The Swiss bank faces a raucous investor meeting because of a prolonged criminal process in France. UBS' board and top management are threatened with formal rebuke.
The Zurich-based wealth manager is set to be grilled by its shareholders at its annual general meeting in Basel on Thursday. Unusually, investors have not just the Swiss bank's pay report including a nearly $14 million payday for CEO Sergio Ermotti to criticize, but also his and Chairman Axel Weber's handling of a high-stakes criminal trial in France.
The fourth of ten points that UBS will ask its shareholders to approve is «Discharge of the members of the Board of Directors and the Group Executive Board for the financial year 2018». The vote – usually a formality and which more than 89 percent of shareholders waved through last year – exempts managers from liability for their actions.
Reminiscent of Crisis
Earlier on Thursday, Weber signaled he isn't expecting to clinch the majority needed, as finews.com reported. Weighty U.S.-based adviser Institutional Shareholder Services (ISS) teamed up with Swiss-based Ethos Fund to mount opposition in view of UBS' long-running French criminal troubles.
«This is of serious concern to shareholders», ISS said. The shareholder group said the «nay» on releasing board and management for 2018 is purely pre-emptive; a rejection would simplify any potential legal steps against members of the C-suite later. Ermotti and chief lawyer Markus Diethelm are the architects of a pugnacious legal strategy in France.
The last time shareholders denied UBS approval was for the 2007 financial year, when the bank posted a 4.4 billion Swiss franc ($4.3 billion) loss. It came perilously close again in 2011, winning only just 52.8 percent backing. Then, $1.8 billion in losses by rogue trader Kweku Adoboli marred UBS' year (it still closed with an annual profit of 4.2 billion francs and distributed a paltry 0.10 francs per share.
