Discover your dream Career
For Recruiters
If you don't meet your targets due to the pandemic, you could always get them lowered.

Morning Coffee: UBS gets generous with compensation during the virus. Banker's WFH idyll has wifi issues

Banks are behaving atypically during COVID-19. For an industry with a reputation for making hair-trigger job cuts, most are showing extraordinary restraint. There have been no furloughs at major players; nor have there been many actual lay-offs. On the contrary, most banks have given employees assurances that they won't cut jobs during the pandemic - even if 'the pandemic' only means 'until lockdown ends.'

In theory, these job assurances will be offset by pay cuts. No one's said so explicitly, but there's a tacit understanding that banks can't simply suspend layoffs and pay generously, even if they did have a great first quarter in sales and trading. UBS, however, seems to be breaking this rule: CEO Sergio Ermotti sent staff an email on March 30 promising he wouldn't cut jobs; and now Ermotti is being generous with pay too.

UBS's investment bank is not the immediate beneficiary of Ermotti's benevolence, even though it registered a 242% increase in pre-tax profits in the first quarter and personnel expenses were up (implying higher bonuses accrued for the future). Ermotti is instead bestowing his generosity on the brokers in UBS's U.S. wealth management business, and they're not getting a pay rise so much as being spared a potential pay cut.

Before the virus, UBS was reportedly planning to impose stricter performance targets on its 6,000 U.S. brokers, who would have been required to generate $6m instead of $5m revenues as a team, and $3m instead of $2.5m as individuals in to qualify for special bonus payouts. These higher targets were always controversial: UBS first mooted them in December 2019 and was forced to delay their launch in January 2020 after complaints. The intention had then been to introduce them in July 2020 instead, but this has now been pushed back to October 2020 due to the pandemic. At the same time, UBS has annulled 2020 targets for its broker 'recognition council' and reverted to 2019 targets instead. UBS brokers get to keep their jobs and their pay.

In fact the brokers might not get paid anyway. The delayed 2020 targets are mostly a reflection of the fact that it's not easy being a broker when clients are wary of making investments and preoccupied with their health. In a memo accompanying the announcement of the delayed targets, UBS indicated that 2020 will mostly be a year of client-handholding (for which brokers don't get compensated) and suggested that it doesn't want to encourage aggressive brokers to push clients into making transactions in pursuit of bonuses. Even so, the bank's willingness to lower targets suggests the jobs guarantee isn't necessarily binary: it can be accompanied by leniency on pay. M&A bankers who fail to meet their targets for 2020 might expect similar treatment as the year progresses. 

Separately, just because something sounds good on paper, don't presume the reality will match. Jean-Marc Mercier at HSBC in London seems to have fallen foul of this rule when he decided to go and work at his holiday home during the pandemic.

Mercier, who has worked at HSBC since 2000 and is now vice chair of capital markets (after a stint as global co-head of debt capital markets), has his own chateau and 10 acre vineyard in France's Provence. You can see photos of Mercier's set-up here, including vines, sun terrace and turrets. When the virus struck, Mercier told Financial News he headed off to the 'Chateau La Sable' with the idea of working on his organic wine making business. Instead, he ended up working relentlessly. 

Rural France, however, is not well known for its internet coverage. Mercier told Financial News he has had concerns about wifi and mobile phone signals. "The level of internal calls has increased significantly because the information flow we usually have in the office is much harder [to access].” He's ended up working even longer hours than usual at the chateau. The vines may have to wait for another year.


HSBC is setting up a new mid-market UK M&A team run by Jacques Callaghan. It will eventually comprise 20 people. (Financial News

Zoom internships can enable students to do more internships than would otherwise be the case. One student did spring internships at Lazard, McKinsey, BNP Paribas and Deloitte. (Financial Times) 

Deloitte scrapped its summer internships altogether and offered £500 in compensation. (Financial News) 

Compliance monitoring software finds that people are cursing and complaining more while working from home. (Business Insider) 

Family offices piling into private lending. (Bloomberg) 

If you lost your job in finance, you could always get hired as a customs agent. The UK needs to hire 50,000 of them urgently to help with the paper work importing and exporting firms will need to complete after the U.K. exits the EU’s customs union. (Bloomberg) 

Financially contingent self-worth”  self-esteem based on financial success  can leave people feeling lonely and disconnected. (BPS Digest)

See Marco Argenti of Goldman Sachs playing his own cover of Times Like These. (Twitter) 

Have a confidential story, tip, or comment you’d like to share? Contact: in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

AUTHORSarah Butcher Global Editor

Apply for jobs

Find thousands of jobs in financial services and technology by signing up to eFinancialCareers today.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Latest Jobs