UBS shareholders took the unprecedented step of refusing to exonerate former top executives for the risky investment bets that brought the bank to the verge of collapse during the credit crisis.
Also, around 40 per cent of UBS shareholders gathered for a tense annual meeting rapped the Swiss giant for awarding hefty pay cheques despite big losses, a warning to the chief executive Oswald Gruebel not to follow market excesses.
Nearly 53 per cent of investors voted against discharging the former chairman Marcel Ospel, now a hate-figure for the Swiss public, ex-CEO Peter Wuffli and all those who were board members in 2007, from responsibility for their actions, opening the door to potential damage claims.
That was the year that led to more than $50bn of writedowns and to record annual losses in 2008.
UBS has said it will not seek compensation from former executives, but may be pressured to do so after the vote.
"We now ask the board to reconsider their decision and file a civil lawsuit against the former members of the board and executive management, sending a clear signal that the board is distancing itself from the acts of their predecessors," said Dominique Biedermann, executive director for the activist Swiss fund Ethos, which led the shareholder protest at UBS.
"This is a necessary step toward regaining the confidence of UBS clients and shareholders to restore the bank's strong financial position."
But some observers suggested such moves would be draconian.
"Primitive societies would sacrifice their elite to appease the gods, and that's what some Swiss would like to do to Ospel and company today," said Peter Thorne, an analyst with Helvea.
Mr Gruebel said earlier in the day that UBS had not yet managed to regain trust, especially in Switzerland.
Investors decided to exonerate Mr Gruebel and the chairman, Kaspar Villiger, who were both hired last year to restore UBS and who brought the bank back to profit in the last quarter of 2009.
But the large share of votes against the bank's 2009 compensation will keep Mr Gruebel under pressure at a time when he needs to attract top staff, including financial advisers to stop client withdrawals.
"It's a clear signal from investors and I think... it will have to be taken into consideration by management," Beat Amstutz, a spokesman for the large asset manager Swisscanto, which voted against the bonus package, said.
Mr Gruebel said the bank, which has also been the target of a high-profile US tax fraud investigation, expected client withdrawals to continue despite a slowdown in the first quarter.
UBS paid Sfr3bn in cash bonuses in 2009 despite annual net losses of Sfr2.7bn, but Mr Gruebel did not take a bonus.
Around 60 small shareholders lined up to speak at the annual meeting, with many expressing anger at their personal losses and at bonuses that could exceed 100 times an average person's salary.
Mr Villiger told shareholders curbing variable pay would take away the banks' "chances of recovery and survival."
Shares in UBS closed up 2.4 per cent at Sfr18.48, outpacing the STOXX 600 European banks index, up 1.2 per cent. While top bankers have said Mr Gruebel needs a few months of calm to restore client trust, the shareholder vote may generate more negative headlines for the bank in its homeland Switzerland, analysts said.
"Other factors, such as the capital situation, have lost significance. But there are still other issues such as the whole discussion on bonuses in Switzerland that could annoy clients," said ZKB analyst Andreas Venditti.
Key to UBS is also the fate of a deal struck with the United States last year to end a bitter tax investigation that has shaken customers' trust and dealt a blow to Switzerland's traditional bank secrecy. Parliamentary approval is needed.
The bank's chairman said he was "very concerned" about the future of the US tax deal. The Swiss government tried to put pressure on parliament by saying on Wednesday it saw "no alternative" to the deal, which requests the sharing of thousands of UBS client names with US tax authorities.
The right-wing SVP, Switzerland's biggest party, has said it will vote against the deal. But the second-largest party, the Social Democrats, whose vote could make or break the deal, signalled on Tuesday they would back it if the government introduced tax curbs on bonuses.
The Liberals, the party of Finance Minister Hans-Rudolf Merz, are expected to support the UBS deal in parliament but they and the Christian Democrats alone do not have a majority. "If the Social Democrats vote in favour, the deal will go through, but they are attaching some conditions to their vote," said the Christian Democrats spokeswoman Marianne Binder.