UBS reveals lofty bonuses despite losses

UBS is coming under fire after significant payouts and bonuses for top brass were divulged for 2012 despite the bank’s 2.5-billion-franc loss.

UBS reveals lofty bonuses despite losses
UBS CEO Sergio Ermotti (right) received almost nine million francs in pay. Photo: UBS

In a compensation report issued on Thursday, Switzerland’s largest bank said it paid out 70 million francs to executive committee members, around the same as the previous year when it raked in a net profit of 4.2 billion francs.

CEO Sergio Ermotti, received a salary and bonuses of 8.9 million francs, up from 6.35 million francs in 2011, a year in which he spent less than four months as chief executive.

The bank said its total bonus pool for senior managers and staff fell by 27 percent in 2012 to 2.5 billion francs from 2.7 billion francs the previous year.

However, the number of employees also dropped significantly over the period after UBS last year announced a multi-year plan to shed 10,000 jobs.

UBS Chairman Axel Weber defended the pay packages due to what he called a “positive performance” at the bank despite the red ink soaking the financial sheets.

“We have in 2012 set a new course for the future of the firm and made good progress in solving problems related to the past,” Weber was quoted as saying by the German-language SDA news agency.

Weber, who was appointed chairman in May 2012, received total compensation of more than 4.2 million francs, including shares valued at over two million francs.

In its compensation report, UBS said the bank’s underlying performance was better than the net loss posted, noting more than three billion francs in goodwill impairments, plus 1.4 billion francs in fines and costs relating to the Libor rate-fixing scandal.

The report also highlighted the fact the bank’s shares rose 28 percent over the year.

Meanwhile, pay to top executives, including Ermotti, included deferred bonuses that will only be paid if the bank meets certain targets.

The impact has not yet been felt on an initiative, passed by voters in Switzerland earlier this month, that will require binding votes by shareholders of Swiss companies on executive pay.

The initiative also bans golden parachutes and payments paid to lure executives to join a company.

The compensation report reveals that UBS offered co-head of its investment bank Andrea Orcel almost 25 million francs in deferred cash and shares to lure him away from Bank of America/Merrill last July.

The payment compensates for benefits forfeited by Orcel for leaving Bank of America, UBS said.

The deferred payments will be paid in installments this year, in 2014 and in 2015.

Such payments appear to be banned under the population initiative spearheaded by Schaffhausen businessman and independent senator Thomas Minder.

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What are the penalties for breaking Switzerland’s coronavirus rules?

The Swiss Conference of Prosecutors (SSK) has adopted a uniform set of sanctions for non-compliance with the country's Covid-19 restrictions.

What are the penalties for breaking Switzerland’s coronavirus rules?
Police can fine those who break coronavirus rules on the spot. Photo by AFP

The fines will be the same throughout the country, regardless of the canton in which infractions occur.

“The aim of the SSK is to harmonise the application of the law in Switzerland as much as possible”, the organisation said on its website

It added, however, that the final decision “is up to the prosecuting authorities”.

These are the recommended penalties for individual offenders:

  • Avoiding quarantine or isolation: 1,000 to 1,500 francs
  • Not wearing a mask where it is compulsory to do so: 250 francs
  • Gatherings of more than 15 people in public: 100 francs
  • Avoiding medical supervision: 800 to 1,000 francs

For restaurant owners and organisers of events, the fines are as follows:

  • Serving food and drinks to people not seated at a table: 500 francs
  • Not having a health protection plan in place: 2,000 francs
  • Insufficient protection plan: 500 to 1,000 francs
  • Non-compliance with official health rules: 500 francs
  • Gatherings of more than 50 people: 2,000 francs


Other measures:

Earlier in December, the National Council put in place a range of changes to the Covid-19 regulation. 

As a result of the changes, police will now be able to issue on-the-spot fines for ‘mask refusers’, i.e. people who do not comply with the country’s strict coronavirus mask requirement, as well as to those who exceed limits on public meetings and do not respect social distancing rules.

READ MORE: Swiss police can now issue on-the-spot fines for mask refusers 

Previously, police would issue violators with tickets, which would then be forwarded to a magistrate, who would decide how high the penalty would be and whether it would indeed be imposed.

In practice, few fines have been handed out to individuals so far.

However, at least one case was reported by the media in November: a woman in Grenchen, canton Solothurn, was fined 1,500 francs plus 400 francs in administrative costs for breaking her quarantine.