UBS keeps CEO Ermotti's pay in check amid regulation tussle

By Ariane Luthi

ZURICH (Reuters) -UBS CEO Sergio Ermotti's total pay was 14.9 million Swiss francs ($16.9 million) last year, with the bank keeping his remuneration in check as it navigates a tense political debate about how it is regulated.

That compares with the 14.4 million francs for nine months' work in 2023 when Ermotti returned to UBS to oversee the integration of Credit Suisse. Even with the shortened work year, that made him then the best-paid boss among leading European banks.

Finance Minister Karin Keller-Sutter publicly questioned whether Ermotti's 2023 pay was appropriate, and news of the 2024 compensation package quickly drew criticism as well.

"Nothing learned!" the head of the centrist Green-Liberal party, Juerg Grossen, posted on X in response to Ermotti's salary. "Such wages tear our society apart and ultimately damage Switzerland as an economic and banking centre."

Last year, Ermotti's base salary remained stable, while his variable compensation fell to 12.1 million francs from 12.25 million francs in 2023, the bank said in its annual report.

His total compensation was lower than that of David Layton, the CEO of Swiss private equity firm Partners Group, who received almost 17 million francs last year.

UBS bought its former rival Credit Suisse for just 3 billion francs in a state-engineered deal after the once-powerful institution fell apart in a welter of scandals.

The UBS that emerged from the takeover has a balance sheet bigger than the Swiss economy, stirring concern about what would happen if the enlarged bank failed, and leading to calls to draw up tougher regulations to prevent another meltdown.

Central to that is how much additional capital UBS should hold, and in the annual report the bank criticized what it called an "often ill-informed public debate" in Switzerland about potential risks stemming from its business activities.

The Swiss upper house of parliament backed a motion this month to cap bankers' pay at between 3 and 5 million francs ($3.4 million-$5.7 million).

Still, Jakob Stark, the lawmaker from the right-wing Swiss People's Party, who filed the motion to curb pay in 2023, struck a more moderate tone on Monday, saying it was not aimed at UBS.

"My motion is not aimed at Mr. Ermotti, he's doing a great job," he told Reuters. "If you take 2023 and previous practice as a benchmark, his remuneration for 2024 is acceptable."

UBS said that total fixed and variable compensation for its executive board in 2024 was 143.6 million francs, up from 140.3 million francs a year earlier.

The group-wide bonus pool stood at $4.7 billion last year compared with $4.5 billion in 2023.

($1 = 0.8837 Swiss francs)

(Reporting by Ariane Luthi; Editing by Dave Graham, Edwina Gibbs and Louise Heavens)