UBS cuts Ermotti’s pay after French court blow, overhauls bonus scheme

Canada

Swiss bank UBS CEO Sergio Ermotti addresses a news conference in Zurich, Switzerland February 20, 2020. REUTERS/Arnd Wiegmann

ZURICH (Reuters) – UBS (UBSG.S) Chief Executive Sergio Ermotti cashed in less money in 2019 as the bank made pay concessions related to a French tax case and missed earnings goals during his last full year as CEO.

Ermotti, who is due to be replaced by ING (INGA.AS) head Ralph Hamers in November, was awarded a total 12.5 million Swiss francs ($12.8 million) in salary and bonus for 2019, down from 14.1 million francs the year before, the Swiss bank’s annual report showed on Friday.

UBS also unveiled an amended executive bonus system, incorporating metrics related to the French tax case which last year sparked shareholder ire, as well as shareholder and capital returns.

Performance awards for Ermotti and other executives were down 14% per head. New wealth management co-head Iqbal Khan got 8.2 million francs.

“In addition to underlying performance, the board of directors also considered other factors, including the impact of the French cross-border matter on the firm and the resulting share price development” in determining Ermotti’s pay, the bank said.

UBS came under fire over a conviction in France for helping wealthy clients evade taxes, with shareholders refusing to endorse the performance of the bank’s leadership and proxy advisers criticising management pay.

UBS denies wrongdoing and is appealing against the ruling that it pay 4.5 billion euros in penalties. A retrial at an appellate court is set for June.

UBS on Friday said 1.5 million francs of Ermotti’s 2019 bonus was “entirely at risk and subject to forfeiture” based on the final cost associated with resolving the French case.

It also said to achieve maximum payout of bonuses at senior levels, the group would need to achieve a three-year average return on CET1 capital of 18% and for total shareholder return to outperform a peer index by 25 percentage points over a three-year period.

Reporting by Brenna Hughes Neghaiwi; editing by Thomas Seythal and Michael Shields

Products You May Like

Articles You May Like

Prepare to study in Canada
Study permit: Who can apply
Newfoundland And Labrador Wants Its Provincial Canada Immigration Allotment Doubled
Boost PNP Slots For International Students, Conference Board Says
Hybrid Work Arrangements Becoming Popular As Canada Jobs Market Remains Tight
Express Entry candidates frustrated by new glitches in Canada’s immigration system
Toronto, British Columbia and McGill Named Among Top 100 Best Universities In World

Leave a Reply

Your email address will not be published. Required fields are marked *