Top Firm Ups Base Pay 50% To Stop Staff Defections

Bloomberg reports that UBS has upped the base salary of MDs across the board over at its investment banking unit by an average of 50%, as it tries to retain talent in the face of competition for its staff from rivals. More junior staff are also said likely to be in line for salary increases.

UBS Chairman Kaspar Villiger said in a weekend interview with Switzerland's Berner Zeitung that the pay increases were made in the face of staff quitting to go work for rivals firms. 'This has reached such an extent in the United States', he said, 'that it's making us think. We're also losing people to the competition in Switzerland, but not to such a dramatic extent. We have to react'.

A UBS spokesperson confirmed to Here Is The City that: 'There have been off-cycle salary increases at UBS Investment Bank to retain employees in critical positions. Companies across all industries, including banking, apply such practises to protect their businesses during challenging times by adjusting compensation to the market environment'.

In the meantime, Nomura is said to have been on the hire in the US. The firm has hired 135 investment banking staff there so far this year, and is mulling over a much larger push in the coming months - provided market conditions are right. The Wall Street Journal reports New York-based Naoki Matsuba, Nomura's global head of equities, who said: 'I am cautious about launching the second stage of our US expansion, because it would be a big, big operation, and I want to see more profits first. (But) the US is the missing piece in Nomura's plan to become a global investment bank'.

Finally, who said all German banks are boring ? The Journal's 'Heard on the Street' column reports that, in a lawsuit filing in New York, a former HSH Nordbank employee claimed that the bank's Park Avenue office 'is so completely permeated with affairs and sexual favouritism that female employees refer to the office as a 'bordello''. Since the accusations first surfaced, the office is said to have been flooded with internal transfer requests.