Only 9 months in office: UBS boss Ermotti collects a monster bonus for 2023

For UBS boss Sergio Ermotti, the return to the big bank was also worthwhile in terms of salary. Overall, UBS’s top management and board members earned significantly more.

This is due to the additional work required to integrate Credit Suisse. However, the record profit in the billions as a result of the book profit as a result of the takeover did not play a role.

Ermotti took office on April 1, 2023 to orchestrate the integration of CS. In the nine months of 2023, he earned 14.4 million francs, according to the annual report published on Thursday.

Finally, always double digits

For comparison: his predecessor Ralph Hamers, who took over from Ermotti at the end of March, earned 12.6 million francs for a full year in 2022 as CEO of the major bank. UBS does not announce what the Dutchman earned in 2023.

Of the 14.4 million for Ermotti, 2.1 million consisted of the fixed salary and 12.3 million of the variable part of the salary. That was a record. His total remuneration was already more than 14 million francs and therefore comparable to 2023 in 2015 (14.3 million francs), 2017 (14.2 million) and 2018 (14.1 million).

The only time Ermotti’s total compensation remained in the single digits was in his first full year as head of UBS. In 2012 he earned ‘only’ 8.9 million.

Larger company management due to takeover

Hamers only succeeded Ermotti, who previously led UBS for nine years, in November 2020. From a management perspective, the implementation of the integration was apparently too big for Hamers.

It is clear that Ermotti’s return to the CEO post a year ago was only planned for a transition period. The Ticino resident will turn 64 in May. If the CS integration were completed by the end of 2026, he would be 66 years old.

The entire group management also earned considerably more in the year of the CS takeover. A total of CHF 140.3 million was paid out to management in 2023, compared to CHF 106.9 million in the previous year.

The additional work resulting from the restructuring increased performance bonuses for group management to a total of 108.3 million francs, compared to only 81.1 million in 2022. Because four additional top managers were added, such as “Integration Officer” Michelle Bereaux or CS CEO Ulrich granules. At the end of 2023, the management consisted of 15 members.

Board of Directors with more tasks

Colm Kelleher, who has been chairman of the UBS board since April 2022, will receive 4.7 million francs for his second year until the next general meeting on April 24, almost the same as last year.

However, the board of directors as a whole, like management, had more work and therefore earned considerably more. As a result, a portion (CHF 2.2 million) still needs to be retroactively approved by the shareholders.

In total, the twelve members of the supervisory board will receive 15.2 million for the period, including so-called subsidiary compensation. This is considerably more than the previous year with 12.6 million.

Loyalty is rewarded because of insecurity

The acquisition of CS also caused additional personnel costs through so-called ‘retention rewards’. These are payments made to employees to bind them to the company. These often occur during an acquisition to retain important key figures.

However, according to the bank, the retention bonuses of 736 million euros in 2023 amounted to only 3 percent of total personnel costs. Compared to the industry, this is relatively low for an integration of this size, UBS says.

The management and board members of Switzerland’s largest bank have also made huge sums from the shareholdings they have built up over their careers. Even though the UBS share price is under pressure on Thursday. However, in 2023 it rose by more than half and in 2024 it rose another 8 percent at the end of the evening. Just two days ago, shares hit a new multi-year high of 28.62 francs – making them worth more than they have been since 2008.

Ermotti is also the leader here: at the end of 2023 he had by far the most shares with 2.4 million shares. (saw/awp/sda)