It’s been simply over a 12 months since UBS stepped as much as rescue Credit score Suisse from a debacle that might’ve tanked the complete world banking business.
Simply because the $3 billion deal to purchase Credit score Suisse was being finalized, UBS had another shock up its sleeve—the return of its former CEO Sergio Ermotti. He had turned UBS round in the past, so he was the pure selection to steer the difficult takeover of its distressed banking rival.
Previously 12 months, Ermotti made 14.4 million Swiss francs ($15.9 million), making him the very best paid European financial institution boss as he navigated UBS by the Credit score Suisse acquisition.
His predecessor, Ralph Hamers, made about $14 million in 2022 when he served as CEO, in line with UBS’s annual report launched Thursday.
Ermotti’s wholesome pay bundle is about towards a sharper enhance in general government board pay, up 30% from a 12 months earlier to 140.3 million Swiss francs ($154.6 million). However importantly, it’s contrasted with a 14% decline in bonuses for workers.
CEO pay and the rising hole between how staff are paid is a contentious topic, particularly within banking. In Ermotti’s case, he’s steering the financial institution by an enormous restructuring and difficult financial local weather. And the Swiss financial institution, in contrast to others regulated by the ECB, isn’t topic to a cap on banker bonuses.
This 12 months, the Swiss banking big’s exec pay was a lot greater than that of different European counterparts comparable to HSBC’s Noel Quinn and Santander’s Ana Botin, who nonetheless made double-digit tens of millions of {dollars} in government pay. Ermotti’s pay is barely about half of a few of his Wall Road friends comparable to Goldman Sachs’s David Solomon and JPMorgan’s Jamie Dimon.
“The board recognizes Mr. Ermotti’s excellent performance in a defining year in UBS’s history and strong progress in delivering on integration priorities,” UBS stated in its report.
Since Ermotti took over at UBS, the financial institution’s shares have surged 60%.
It’s been an eventful and difficult 12 months for the financial institution. A government-brokered deal to purchase the 166-year-old Credit score Suisse got here after a slew of small American lenders—together with Silicon Valley Financial institution—collapsed final March. The takeover concerned a large cull of as much as 30% of staffers as a part of the Credit score Suisse merger, and UBS stated final month that it was seeking to trim prices additional by $3 billion.
The acquisition has had a monetary toll as properly—UBS reported a web lack of $279 million within the final three months of 2023, marking its second consecutive quarterly loss. In its Thursday report, UBS warned that this 12 months will proceed to be difficult financially as the combination course of continues.
Swiss authorities have scrutinized UBS over its dimension following the Credit score Suisse rescue, as its almost twice Switzerland’s GDP. However the firm’s prime management has defended the deal saying it helped it develop and acquire extra market share moderately than jeopardize competitors.
It has solely been a 12 months since Ermotti returned to the financial institution he led between 2011 and 2020. However this time round, it’s a Herculean job in contrast to another.
UBS has already hinted that the boomerang CEO will keep on “at least until the completion of the integration process, if not longer.”
