The Swiss bank lifted pay for outgoing CEO Sergio Ermotti by more than six percent and granted its new CEO Ralph Hamers a $3.3 million bonus for four months of work.
Zurich-based UBS paid Sergio Ermotti 13.3 million Swiss francs ($14.4 million) last year, according to its annual report disclosed on Friday, from 12.5 million francs last year. The Swiss banker ran the bank from 2011 until October 31 and will preside Swiss Re.
«The board of directors recognizes that Sergio Ermotti successfully led UBS through a very challenging year marked by the Covid-19 pandemic,» UBS said in an excerpt of his performance assessment included in the report. All told, he has realized more than 60 million francs in pay in his nine years running UBS.
«Making Whole»
Ralph Hamers, who took over as CEO of the Swiss wealth manager four months ago, was paid 4.2 million francs, according to the report. At ING, Hamers earned 2.6 million euros ($3.1 million) in 2019, his last full year running the Dutch bank.
It is common knowledge that Switzerland pays better than wider Europe: Even after a big cut in 2019, Ermotti’s payday made him the top-earning CEO of a listed European bank. Hamers' UBS bonus last year – 3 million francs – alone is larger than his entire 2019 salary from ING.
«Ralph Hamers has launched a number of strategic initiatives, all with the aim of ensuring the continued long-term success of UBS,» the bank said.
UBS Wrong-Footed
The unexpected reopening of a criminal investigation into Hamers in the Netherlands puts the Swiss bank on the back foot: it desperately needs its new CEO's know-how to revitalize, but not with those plans effectively captive to the Dutch legal process, nor at the cost to its reputation, as finews.com reported last month.
UBS had to pay a modest 164,000 francs to «make whole» Hamers – or to compensate him for ING instruments and awards he abandoned to join the Swiss bank. By contrast, it paid Iqbal Khan 8.1 million francs to replace Credit Suisse awards when UBS poached him as private bank co-head in 2019.
Wall Street Calling
At Credit Suisse, ex-CEO Tidjane Thiam’s 12.65 million franc payday in 2019 made him one of Europe’s other highest-paid bankers, alongside Ermotti. The two ex-CEOS as well as a swath of other fellow finance chiefs like Jean-Pierre Mustier, Martin Blessing, Brady Dougan, and Xavier Rolet are getting in on a boom in blank-check vehicles dubbed SPACs (special-purpose acquisition company).
Banking also doesn’t pay well compared to private markets investing: Blackstone hiked co-founder and CEO Stephen Schwarzman’s payday by 20 percent last year to at least $610.5 million, according to «Reuters». Leon Black, co-founder and CEO of the private equity giant reportedly looking at the wreckage of Greensill, took home at least $185.2 million, the outlet reported.
