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UBS chief executive Sergio Ermotti was paid SFr14.9mn ($16.8mn) last year, retaining his status as Europe’s best-paid bank boss, just as remuneration in the financial services sector faces growing scrutiny in Switzerland.
Ermotti’s compensation was slightly higher than the SFr14.4mn he was awarded in 2023, which was for nine months work but spread across a full year.
The disclosure of Ermotti’s pay in UBS’s annual report on Monday comes as Switzerland’s upper house last week narrowly backed a motion to cap executive remuneration in the banking sector to SFr5mn.
The proposal underscores how politically sensitive pay in the finance sector has become following UBS’s controversial takeover of former rival Credit Suisse in 2023. The motion still needs to move through the lower house and the country’s executive branch.
Ermotti returned to run UBS for a second time in 2023 after the Swiss bank bought Credit Suisse in a deal orchestrated by Swiss regulators.
His pay for 2024 exceeds the £5.4mn received by HSBC’s chief executive Georges Elhedery, and the €9.75mn Deutsche Bank boss Christian Sewing is set to earn. It is also more than the €13.8mn Banco Santander’s executive chair Ana Botín was awarded and the €13.2mn handed to UniCredit’s chief Andrea Orcel.
Ermotti’s remuneration, however, is less than the amounts executives earn at US peers on Wall Street. JPMorgan Chase boosted longtime chief executive Jamie Dimon’s pay 8 per cent to $39mn last year, his largest remuneration at the US bank. Morgan Stanley this year said it paid Ted Pick $34mn for his first year as chief executive.
It is also less than that in some Swiss companies. The chief executive of pharmaceutical company Novartis, Vasant Narasimhan, was paid a total of SFr19.2mn last year, for example.
Many in the industry had expected Ermotti’s compensation to be much higher this year. Ermotti’s total package was capped at SFr15mn in 2023 but the bank said last year that the cap would rise to SFr20mn for 2024.
Swiss banks are not subject to the same restrictions over executive remuneration as those in the Eurozone regulated by the European Central Bank.
The heightened scrutiny over executive pay in the country also comes as UBS braces for a potentially substantial increase in capital requirements as Switzerland reforms its too-big-to-fail regulations in the wake of Credit Suisse’s demise.
The Swiss government is considering a range of measures intended to make the banking sector more secure.
However, the mooted reforms have created tensions between UBS and the Swiss political establishment.
In a letter to shareholders, published in UBS’s annual report on Monday, Ermotti and chair Colm Kelleher criticised the “ill-informed public debate” in Switzerland, saying the planned reforms had “created uncertainties as we enter 2025”.
“Excessive capital requirements or other undue limitations on our international business would penalise our diversified global presence, run counter to the government’s financial sector strategy and damage the competitiveness of Switzerland’s economy, raising the cost of capital for homeowners and businesses,” they said.
The pair added that they remained committed to a “constructive dialogue” and would “continue to contribute our facts and arguments so that a reasonable solution can be found”.
