Support for high-income earners: The price increase after the CS agreement earned UBS’s top management 136 million francs

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Sergio Ermotti, 63, earned 14.4 million francs last year during his nine months at the helm of UBS. The entire board of the nation’s only remaining large bank was paid $140 million; That’s 33 million more than in 2022.

Exorbitant wages lead to the formation of red heads in politics. Even Thierry Burkart (48) lashed out at Ermotti and Co.: “The brazen bonus excesses of some top managers are destroying the public’s confidence in the economy as a whole,” the chairman of the economically liberal FDP wrote on the text message service X.

UBS shares soar in 2023

But the pay rise is only part of the financial windfall for those in charge of UBS in recent months. The increase in value of UBS shares by more than 50 percent in the stock market within a year was at least as important for the wealth accumulation of senior executives.

UBS’s 16 Board members and 12 Board members held 15.3 million shares in their employers as of the end of 2023, according to the annual report published this week. This corresponded to a tax value of 399 million francs at the reporting date.

Profit thanks to government support

If the UBS share price had remained constant in 2023, the value of 15.3 million securities would be “only” 263 million francs. The price rally that hit UBS shares in the months after the CS takeover brought book profits of 136 million francs to senior bankers.

Some might say he deserved it; A successful person must also eat well. The problem with this view is that the huge book profits enjoyed by UBS bosses would have been unthinkable without the CS deal; but this only happened with government support.

The federal government, headed by Finance Minister Karin Keller-Sutter (60), took a risk of 109 billion francs to make the takeover possible. Another $100 billion came from the Central Bank for unsecured liquidity support.

In the end, UBS took over Credit Suisse for three billion francs, even though the company had recently been valued at 35 billion. Banking legend Josef Ackermann (76) said in an interview with Blick: “Mrs. Keller-Sutter gave a big gift to UBS.”

The big bank is defending itself against this interpretation of events, as is the federal government. Both highlight the risks and responsibilities UBS assumed through the acquisition.

This is an understandable argument. But one thing is certain: At least for UBS leaders, the CS takeover was well worth it.

Source :Blick