UBS Adopts System of Yearly Account Revision for Analysts
Fred Lipman was recently interviewed by Dow Jones Newswires regarding UBS and their method to decrease risky investments. UBS is currently shifting their focus towards wealth management and away from high-risk investment banking.
"The concept of waiting a period of time to determine whether or not a person gets the money that has been accrued for them in order to see whether there has been excessive risk taking is going to become more and more popular," said Mr. Lipman, author of Executive Compensation Best Practices, a book on management pay.
This is how the new UBS system works: of the total bonus, only one-third is paid out immediately; the remainder is held in accounts to the following year, when another third can be paid out, though the account balance may rise or fall depending on a system of adding and subtracting points, which in turn is based on how UBS judges the employee's work.
However, many insiders agree that this system of yearly account revision could cost the bank their top talent.
“UBS Pay Move Shows Shift to Money-Management Arm” by Katharina Bart appeared in the Dow Jones Newswires on November 19, 2008.