UBS handed out the smallest bonuses in four years and lowered Chief Executive Officer Sergio Ermotti's payout as profit slumped last year.
The bank cut the bonus pool for 2016 by 17% to 2.9 billion Swiss francs ($2.9 billion), according to its annual report published Friday. Ermotti, 56, remains the highest-paid executive at the Zurich-based lender, with a total compensation of 13.7 million francs, down from the 14.3 million francs he received in 2015. That includes 10.9 million francs in variable compensation for his fifth full year in the top job.
-
An arbitration panel ordered the wirehouse to settle the latest dispute stemming from client investment losses tied to the island commonwealth's massive debt crisis.
December 6 -
The wirehouse has served as a major banker for the island commonwealth, which has been defaulting on a growing share of its debt and has been placed under federal financial oversight.
September 28 -
In the latest in a series of cases, an arbitration panel has sided with a client against UBS, ordering the wirehouse to pay nearly $1.5 million in damages related to UBS' sale of Puerto Rican bonds and closed-end funds.
February 22
Market volatility at the start of 2016 took a bite out of UBS's profit and the bank then missed out on a debt-trading bonanza, largely as a result of its post-crisis strategy. Andrea Orcel, who heads the securities unit, has said the bank pays for performance and while 2016 was "not bad," it wasn't as good as the prior year, when performance compensation was boosted across the group.
"2016 was another challenging year for the industry and UBS, marked by macroeconomic uncertainty, geopolitical tensions and divisive politics, which adversely affected client sentiment," Ermotti and Chairman Axel Weber said in a letter to shareholders provided in the report.
Weber received 6.1 million francs for 2016, in line with the previous year, according to the report.
The bank's bonus pool is tied to several performance indicators, including capital strength and some profitability measures. The last time the pool was smaller was in 2012, when it decided to cut large parts of the investment bank and was fined for trying to rig global interest rates. It awarded 2.5 billion Swiss francs in bonuses for that year.
