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UBS maintains a cadre of roughly 100 key executives who outrank managing directors but aren’t part of top management. finews.com peeks behind the opaque scheme.

Three years ago, top executives including ultra-rich banker Josef «Joe» Stadler; domestic trouble-shooter Karin Oertli; Evidence Lab boss Barry Hurewitz; investigative head Emma Molvidson; and top Japanese private banker Victor Chang met for a twice-yearly confab overseen by CEO Sergio Ermotti near Zurich.

After a day of meetings, the executives, part of a cadre of influential bankers at the Swiss wealth manager in the rank of «group managing director,» or GMD, were grouped for a team-building event. The challenge? The bankers had to change a race-car tire (UBS is a long-standing sponsor of the Formula 1 racing circuit).  Caroline Stewart, now finance chief of UBS' investment bank, was on the winning team.

Elite Squad in Focus 

As ING CEO Ralph Hamers prepares to take the top spot at UBS in November, the elite squad is coming into clearer focus: the title was introduced in 2010, and ranks have swelled under current CEO Sergio Ermotti. Several sources report that the system «clogs the pipes» in decision-making – something Hamers will have to tackle when he takes over.

Now at more than 100, the executives form a kind of Praetorian Guard around the C-Suite, as one observer put it. For the most promising of the top executives, the GMD status is a way for the bank to illustrate the glide path into top management (like Markus Ronner, a stalwart who was elevated 16 months ago).

In for a Trim?

It would be natural for Hamers to begin trimming their ranks. Besides being numerous, they are costly: GMDs make up part of 675 key UBS risk-takers, a group that took home a cumulative $1.25 billion on pay and bonuses last year (or nearly $2 million on average). They outrank the ladder of associate directors, directors, executive directors, and even MDs.

Thanks to their status, the frequently well-connected GMDs can propel projects or ideas and mobilize resources even when times are tight. They are a powerful faction to woo because they wield great influence at UBS, which remains a hierarchically-run bank. Unlike vice-chairmen, a role considered a largely symbolic consolation prize, the GMDs are operationally active.

Perks for the GMDs like a private gym at one of the bank’s Zurich offices have raised eyebrows at home. The group is undoubtedly high-octane: part of the aim of designating a banker even more than a managing director is to keep them from defecting.