Category: Frederick Tung

Bonds in bank bonuses may be ‘important first step’

February 11th, 2013 in 2013, Frederick Tung, Globe and Mail, Newsmakers, School of Law 0 comments

Fred-TungGlobe and Mail
Frederick Tung, School of Law

It’s no longer a matter of real dispute that something went badly wrong in the culture inside banks in recent years…

Expert quote:

“Not only does it change incentives, but it changes who is going to be attracted to those jobs. You could imagine some turnover, and essentially a different kind of person who wants that job.”

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UBS Bonus Plan Gives Bankers Incentives to Take Less Risk

February 5th, 2013 in 2013, Bloomberg, Frederick Tung, Newsmakers, School of Law 0 comments

Fred-TungBloomberg
Frederick Tung, School of Law

UBS AG (UBSN)’s plan to pay part of top employees’ bonuses in bonds that can be wiped out will give traders and bankers an unfamiliar incentive: limit risk…

Expert quote:

“A bond has a fixed upside — they don’t get paid any more for taking big risks. If you substitute bond compensation for stock compensation, you essentially steer their incentives toward more conservative strategies.”

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