UBS Group AG cut its bonus pool for last year by 14% after a tougher year for deal-makers and traders, while elevating Chief Executive Officer Sergio Ermotti to the rank of best-paid European bank boss.
Ermotti received 14.4 million Swiss francs ($15.9 million) in compensation for his first 9 months on the job, including 12.3 million francs in variable compensation, UBS said in its annual report Thursday.
UBS brought back Ermotti as CEO in April last year to oversee the government-brokered rescue of Credit Suisse and the multi-year integration of the bank's former rival.
UBS posted a loss in the second half of last year and has warned that 2024 will be tougher as more complex integration tasks are carried out.
"The board recognizes Mr. Ermotti's excellent performance in a defining year in UBS's history and strong progress in delivering on integration priorities," UBS said in the report.
Annual profit came in at a record $27.8 billion, driven almost exclusively by the extraordinary effects of the acquisition of Credit Suisse. The so-called negative goodwill effect, related to the low purchase price for the bank, was reduced by $1.2 billion from an earlier estimate.
UBS shares whipsawed after the annual report and were briefly halted. The stock was down 2.2% as of 10:05 a.m. in New York Thursday.
Chairman Colm Kelleher received fixed compensation of 4.7 million Swiss francs for the 2023-2024 period.
UBS's lower overall bonus allocation reflects the impact from "challenging operating conditions for the financial industry, and the uncertainty and market volatility resulting from continued geopolitical tensions," the bank said in its report.
Banks across Europe are cutting the bonus pool at their investment banking divisions after a slump in deals and a slowdown in trading last year.
BNP Paribas SA cut total variable compensation in its investment bank by about 5%, while Deutsche Bank AG reduced its equivalent pool by more than 10%.
