UBS AG is introducing a pay scale aimed at making bonus money a smaller portion of overall pay, according to a memorandum seen Tuesday by Dow Jones Newswires.
"Fixed salaries at UBS should, in the future, be high enough that the variable portion can be adjusted from year to year, while still ensuring that the total compensation is in line with market standards," the memo said. It was first reported in Sunday's edition of Neue Zuercher Zeitung. A spokeswoman for the Zurich bank confirmed the contents.
"In the past … there was too much dependence on the variable component in certain parts of the financial industry. At UBS, the ratio of variable to fixed compensation was in some cases particularly high," the memo said.
UBS, which is under more scrutiny than Credit Suisse Group on pay because of more than $50 billion in writedowns on illiquid assets, follows its cross-town rival in changing how it pays its bankers.
Last week, Credit Suisse said it would more closely link pay to overall bank profitability and pay a greater portion of compensation in the form of fixed salary rather than bonuses.
Though the changes are not scheduled to take effect until UBS' most important businesses return to profitability, they come against a backdrop of intense pressure on banker pay.