Pictet offers equity to retain top executives

Pictet's decision to give 15 of its executives the chance to buy equity is a response to the hiring frenzy that has gripped the wealth management sector.

Ivan Pictet, senior partner, said: "This is a greedy market, which has increased the demand for talent. People are also finding it easy to find capital to set up their own business."

He succeeded his brother Charles as senior partner last year. He said his Geneva-based private bank had retained its strong record for retaining staff. But he agreed that it was important to take precautions against defections.

Several executives have made the case to Pictet's eight partners. It is likely that they will be able to buy equity at a discount to the €2.5bn ($3bn) at which the bank could be valued on the market.

Eleven of the 15 executives are being offered equity work in Pictet's private bank. Pictet is prepared to lend them money to help buy stock, which will bring them an economic interest in proportion to the sums of money they invest.

More equity will be made available next year. Pictet said: "It is also possible that we shall use equity to attract high-calibre people." The bank intends to keep a profit-sharing agreement for its staff which has been in force since 1921.

He stressed, however, that Pictet would not be bidding for a rival company. Nor does it need to a stock market listing: the bank's reserves are sufficient to cover capital twice over.

Pictet said the company intended to recruit 200 advisers this year on the back of a record rise in assets under management of €50bn, taking account of investment gains and business captures.

UBS recently revealed that its overall inflow of wealth and business banking assets was €40bn last year. Total assets of €1.5 trillion generated profits of €3.4bn.

UBS hired 1,460 staff in its Swiss and international wealth offices last year. It employs 803 client advisers, against 177 five years ago, and intends to maintain its hiring momentum.