemed Unworkable
CNBC Anchor and Reporter
UBS's bonus pool for 2010 was so small as to be termed “unworkable” by a number of senior executives at the bank, and the payout has now been delayed as pleas are made to the UBS board of directors for the pool to be increased, according to people familiar with the situation.
UBS sent an internal memo to its employees this Tuesday informing them that notification of their bonus payments would be delayed one week from what was originally February 9 to February 16.
While the memo cited the reason for the delay as relating to the completion of performance reviews and the need for a “high quality payment process,” people close to the firm tell me the reason for the delay was simply that the pool was not large enough to ensure that UBS would be able to keep high performing employees.
“It was the number," explained one senior executive at the firm, who said the original size of the bonus pool would have left half of all the managing directors at the U.S. investment bank without any bonus at all.
UBS has increased salaries for its bankers, with a senior managing director making roughly $500,000 a year.
While the bonus pool was going to bring money to the top 30 percent of performers at the firm, the average performers, who comprise roughly 60 performers of the bankers, would have received virtually nothing.
“It was so low that we didn’t even preview it with our work force,” said another senior exec. “You can’t operate a bank that way if you expect to keep having enough employees to do the work.”
A spokesperson at the firm confirmed the delay in bonus notification, but offered no further comment. Bonus payments are scheduled to be made March fourth.
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