It was only a matter of time before someone seriously did it. Claw-back provisions in bonuses at a bulge(esque)-bracket bank. You knew it was coming, but that makes it no less painful. No less painful at all. Even more dramatic, and prone to ignite a firestorm, is its retroactive application. Behold:

Just as bonuses (Latin for "good") are paid out for good performance, maluses ("bad") will be meted out if the bank subsequently makes losses or if the employee misses performance targets, UBS said. The maluses could wipe out all previously agreed share bonuses and two thirds of all cash bonuses under stringent new rules designed to align the interests of executives and traders with those of shareholders.
The Swiss bank announced plans for a complete overhaul of its pay system and disclosed that it was taking legal advice to see whether it could claw back previously paid bonuses from tarnished executives. That raises the prospect of UBS demanding and, if necessary, suing Marcel Ospel, its former executive chairman, for the return of millions of dollars of bonuses that he received before UBS collapsed into losses.

Before you get too worked up and start driving around with an Aimpoint topped M4gery carbine slung to your chest, playing Johnny Cash's "The Man Comes Around" set on "repeat" and sleeping in a bathtub nights, just remember that if this doesn't catch on, all the talent will drain away from Zurich and to some other, less radical bank. Here's hoping....
UBS turns bonus culture on its head to claw back millions from failing executives [Times Online]