Pay cut for UBS CEO — but he still takes home £10m

The chief executive of Swiss bank UBS (UBSG.SW) saw his pay package fall by 11% last year, but still took home millions of Swiss francs.

UBS said in its annual report, published on Friday, that CEO Sergio Ermotti was paid SwFr 12.5m (£10m, $12.5m) in 2019. That figure includes both salary and bonuses and compared with a total take-home of SwFr 14.1m in 2018.

Ermotti’s basic salary and pension contributions were steady at SwFr 2.8m but bonus awards fell by 14% to SwFr 9.7m.

UBS’s remuneration committee largely praised Ermotti but noted the bank “did not fully deliver on growth and return targets, in particular in the Global Wealth Management and Investment Bank divisions”.

UBS’s income fell 3% in 2019 to $28.9bn and operating profit fell 7% to $5.5bn.

Ermotti’s pay was also hobbled by an ongoing French tax case. UBS was fined €4.5bn in February 2019 after a French court found the bank guilty of helping clients evade tax. UBS is appealing the ruling, with a court date set for June this year.

UBS’s remuneration committee said it considered the impact of “the French cross-border matter on the firm and the resulting share price development” when deciding Ermotti’s pay award. SwFr 1.5m of his package is also dependent on the appeal and could end up being clawed back if UBS do eventually have to pay the fine.

The bank’s annual report showed that bankers across UBS face lower payouts this year. The total bonus pool shrank by 14% to $2.7bn, which the remuneration committee said reflected “our disciplined approach in managing compensation over business cycles and alignment to shareholder interests”.

Eromtti is set to step down as chief executive of UBS in November 2020 after 9-years in charge. He will be replaced by ING chief executive Ralph Hamers.