UBS boss Sergio Ermotti collects record salary on his comeback
Published: Thursday, Mar 28th 2024, 13:21
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For UBS boss Sergio Ermotti, his return to the big bank has also paid off in terms of his paycheck. The top executives and board members of UBS earned significantly more.
This has to do with the extra work involved in integrating Credit Suisse. However, the record profit in the billions due to the book profit from the takeover did not play a role.
Ermotti took office on April 1, 2023 to orchestrate the integration of CS. In the nine months of 2023, he earned CHF 14.4 million, according to the annual report published on Thursday.
Recently always in double figures
By comparison, his predecessor Ralph Hamers, who handed over to Ermotti at the end of March, earned CHF 12.6 million for a full year as CEO of the big bank in 2022. UBS does not disclose what the Dutchman earned in 2023.
Of the 14.4 million for Ermotti, 2.1 million made up the fixed salary and 12.3 million the variable part of the salary. That was a record. However, his total remuneration also exceeded CHF 14 million in 2015 (CHF 14.3 million), 2017 (CHF 14.2 million) and 2018 (CHF 14.1 million), which is similar to 2023.
The only time Ermotti's total remuneration remained in single figures was in his first full year as CEO of UBS. In 2012, he earned "only" 8.9 million.
Larger Group Management due to takeover
Hamers only succeeded Ermotti, who had previously led UBS for nine years, in November 2020. From the perspective of the Board of Directors, the implementation of the integration was apparently too big for Hamers.
It should be clear that Ermotti's return to the CEO position a year ago is only planned for a transitional period. The man from Ticino will be 64 in May. If the CS integration is completed by the end of 2026, he would therefore be 66 years old.
The entire Group Executive Board also earned significantly more in the year of the CS takeover. A total of CHF 140.3 million was paid out to the Executive Board in 2023, compared to CHF 106.9 million in the previous year.
With the additional work resulting from the restructuring, the performance bonuses for the Executive Board rose to a full CHF 108.3 million after just CHF 81.1 million in 2022. This is because four additional top managers were added, such as Integration Officer Michelle Bereaux and CS CEO Ulrich Körner. At the end of 2023, the Executive Board comprised 15 members.
Board of Directors with more tasks
Colm Kelleher, who has been Chairman of the Board of Directors of UBS since April 2022, will receive CHF 4.7 million for his second year until the next Annual General Meeting on April 24, almost the same amount as last year.
However, the Board of Directors as a whole had more work to do, as did the Executive Board, and therefore also earned significantly more. As a result, a portion (CHF 2.2 million) still has to be approved retroactively by the shareholders.
The twelve members of the Supervisory Board are to receive a total of 15.2 million for the period, including subsidiary fees. This is significantly more than the previous year's figure of 12.6 million.
Loyalty bonuses due to uncertainty
The CS takeover also resulted in additional personnel costs due to so-called "retention awards". These are payments made to employees in order to bind them to the company. These are common in a takeover in order to retain important key personnel.
However, according to the bank, the retention bonuses of 736 million accounted for just 3% of total personnel costs in 2023. Compared to the rest of the industry, this is rather low for an integration of this size, says UBS.
The members of the Executive Board and Board of Directors of Switzerland's largest bank have also earned a lot from the shares they have accumulated over the course of their careers. Even if the UBS share price is under pressure on Thursday. However, it rose by more than half in 2023 and a further 8 percent in 2024 by the end of the previous evening. Just two days ago, the shares reached a new multi-year high of CHF 28.62 - and were thus worth more than at any time since 2008.
Ermotti is also the frontrunner here: at the end of 2023, he held by far the most shares with 2.4 million.
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