Morning Coffee: UBS bankers' controversial method of boosting bonuses. Non-banker celebrates appearance in "satirical" photoshoot

UBS has published its annual report, and with it, news of its bonuses for the last year. It says that overall 2025 bonuses at the Swiss bank were based upon the very standard considerations of "financial performance" plus things like "risk management" and "strategic objectives," while individual bonuses were decided by "individual, team, business division and group performance."  There is nothing unusual here.

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Bloomberg notes that the overall bonus pool at UBS was up 10% for 2025. The average bonus awarded to the 88,812 UBS employees who benefitted from this bonus pool was $48k. The average bonus awarded to UBS's 755 elite "key risk takers" was $1.41m ($300k higher than last year). And CEO Sergio Ermotti himself received $19m.

None of this is bad. Barclays' average bonuses for material risk takers for last year were $1m; HSBC's were $819k. UBS's senior bankers and traders can feel fortunate with their $1.4m. 

Next year, though things might be a little different. 

The Financial Times reports that UBS has discovered a way to juice bonuses for its wealth managers in 2026. However, it's an approach that comes at an awkward moment.

UBS has reportedly begun offering its bankers who sell private investments to wealthy clients a share of the performance fees those funds generate. So far, the agreement applies both to Carlyle's evergreen secondaries fund and to one of CVC's evergreen funds. In this way, UBS bankers are effectively in with a chance of earning carried interest.

While this sounds like a fine thing for the UBS bankers who get it, it may be less good for UBS' clients. Questions are being raised about the wisdom of inviting individuals to invest in illiquid private credit funds whose value is being questioned following incidents like BlackRock's 100% write down of a loan to an Amazon aggregator. Questions are also being raised about the impartiality of the UBS bankers who are incentivised to sell clients investments in some funds where they receive carried interest as a result, but not others. 

UBS says there is nothing to see here. External funds are recommended to clients, “based on our robust investment and due diligence process,” it tells the FT. “Fee arrangements are in line with market practices and are disclosed to clients,” it adds. Eyebrows are being raised nonetheless. 

The practice may become more common. As private equity and credit funds attempt to sell their investments to retail buyers, competition for access to those retail buyers has intensified. UBS's wealth managers may not be alone in receiving performance pay as an inducement to introduce their clients to funds with investments to offload. 

Separately, following last week's viral photoshoot involving two junior Goldman Sachs bankers, one junior Barclays banker and one PWC guy who wasn't a banker at all, but who works in data analysis and AI, the PWC guy has been talking to the Wall Street Journal and to Business Insider about how it all came to pass. 

Demarre Johnson of PWC tells the WSJ he turned up at a steak house for the photo shoot and was given some very fancy outfits by a stylist. This was all part of the provocation, Johnson said. “To say we’re entry-level associates but also putting us in multi-thousand-dollar watches is very satirical, so I can see how it added flames to the fire.”

Johnson also spoke to Business Insider, where he seemed quite positive about the furore following the photoshoot. Johnson has a TikTok account where he's posted about the event and notes that he's "viral on twitter." - "Controversy sells," he declares. It's not clear whether the Goldman and Barclays boyz are as enthusiastic about their new notoriety.

Separately...

Hedge funds paid their bonuses and now people are moving around. Daniel Mazur, Saaket Mehta, Steven Jozkowski and Adam Weitzman, who worked for Citadel’s equities trading business Surveyor, are moving to Millennium. (Bloomberg) 

Ken Griffin says: "“We would be open to the possibility of selling a minority stake in Citadel at some point in the future.” He also says a privater equity firm offered to invest $5bn in Citadel Securities and that this will enable it to stay private for longer. (Bloomberg)  

XTX executive Alex Gerko injected £387m of equity into Cromulon Capital, his family office. It is named after Cromulons, a species of planet-sized beings that are shaped like giant human heads in Rick & Morty. Gerko is keeping his money in the UK, despite taxes. (Bloomberg) 

Lloyd Blankfein says he hasn't moved to Miami for tax reasons. “I’m being very generous to New York State by remaining a resident even though I don’t spend all my time there.”  (The Times) 

Lloyd Blankfein on what to say when you're told off for interrupting in meetings. “I never held back my opinions. If I felt condescended to, which I often did, I would use humor to slash back at the offender. In a large meeting, I might talk over someone I disagreed with or ask too many questions too quickly. I was told I should listen to the answer before interrupting. I am listening, I said. I just hear faster than you talk.” (Bloomberg) 

Lloyd Blankfein says the thing that AI can’t really do is take risk. (YouTube) 

Some top end London homes are being sold at a loss. One four-bedroom flat in South Kensington, originally bought for £5.2m a decade ago, sold at the start of last year for £2.5m. (Telegraph) 

“Dubai has become a tax haven for middle-class expats to build their lives, and safety is a big part of the allure for them. Sure, you can walk around with a Rolex on, but now there is the worry of what may be falling from the skies.” (WSJ) 

Operating profit at Michael Page Group fell 60% last year. (ProactiveInvestors)

Nate Colley, a 19-year-old teenager who grew up on a Nova Scotia trailer park, is making $400k a month from a game he invented on the Roblox platform. (Bloomberg) 

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