(July 17 – 14:50 ET) – The Wall Street Letter is reporting that PaineWebber’s brokers are ticked off about the lack of payoff for them in the proposed UBS buyout.
The deal’s announcement promised US$875 million worth of retention compensation in cash and stock to be split in an undisclosed way between top PaineWebber executives and brokers. But rather than any sort of cash payout the brokers will be included in an equity plan that executives promise will “set the standard” for the industry. WSL says UBS promises that more than half the compensation will go to brokers, but it refuses to specify how it will be paid out and to whom.
“[PaineWebber] should have held off until they could tell us exactly what we’re getting,” one broker is quoted as saying, “everybody was thinking that they’re going to get cash up front, and then [they] said no, you’re not getting anything. Now everybody is irritated and unhappy.”
Disgruntled PaineWebber brokers are reportedly testing the waters with other firms to see what sort of recruiting bonus they could expect to move elsewhere. Similarly the handful of retail brokers already at UBS are upset to be merging with the down market PaineWebber, according to WSL.
-IE Staff