Shareholder majority approves Swiss bankers’ pay

UBS shareholders give CEO Sergio Ermotti ample food for thought at the annual general meeting Keystone

A large majority of shareholders of UBS and Credit Suisse have approved proposed remuneration packages for top executives at Switzerland’s two largest banks despite criticism from minority shareholders.

At the annual general meeting of UBS in Zurich on Thursday more than four out of five shareholders in a non-binding ballot backed the salary proposals, a week after 88 per cent of stock owners at Credit Suisse cleared their executives’ pay packages.

There had been concern after almost two out of three shareholders in Julius Baer, Switzerland’s largest private bank, voted against the proposed remuneration package for top executives earlier this month – the first time stockowners openly rejected a bank’s pay policy.

The bankers’ fears were largely unfounded. Some shareholders did voice for several hours their disapproval at UBS paying out salaries and bonuses  worth CHF2.5 billion ($2.7 billion), the same as its annual loss. But in the end, the majority preferred to follow the board’s recommendations.

Swiss voters approved in March the so-called fat cat initiative, which gives shareholders of publicly listed companies a bigger say on corporate payouts. UBS was the first company to implement some of the points set out in the initiative.

At Thursday’s shareholder meeting several dozen shareholders lined up to make remarks following the reports given by chairman Axel Weber and chief executive Sergio Ermotti. With slapstick performances, choirs and pantomimes, they shared their indignation about the bank’s pay policies.

“If you don’t have money in your till, you are not allowed to give it away,” repeated a number of shareholders. They pointed out that excessive bonuses only attract disloyal and greedy employees with criminal energy.

Journalist René Zeyer criticised Weber’s signing bonus of CHF5 million and investment bank head Andrea Orcel’s CHF25 million golden hello. The board members “are to lay golden eggs for us but they plan to eat them themselves”, he said.

Rudolf Meyer, president of the shareholder association Actares, said the bonuses paid out were extortionate. In addition, he added, recently emerged scandals were not just legacies but were related to business practises that were still common until recently.