UBS Group reduces employee bonus while giving raise to the CEO

CEO Hamers had cautioned previously that bonuses could be reduced if the deal-making sector did not recover

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UBS Group AG reduced its bonuses for the previous year by 10 per cent due to a decline in revenue resulting from a drop in mergers and capital raisings. The bank allocated $3.3 billion to employee bonuses in the last year, a decrease from about $3.7 billion, according to its annual report released on Monday, reported Bloomberg.

While the employees are facing a decline in their bonus, Ralph Hamers, CEO, UBS Group AG, received a raise in his bonus from 11 million to 12.2 million Swiss francs. The raise given to Hamers is for his second year in the position.

Reportedly, the payment rewards mark the end of a mixed year for Switzerland’s biggest bank, which saw a decline of approximately 50 per cent in merger and capital-raising advisory activities, while trading and inflows in wealth management improved. Hamers had cautioned previously that bonuses could be reduced if the deal-making sector did not recover.

This is partly due to the fact that several Wall Street competitors who were still competing for skilled personnel just a year ago have begun to reduce their workforce in anticipation of an economic downturn.
Several rival banks based in Zurich, are also grappling with a complex restructuring plan that includes thousands of job cuts and the separation of its investment bank. For instance, Credit Suisse, reduced its bonus pool for 2022 by around half and stated that the management board received no payment after its worst year since the financial crisis.

However, there are some competitors, still offering substantial pay increase. According to Bloomberg, Italy’s UniCredit SpA plans to increase its pool for the previous year by 20 per cent, making it one of the most substantial rewards among European banks. Andrea Orcel, CEO, former UBS investment banker, was given a 30 per cent pay raise after receiving €7.5 million in compensation for 2022.

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