The chairman of the Swiss banking giant UBS had his pay packet slashed by 90 per cent in 2007 after the bank slumped to its first full-year loss following huge sub-prime writedowns.
Marcel Ospel, who has come under pressure from investors after the bank's returns were smashed by the credit crisis, took home Sfr2.5m (£1.25m) in 2007, it emerged yesterday, a staggering decline from his Sfr26.5m compensation package the previous year.
The chairman's take-home pay fell sharply after he decided to turn down a bonus in the wake of UBS's losses. His base salary remained at Sfr2m, although he did receive benefits in kind and contributions to his retirement benefit plans, according to the company's annual report published yesterday.
The previous year, Mr Ospel received a Sfr10m cash bonus and Sfr10m in shares on top of the base Sfr2m. Mr Ospel, 58, has been chairman of UBS since 2001 when he moved from being the group's chief executive.
The disastrous results for 2007 left some shareholders calling for Mr Ospel's head. UBS did not bow to pressure last month as it proposed him for re-election, although it did cut his proposed term down to a year from the usual three.
UBS announced at its annual results in February that it had been hit by a net loss of Sfr4.38bn last year, "almost completely from our exposure to the US residential real estate market through positions in mortgage-backed securities and related structured products". The bank was forced to write down $18bn and warned of worse to come.
The annual report said the writedowns overshadowed an "outstanding" performance in most of its other businesses, which made the financial results "even more difficult for us to accept". It was the first loss since the bank was formed a decade ago with the merger of Union Bank of Switzerland and the Swiss Bank Corporation to create the country's biggest banking group.
The report also revealed that Peter Wuffli, the group's chief executive who was ousted in July, the former chief financial officer Clive Standish and Huw Jenkins, who was head of investment banking before leaving in September, shared Sfr33m in 2007.Reuse content