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CEO Wrestled Issue

Instead, Ermotti seems to have wrestled the issue from the board’s nomination committee – simply by tightly controlling or even sitting on the information of Orcel’s planned departure. A spokesman for UBS denied Ermotti overreached. «The initial conversations at the time were preliminary, private and explicitly requested to remain confidential,» UBS said.

«Later, when it became clear that a resignation was very likely but not definitive, the chairman and consequently the board were promptly informed, at least a week before the official resignation was announced,» UBS said. «Anyone indicating that the board had not enough time to respond, is intentionally misleading or ill-informed.»

Facing Investors

The episode nevertheless reveals diverging interests between the CEO and UBS' board. When Orcel and Ermotti first spoke about the Santander offer, UBS’ first investor day in four years was just seven weeks out.

If Orcel was going to leave, Ermotti presumably wanted the news out well ahead of the event, which was central to investors’ view of the bank’s stock. Santander and UBS both released statements on September 25, 2018 – a full month before the Swiss bank’s event.

Frosty After Singapore

The board was primarily concerned about what Orcel's exit meant for UBS' succession planning – and scrambled to try and hold onto him. The outcome is well-known: Orcel opted for Santander, but never made it to Madrid, and is now suing the bank for reparations. A Madrid court is poised to hear arguments in April.

Back at UBS, the kerfuffle in Singapore led to a perceptible chill between Weber and Ermotti. The debate over succession eventually abated, especially after UBS hired Iqbal Khan last autumn. At 43, Khan is young enough to credibly reinforce UBS’ succession plans.

The questions over Ermotti’s role in the bank’s succession planning remains – as Swiss daily «Tages-Anzeiger» (behind paywall, in German) speculates he would like to take the chairman spot at UBS in two years' time.-