Zurich and UBS: Equals in Profit, Different in Salary

Zurich overtook UBS in terms of its stock market valuation more than a year ago. But still, the top managers of the insurance company are getting a much lower compensation package than their colleagues at the bank.

In February 2019, Zurich insurance company for the first time was worth more on the stock market than the biggest Swiss bank, UBS. The company led by CEO Mario Greco since has extended its lead.

After the turmoil caused by the onslaught of the new coronavirus, the insurance company is worth about 57.6 billion Swiss francs ($61.5 billion), which compares with UBS' 39.3 billion francs. The shareholders of UBS have to contend themselves with a higher dividend yield of now more than 7 percent – rising steadily as the stock declines in value.

Moderate Compensation at Zurich

The complexity of managing a global bank or an equally global insurance corporation presumably is about the same. UBS in 2019 had a profit of $4.3 billion (down 4.7 percent from a year ago), while Zurich increased the profit by 11.6 percent to $4.15 billion.

With these numbers in mind, the compensation package awarded to the Zurich managers would appear fairly moderate in comparison with the UBS pay. The 11 executives received a total of 49 million francs, according to the annual report released on Friday. CEO Greco took the biggest package with a total of 9.3 million francs.

Missed Targets

The 13 executive board members of UBS in total earned 102 million francs. They received the double compensation compared with Zurich executives even though they failed to achieve their targets, were dealt a major blow in a legal case in France and having seen the stock price drop to levels not witnessed since the financial crisis.

The exact average compensation for the boards isn’t available because both firms made changes to the executive board over the course of the year. But at UBS, the total base salary of the executive board (28 million francs) was almost double that of Zurich’s executive board, where each member on average received less than 1 million francs.