UBS dangles US$40,000 bonuses to slow junior banker defections

Hong Kong

UBS Group will pay a US$40,000 one-time bonus to its global banking analysts when they are promoted, doubling what some competitors are offering, as lenders seek to reward and retain younger employees weighed down by a surge in business and a prolonged work-from-home grind.

Starting as soon as this month the Swiss bank will pay the sign-on bonus to analysts promoted to associates on top of any regular salary increases, said people familiar with the move who asked not to be identified because the information is private. The amount represents about 30 per cent of the annual base pay of a newly promoted associate, one of the people said.

Banks are raising pay for junior employees to prevent defections and ease discontent amid a jump in deals and an intensifying focus on work-life issues sparked by the pandemic. Wall Street was set abuzz earlier this year by a leaked presentation from junior analysts at Goldman Sachs that detailed their gruelling workload and punishing hours.

A Hong Kong-based spokesman at UBS declined to comment.

UBS is upping the stakes, offering one-time bonuses that are double the amount that Credit Suisse and Wells Fargo have agreed to give their junior bankers. Other lenders such as HSBC are also moving to raise pay and shortening the path to promotion, while Houlihan Lokey has even offered some workers all-expenses-paid vacations.

At the same time, UBS is cutting jobs. The Swiss lender said last month that it is taking a US$300 million restructuring charge, which includes costs to cut jobs across different regions and business divisions. The bank declined to give specific numbers.

But banks are also beefing up staff to avoid burnout. JPMorgan Chase said last month it plans to add almost 200 staff, joining Goldman Sachs and Jefferies Financial Group in boosting headcount. BLOOMBERG