UBS Gave Investment Chief $26 Million 'Golden Hello'
UBS paid CEO Sergio Ermotti almost $9 million and welcomed its new investment bank chief with a $26 million "golden hello" in 2012, the same year the bank announced plans to fire 10,000 staff in a cost-cutting drive.
Bankers' pay in Switzerland remains a heated issue five years after the near collapse of UBS in 2008, blamed by many on a culture of big bonuses driving bankers to make risky investments.
Investment bank chief Andrea Orcel, who is overseeing a radical restructuring of that operation in which 2,000 jobs are expected to go, secured a package worth 25 million Swiss francs, according to UBS's annual report on Thursday.
It comprises $6.364 million in deferred cash and deferred UBS shares worth 18.5 million Swiss francs ($19.44 million) at the grant date. The deferred cash and shares will vest in installments in 2013, 2014 and 2015.
The deal was designed to replace forfeited pay from his former employer, Bank of America Merrill Lynch, after he joined the Swiss bank in July 2012.
Details of the big payouts come barely a fortnight after Swiss citizens voted to give shareholders a binding vote on remuneration, representing the world's strictest controls on executive pay.
Ermotti was the Swiss bank's highest earner last year, pipping Americas wealth management division head Robert McCann, who was paid most in 2011. McCann earned 8.56 million francs in 2012, compared with 9.18 million in 2011.
Ermotti's pay is a 40 percent increase on 2011, but he only joined the bank in April of that year and was named CEO in November 2011 after a $2 billion rogue-trading scandal felled his predecessor, Oswald Gruebel.
The CEO's base pay was 2.5 million francs, with more than 6 million francs in bonus awards.
The news follows another turbulent year for UBS, which posted a full-year net loss after saying it would fire 10,000 employees and wind down large parts of its fixed-income business.
In December UBS said it would have to pay $1.5 billion to settle its role in a multi-year global rate-rigging scheme.
"Despite these developments, the group made significant progress under Mr. Ermotti's leadership," UBS told shareholders in its annual report. "He successfully led the firm in the implementation of its strategy."
UBS Chairman Axel Weber, whose 4 million franc signing-on fee sparked enough shareholder anger to garner a one-third opposition to the bank's overall pay scheme last year, earned 3.57 million francs in 2012.
UBS's shareholder meeting is on May 2.
Rival bank Credit Suisse is expected to disclose its top management and board pay on March 22.
UBS cut its overall bonus pool for 2012 by 7 percent to 2.5 billion francs and introduced a scheme under which bankers can be paid in a form of deferred financial instruments that are revoked if the bank's capital targets are not met.