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UBS Americas Tweaks Some Managers’ Comp: Raises Fixed Salaries, Cuts Bonuses

By Miriam Rozen October 29, 2020

UBS Americas has raised the fixed salaries of some senior and regional managers while also reducing their discretionary bonuses, a person familiar with the situation confirms.

After a “competitive market review,” certain salary levels were adjusted to “remain competitive,” the source tells FA-IQ in an email.

The source did not say how many managers would be impacted, how the firm determined which managers to include in the changes and by how much the salaries would be raised or the bonuses cut.

The “goal is to position all employees competitively with regard to salary and total compensation as applicable,” according to the source.

The source adds: “At the individual level, any shift of pay to one’s salary will be offset through a reduction in the discretionary performance award for comparable performance.”

UBS Americas's roughly 6,300 financial advisors will not get fixed salary increases, the same source says. At the same time, the advisors’ discretionary bonuses will not be reduced. Most of the advisors’ compensation is based on payout grid calculations that factor in the revenues each FA generates.

UBS declined to comment for this story.

A former UBS advisor, who asked not to be identified, said the UBS FAs to whom he has spoken are “infuriated” by the fixed salary increases of their managers.

The fixed salary increases are reducing the compensation risks of the managers, while most of the advisors’ compensation remains variable and at risk because it hinges on performance, the former UBS advisor says.

“UBS, being a global company, might be moving closer toward the international approach in financial services where there is a lower cap on the percentage of bonuses as a percentage of salary,” Andrew Tasnady, owner of compensation consulting firm Tasnady Associates, tells FA-IQ in an email response to queries.

UBS could also be adjusting the salaries of branch managers because of their significance “in attracting and retaining financial advisors,” Tasnady says.

The former UBS advisor says the UBS FAs are also frustrated by what they view as a cumulation of compensation adjustments helping all other bank employees except them.

Earlier this month, UBS also made a change in compensation that didn’t include UBS Americas advisors. UBS made collecting deferred compensation easier for certain employees who decide to leave the bank, but not for financial advisors in its Americas unit.

The former UBS advisor says UBS FAs have also taken note of a recent settlement between Wells Fargo and its former FAs.

In January, ex-Wells Fargo FAs won a $79 million class action settlement from that wirehouse after a three-year court battle over deferred compensation. The ex-Wells Fargo advisors alleged their former employer’s deferred compensation plan violated rules under the Employee Retirement Income Security Act of 1974.

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Tags:  Fees and compensation , Staffing and recruiting , Regulatory/legal issues , Tasnady Associates , Wells Fargo , UBS

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