UBS Shareholders Protest Executive Pay, Including That Of Incoming Chairman

By Katharina Bart

ZURICH, May 3 (Reuters) - UBS became the latest bank to face the anger of its shareholders over executive pay on Thursday, as investors queued up to voice their complaints in a packed meeting that echoed recent protests at Credit Suisse and Barclays.

"Big banker pay hasn't been tamed at all. It's as though UBS hasn't learned any lessons at all from the past crises," Brigitta Moser-Harder, a small investor, told Reuters on the sidelines of the meeting attended by around 3,400 shareholders.

Moser-Harder was among more than two dozen shareholders signed up to address the meeting and said she would vote against UBS's pay plan, which the bank will put to a non-binding shareholder vote.

Anger is rife in the population at large over multi-billion dollar pay deals in an industry whose excesses were at the centre of the recent global economic downturn, and now shareholders are also becoming more vociferous.

Last week, nearly one third of Credit Suisse investors opposed the bank's pay levels, while 26.9 percent voted against salaries for top executives at Barclays.


Swiss shareholder groups Ethos and Actares are urging investors to vote down what they see as excessive pay packages at UBS, including that of former Bundesbank head and incoming chairman Axel Weber.

A rebellion by a large group would be a relative novelty in Switzerland where vocal criticism of companies more commonly comes from small retail shareholders.


SENDING A SIGNAL

Evidence of recovery at UBS's flagship private bank and 4 percent rise in the stock price on Wednesday may stave off some shareholder anger.

But Ethos, influential because it makes recommendations for Swiss pension funds, is particularly incensed over Weber's deal, which includes a 4 million Swiss franc ($4.40 million) signing-on bonus.

"The Ethos Foundation urges shareholders to exercise their voting rights at the May 3 shareholder meeting in order to send a signal to the board of directors regarding the remuneration system and the inadequate system of internal control," it said.

Weber is set to become chairman ahead of schedule when Kaspar Villiger steps down a year earlier than planned following a rogue trading scandal, another issue likely to be raked over by shareholders.

UBS, which ended 2011 with roughly 200 more employees on the year, cut its bonus pool by 40 percent to 2.57 billion Swiss francs. Investment banking chief Carsten Kengeter agreed to forgo his 2011 bonus after the trading scandal. As a result, UBS does not have to reveal Kengeter's pay.

But shareholders may bring up the hiring of Andrea Orcel, Bank of America Merrill Lynch's top European dealmaker who reportedly earned $34 million at that bank at the height of the financial crisis in 2008.

Orcel will co-run UBS's investment bank with Kengeter. The details of Orcel's pay package with UBS are not public knowledge.

With 9.2 million Swiss francs, U.S.-based brokerage head Robert McCann is UBS's top earner, beating Chief Executive Sergio Ermotti, who earned 6.4 million.

That compares with Credit Suisse boss Brady Dougan, who saw his pay more than halved to 5.8 million francs amid a 41 percent tumble in the bank's stock.

Neither Villiger nor Ermotti addressed criticism over pay in their remarks to shareholders.

Comments

[dvmweb1984]

08:16 PM on 05/03/2012

I don't know, I am not greedy but if I was offered 5 or 10 mill dollars would I take it? Would I care what others thought? Yes, and, probably not. Just remember they are the people that got us into this mess, that they ARE greedy and don't give a damn what you or I think. Take the money and run.

[IDIOTA]

01:19 PM on 05/03/2012

When you give a dog a steak, then kibble is no longer appealing.

[pinetrale]

01:10 PM on 05/03/2012

Until CEO pay drops significantly we haven''t bottomed yet as nothing has been learned or reset. We are all watching now.

[ema123]

01:27 PM on 05/03/2012

Bank of America Merrill Lynch's top European dealmaker who reportedly earned $34 million at that bank at the height of the financial crisis in 2008. AT THE HEIGHT OF THE CRISIS!!!! Meryll Lynch was acquired for pennys on the dollar - no wonder they had to be sold to BofA.

[pinetrale]

02:02 PM on 05/03/2012

To me its as sick and twisted as anything that goes on these days. no concience. no propriety. just hog greed.

[robnelsong]

01:01 PM on 05/03/2012

"When your car you're losin', and sadly your cruisin',
I'm a jolly banker, jolly banker am I.
I'll come and forclose, get your car and your clothes,
Singin' I'm jolly banker, jolly banker am I."

- Woody Guthrie

[rtgmath]

12:54 PM on 05/03/2012

The Banks have never admitted to doing anything wrong to begin with. Grievances about the excesses in their pay structure have always been met with incredulity. How can anyone complain about their pay. They are BANKERS! They earn *their* money the old fashioned way -- they make bets with *your* money. If they win, *they* keep the profits. If they lose, *you* take the loss.

Never admitting fault means not having to learn any lessons. Pay for the Players will ever increase, draining profits from the banks and corporations. The Players will continue to protest any and all regulations over their behavior. They know best how to increase their wealth! Regulations just get in the way.

The Big Banks need to be broken apart. Banks which refuse to break up should be nationalized. The Bankers and Players need to be out on the street looking for gainful employment.

[pinetrale]

01:11 PM on 05/03/2012

If big banks didn't ;have such incredible leverage, they wouldn't be able to pay their ceo's and their management teams nearly as much.

[ema123]

01:29 PM on 05/03/2012

No they had the bailout money, and Gietner to go easy on them

[Buckeye54]

01:53 PM on 05/03/2012

The easiest way to limit the size of the Big Banks is by regulation: have the FDIC say that it will not insure funds in any bank that has assets beyond X-billion dollars.

In other words: grow as large as you like. The government will not limit you, because it favors capitalism. But it will no longer underwrite you: in other words, if you grow beyond a certain size, the government will not insure your depositor's accounts. You will either have to find someone else to insure them, or conduct yourself in such a way that your customers are not afraid to deposit their money with you.

[realitybaby]

12:51 PM on 05/03/2012

why do the boards treat these guys like they are curing cancer -- they dont deserve the money!

[ema123]

01:29 PM on 05/03/2012

curing cancer - heck they gave the world's economy cancer!

[Demonthenes]

12:50 PM on 05/03/2012

I guess the lipstick is off the pig argument that shareholders agree with the compensation packages of senior executives.

You sort of knew the argument was phony at the start, since it was used as an argument to say that because investors would agree with these compensation packages, we shouldn't bother letting them vote on it.

Now, the argument is that "well the votes are non-binding so let the good times roll."

I guess you really do have to have binding shareholder votes before the board listens, if ever.

My favorites were all the chairman/ceo people voting their own pay packages and pretending the Compensation Committee was "independent."

[ema123]

01:30 PM on 05/03/2012

Dump thier stock a 29-40% sell of will hurt!

[JoeyDee2]

12:39 PM on 05/03/2012

And who is surprised by any of this. These exec trolls probably floated through college history class (those who went to college)? If you act like royalty and indulge like an insatiable pig long enough, the peasantry will rise up.

[spinotter11]

01:17 PM on 05/03/2012

To me, it is more that these people have never learned what it is to be a decent human being who wishes to share the resources of the world equally. That is the only fair way. All of this nonsense about grabbing it or being smarter entitling someone to possess billions - I'm hoping our descendant will rightly classify us as selfish barbarians.

[ema123]

01:31 PM on 05/03/2012

They are socipaths

[JoeyDee2]

02:45 PM on 05/03/2012

Interesting. It is a sort of a reactionary, almost medievalistic society and culture. Words and phrases like common good, progressive, and universal health care are "bad" words. Our culture derides compassion, education, and even science. This is NOT an enlightened period in America. How long before we start burning witches again?

[4eva]

12:36 PM on 05/03/2012

Au contraire.
UBS and all the other banks learned their lesson very well.
They learned that they will be bailed out by the peons no matter what they do.

[ema123]

01:32 PM on 05/03/2012

Sadly true, and that bailout had no conditions, they should have been fired and sued personally. the banks broken up and restrictions put in place

[SLDO]

12:20 PM on 05/03/2012

Two words: Arrogance and hubris!

[PROGRESSISGOOD]

12:20 PM on 05/03/2012

Occupy Boardrooms everywhere!

[NetLoa]

12:19 PM on 05/03/2012

The banks have made a mockery of the "free market" and even the rule of law. A lot of jail time is the correct prescription for the disease.

[StopMakingSense2]

12:13 PM on 05/03/2012

Since greed has no limits why the surprise?

[jstjoe]

11:41 AM on 05/03/2012

...how sarcastically is it possible to say the word " shocking" ?

[Flight]

11:38 AM on 05/03/2012

Banks just refuse to accept the mess they created. I'm waiting for the karma to kick in at some point.