UBS is paying its top U.S. brokers more to try to get them to stay with the Swiss bank, while its forceful hiring practices have irked at least one competitor. 

It is a different sort of restructuring than bankers are used to: Americas head Tom Naratil won applause at a town hall meeting last week for his plan to revamp the unit, with one broker telling the «Wall Street Journal» that he «agreed with everything they did.»

The reason for staff's enthusiasm? UBS is streamlining its organization and easing off on recruiting efforts, while bolstering pay for its highest-producing brokers.

Considerably More Cash

The plan will see top performers take home more salary in cash beginning in 2017, which will lift them above many competitors, according to «Wall Street Journal» calculations. Those who bring in more than $1 million in fees will have the cash component of their pay lifted to 44 percent, from 43 percent currently. By contrast, at Merrill Lynch the cash component of that broker would be 42 percent.

Naratil freely admits the plan is aimed at keeping brokers happy and as a result, with the Swiss bank for longer.

His efforts represent an attempt to break the expensive cycle of quick-fire hiring and poaching that is commonplace among the U.S.' biggest brokerages, which also includes Morgan Stanley, Merrill Lynch and Wells Fargo.

No More Musical Chairs

UBS won roughly 70 brokers from Credit Suisse, at the expense of Wells Fargo, which bought the Swiss bank's U.S. brokerage operations. UBS was so successful in picking off brokers earlier this year – a practise it now seeks to stamp out – during the acquisition that Wells Fargo eventually conceded the deal hadn't been entirely successful.

For UBS, the hiring drive means that it has already largely hit its full-year recruitment targets, with its broker workforce at 7,100. That means it no longer has to play musical broker chairs can focus on retaining new brokers, while mothballing expensive recruiting schemes for the rest of the year.

Finra Complaint

It remains to be seen whether UBS' plan will succeed: broker culture is linked with fast moves between competing wirehouses, and even if the Swiss bank has preempted strikes from rivals, some brokers may prefer to set up their own shop instead of working for a bank.

UBS is also under threat from its aggressive recruiting following the Credit Suisse-Wells Fargo deal: a complaint lodged by Credit Suisse with industry supervisor Finra is still pending.