UBS shareholders express much criticism of management salaries
Published: Wednesday, Apr 24th 2024, 15:50
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As expected, the high remuneration of UBS CEO Sergio Ermotti led to much criticism from small shareholders at the big bank's Annual General Meeting. Approval of the remuneration report was relatively weak. UBS management, however, expressed concern about demands for stricter capital regulations.
At Wednesday's Annual General Meeting, which lasted several hours, numerous speakers expressed their surprise and disappointment at the bank CEO's high salary. "The salary and bonus excesses continue unabated", complained one small shareholder. The fact that the UBS CEO will receive total remuneration of CHF 14.4 million for his nine-month term of office in 2023 had already led to much criticism in the political arena in recent weeks.
The representative of the shareholder association Ethos also referred to an adjustment of the benchmarks for the achievement of bonus targets: According to media reports in recent weeks, CEO Ermotti's total remuneration in 2023 could thus possibly even rise to as much as CHF 20.5 million. In future, UBS must clearly communicate how high the bonuses for the Executive Board will be, the Ethos representative demanded.
Difficult task
UBS Chairman Colm Kelleher, however, defended his CEO's remuneration: The Board of Directors was thus recognizing his "outstanding performance", he said, referring to the progress made in the integration of Credit Suisse, which was acquired last year. "Sergio Ermotti probably has the most difficult task in the financial sector worldwide," said the Chairman.
The proportion of votes in favor of the remuneration items nevertheless remained below the figures for most of the other items on the agenda at the Annual General Meeting. For example, the 2023 remuneration report was approved in a consultative vote with 83.5% of the share votes in favor.
The variable remuneration for the Group Executive Board for 2023 was approved with just under 90 percent of the votes, as was the remuneration for 2024 and a retroactive additional amount for the Board of Directors.
Numerous environmental activists
Numerous shareholders and activists also took the opportunity to vote on the bank's climate and sustainability policy. Although UBS has committed itself to a net zero target, it simultaneously supports companies whose business models are not compatible with these goals, criticized a Greenpeace representative.
Two activists who had traveled from the Philippines used the stage to draw attention to the environmental problems in their home country.
The sustainability report was clearly approved in a consultative vote with 93.4% of votes in favor. In his vote, Chairman of the Board of Directors Kelleher referred to the bank's ambitious sustainability goals.
UBS management against capital requirements
In their opening statements, both UBS Chairman Kelleher and CEO Ermotti defended themselves against calls for additional capital requirements for the only remaining major Swiss bank. UBS supports many of the recommendations made by supervisory authorities and expert committees, including those in the Federal Council's latest report on banking stability, said Kelleher. "Additional capital is the wrong remedy," he emphasized, however.
UBS CEO Ermotti also criticized the argument that UBS has an implicit state guarantee: this is "factually incorrect". He referred to the loss-absorbing capital of around 200 billion dollars held by UBS. "The risks of UBS are borne by the shareholders and by the holders of AT1 instruments and loss-absorbing TLAC bonds - not by the taxpayer."
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