FRANKFURT/ZURICH Investment banking stars at UBS and Deutsche Bank eclipsed the bonuses of their bosses as pay rebounded last year, despite enduring criticism from politicians.
Most top U.S. and European banks increased pay for staff, despite public anger that bankers are being rewarded just two years after the industry needed taxpayer bailouts.
Although bonus pots were often curbed where revenues fell, variable payouts still formed the bulk of compensation at UBS and Deutsche, and salaries are still on the rise.
Deutsche Bank investment banking chief Anshu Jain earned 12 million euros ($16.7 million) in 2010, more than the 9 million euros earned by his boss Josef Ackermann and surpassing the 2010 pay of heads of German blue chip companies disclosed so far.
At Swiss rival UBS, a similar pattern emerged where investment bank head Carsten Kengeter was awarded 9.3 million Swiss francs ($10.1 million) in pay and bonuses, including variable compensation of 8.4 million francs.
Kengeter was paid less than in 2009 after the patchy performance of the Swiss bank, which prompted UBS CEO Oswald Gruebel to forego his 2010 bonus.
It is not unusual for star bankers to earn more than the CEO, but this has only become clear at Deutsche since Jain had to disclose his pay after joining the management board in 2009.
Jain, a cricket fan who grew up in India, is a rising star at the bank and is considered a possible successor to Ackermann even though he is not a fluent German speaker.
In Britain -- where the anger over bonuses still burns stronger than elsewhere -- HSBC and Barclays also paid their investment bank chiefs more than their bosses.
MIDDLE RANKS SQUEEZED
New regulations in Europe have caused shifts in bonus structures, restricting the amount of upfront cash and increasing the portions of deferred pay.
Jain's salary was 1.15 million euros, with the rest awarded as part of restricted equity awards, and equity upfront awards.
Deutsche said its investment banking bonus pot came in at 3.5 billion euros, lower than 2009. UBS said its bonus pool would be 4.2 billion Swiss francs, around 11 percent down on the year. Bonuses still make up more than half of total remuneration at both units, however.
UBS introduced a new compensation rating system last year as it comes under pressure to cut costs, as its compensation ratio is higher than the industry average.
"There is little downside flexibility on pay with current staffing levels, so the improvement of the cost ratio has to come from revenues," said Piers Brown, analyst at Evolution.
The UBS and Deutsche CEOs were paid less than their peers at Goldman Sachs and JP Morgan Chase & Co, where payouts for the top brass caused little public uproar this year.
Goldman chief Lloyd Blankfein was awarded $12.6 million of restricted stock in addition to his salary of $2 million and JPMorgan CEO Jamie Dimon was awarded stock and options that could be worth $17 million.
(Reporting by Edward Taylor, Alexander Huebner and Arno Schuetze, Martin de Sa'Pinto, Steve Slater, Sarah White; Editing by Louise Heavens)
($1=.9243 Swiss Franc)