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Mark Zaino, a former UBS trader who worked on the firm’s derivatives and municipal securities desk, pleaded guilty to fraud and conspiracy charges today in the wide-ranging investigation into sham auctions and bid rigging in financial products sold to municipalities.
Zaino is the first banker to plead guilty to charges and he has agreed to cooperate with investigators. Another banker at Bank of America, who participated in the massive bid-rigging scheme, is also providing information to the Feds about the scam. Read more »
In the first real data point since the performance based compensation revamp at UBS, the bank today discussed quarterly earnings. While the exact components of the new formula remain a closely guarded secret, Dealbreaker’s analyst desk has crunched the numbers to shed some light on the Swiss giant’s compensation methodology and has concluded that there are strong correlations between performance and compensation at UBS.
Dealbreaker ran multiple regressions for quarterly compensation data (n=2) against quarterly performance data and now announces results for the following independent variables:
STAFFn = -45.833 (Each increase in headcount of -45.833 staff results in compensation expense increase of 1.00%)
PROFITb = -.0754 (Each CHF -.0754 billion of profit results in compensation expense increase of 1.00%)
CapGainDebt = -0.051 (Each CHF -0.051 billion of capital gains on debt results in compensation expense increase of 1.00%)
Given the planned headcount reductions of 1200, our consensus for compensation expense for Q3 is +26.182%.
UBS Performance Pay Rises Despite Sfr1.8bn Loss [Wealth Bulletin]