Big pay increases at BofA/Merrill and UBS?
A rumour swept the market this week that BofA/Merrill had decided to increase the base salaries of its staff now that bonuses have become political. This is a sensitive issue, but the move – which I’m led to believe will be confirmed in April – is not surprising. Other tier 1 banks, including UBS, have, apparently done the same. “My mate at Merrill says people are leaving to go to tier 2 and 3 banks that are looking to upgrade,” was the way one source explained it.
UBS told the weeklyFiX that “they do not comment on compensation”; BofA/Merrill, which has had a few calls from the weeklyFiX in the past few weeks, also declined to comment.
It is a crude but necessary way of solving the bonus conundrum. Bankers have expected bonuses as part of their comp. This structure – which has been used in other industries to eliminate a bonus culture – solves part of that issue. But I would not want to be the communications experts explaining that to a rabid mass media.
I still think going back to a 35-hour week, having your card stamped everyday and getting overtime is a far more sensible solution.