Bank of America Corp. and UBS AG, which eliminated jobs over the past two years as they received government aid, are luring rivals' bankers in London by offering higher base salaries — in some cases double, recruiters said.
UBS is offering managing directors in its securities unit base pay of as much as 300,000 pounds ($470,000), compared with at least 150,000 pounds last May, said three people with knowledge of the matter. Bank of America, Merrill Lynch's owner, raised London managing directors' base pay to about 230,000 pounds, from 150,000 pounds in 2009, said the people, who declined to be identified because the terms are private.
"Some of these firms were hemorrhaging talent, and those gaps are being filled in a hurry," said Simon Hayes, London-based head of financial services at Odgers Berndtson, a recruitment firm. "The likes of Merrill and UBS in London and elsewhere have been hiring very aggressively to deal with the losses of the previous 18 months."
Both banks are no longer taxpayer owned, leaving them free to set pay. The firms are targeting rivals still subject to pay limits. They are also hiring traders that moved to brokerages during the crisis. "In the world of investment banking, it's a simple case of who pays wins," said John Purcell, managing director of the London executive search firm Purcell & Co. "Institutions that are fairly directly under political control are facing significant difficulties retaining staff."
The banks would not comment on individual bankers' compensation.