Former UBS executives return bonuses
Previous board head Peter Wuffli declined the SFr12 million he was contractually entitled to while former board members Marcel Ospel, Stephan Haeringer and Marco Suter returned or waived an additional SFr33 million. A number of other former senior executives declined SFr22 million in salaries and bonuses.
"I would very much like to see more bonuses waived or returned in the interest of the bank. I am therefore continuing to hold discussions on the topic," Kurer said.
On November 17, UBS announced changes to its compensation system aiming to ensure that long-term and sustainable goals are emphasised as much as possible. While a combination of a fixed and variable compensation will continue to be used for most employees, the chairman will no longer receive bonus payments so that he can assess the board's compensations without conflict of interest.
From 2009, management salaries will be comprised of a fixed component, a variable cash component and a variable equity component. The variable cash component will be based on a bonus/penalty system with money deducted due to bad results or unfavourable events.
The equity component will also be subject to conditions; shares will not be transferred to the employee for three years, and the amount finally received will depend both on UBS' earnings and how its return on equity compares to other financial services firms. To encourage long term stability, members of the bank's management will be required to hold shares for a longer period of time before selling them.
Investors will have a greater say in compensation, with bonuses decided upon in a consultative way.
In October 16, the Swiss government stepped in to bail out UBS and took on up to $60 billion in illiquid assets. UBS said the move would give it Tier 1 capital of 11.5% by year end, and conversion of the debt held by the Swiss government would leave it with a 9.3% stake in the bank.
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