UBS is increasing the base salary of senior bankers after reducing many bonuses sharply and to align overall compensation more closely with other financial services jobs, like consulting, people close to the matter told the New York Times.

The step is part of a bigger overhaul of UBS’s compensation system, the sources were quoted as saying. They spoke anonymously because the bank has not decided to publicly disclose the changes, the paper said.

A spokesperson for UBS declined to comment to WealthBriefing.

Banks and regulators around the world have been rethinking the pay structure at banks as they suffer huge losses. UBS cut bonuses for 2008 more than 80 per cent. Credit Suisse, scaled back its bonuses 44 per cent overall, with harsher cuts for senior managers.

Credit Suisse, UBS and Morgan Stanley also added clawback clauses to bankers’ pay agreements, allowing the banks to take back some pay from employees who fail to meet certain performance goals.

Any increase in base salary available to a managing director at UBS still depends on a performance review. But some salaries for senior bankers are being raised to about £300,000 from about £120,000, or to $429,000 from $172,000, still less than they earned when they received bonuses.

UBS, a bank that received state aid, said in November that its chairman, its chief executive and other members of the executive board would receive only salaries for 2008 and that all other employees would get lower bonuses.

Any increase in base salary would probably be the first for many UBS senior bankers. Until now, banks have tended to keep base salaries flat and use bonuses to increase pay; as a result, the annual bonus made up the bulk of a typical banker’s total compensation.