UBS fights to hang on to key staff UBS is paying out SFr300m ($328.7m) in long-term bonuses to its top bankers, as it fights to retain senior personnel following a $2.3bn trading scandal and a sweeping restructuring of its investment banking business. UBS said the so-called "special plan" awards, which were disclosed in Tuesday's annual results and will be awarded this year, will have strict forfeiture conditions attached. Only about 5 per cent of UBS's 17,000 investment bankers will be eligible and executives will have to remain with the Swiss group for three years before they can cash in the bonuses, according to people familiar with the plan. On average, each recipient would receive around SFr350,000 in deferred shares, although awards will vary significantly. UBS wants to minimise potential departures from its senior ranks after slashing the investment banking division's bonus pool by 60 per cent in 2011, in recognition of both weaker revenues and the $2.3bn in unauthorised losses allegedly racked up by a London-based trader last summer. At the height of the global financial crisis, hundreds of top bankers and traders left UBS for stronger rivals as the Swiss group edged close to collapse. "I don't see how compensation should stay the same or go up if profitability of the banking industry is going south," Sergio Ermotti, UBS's chief executive said on Tuesday. We're trying to strive for a situation in which both the shareholder and employee can have a win-win situation. He added that investment banking head Carsten Kengeter waived his right to a bonus for last year over the trading losses, which stunned the markets and forced the Swiss group to accelerate a planned overhaul of the struggling division. Across the group, UBS cut its bonus pool by 40 per cent, from SFr4.2bn to Sfr2.6bn. Within the investment bank, total pay costs fell from SFr6.7bn to SFr5.8bn but rose as a proportion of revenues to more than 63 per cent, from 56 per cent at the end of 2010. Having conceded that it will no longer compete across the board with top-tier rivals such as JPMorgan Chase and Deutsche Bank, UBS is scaling back the size and scope of its investment bank to focus on its core wealth management business.