UBS boss Sergio Ermotti 'got £2 million pay rise in 2015'

UBS allocated 14% more money for bonuses in 2015, its most profitable year since 2010

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The Independent Online

Sergio Ermotti, the UBS chief executive, saw his wages rise by 28 per cent in 2015, according to the Swiss bank’s annual report published on Friday.

The CEO's total pay came at CHF14.3 million (around £10.2 million) up from CHF11.2 million (£7.99 million).

UBS allocated 14 per cent more money for bonuses in 2015, its most profitable year since 2010.

The lender said the compensation is based on the achievement of both “quantative” and “qualitative” performance targets.

Directors believe that Mr. Ermotti’s leadership in a challenging market environment has helped the company to deliver good results for the year.

“Mr. Ermotti continued to set the highest standards and a clear tone from the top regarding the risk and control environment. His focus on execution of our well-defined strategy has made these results possible,” UBS said.

UBS shares rose 14.2 per cent in 2015, outpacing the European banking sector index which fell 3.3 per cent.

The announcement comes at a time when managers are looking at other ways to incentivise their workforces as a volatile cocktail of bank cost-cutting, weak markets and onerous regulations delivers clear-cut winners and losers in the battle for a shrinking bonus pool.

Europe’s biggest lenders – Barclays, Credit Suisse and Deutsche Bank – are going through a painful period of job losses and leaner finances, leading to another bonus cull for bankers.

Deutsche Bank has announced it is cutting its bonus pool by €2.41 billion (£1.88 billion) after posting its first annual loss since 2008.

Barclays' bonus pool for staff was £1.67 billion for 2015, 10 per cent down from 2014, as it reported a two per cent drop in annual adjusted profit before tax to £5.4 billion.

Tidjane Thiam the chief executive of Credit Suisse, UBS rival, has asked the bank's board to cut his 2015 bonus by between 25 per cent to 50 per cent last after the bank posted a CHF 2.94 billion (£2.05 billion) loss last year.

A business model where you have a cyclical revenue stream and fixed salary base does not work,” Mr Thiam said. 

“The business is structurally quite profitable provided the pay can go up and down. It’s the ‘and down’ that they [bankers] don’t accept,” he added.