) to profitability, Chief Executive Officer (CEO) Sergio P.
Ermotti received approval for compensation worth CHF10.73 million
for 2013, as per the bank's Compensation Report 2013. This
reflects a year-over-year increase of 21% from CHF 8.87 million
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The total compensation comprises a base salary of CHF 2.5 million
and variable pay and benefits worth CHF 8.23 million. However,
the company's investment-banking head Andrea Orcel remained the
highest-paid executive with remuneration of CHF 11.43 million for
The CEO's pay package was determined on the basis of his
performance in terms of achieving financial and qualitative
targets for 2013. Under Sergio P. Ermotti's leadership, UBS
witnessed a 44% rise in Adjusted Group profit before tax to
CHF4.1 billion in 2013. On a fully applied basis, UBS AG's BIS
Basel III common equity tier (CET) 1 ratio increased 300 basis
points year over year and 90 basis points sequentially to 12.8%,
which surpassed the company's target of 11.5% for 2013.
On a qualitative basis, the board of directors recognized several
efforts by Ermotti including his increased focus on clients, risk
control measures, regulatory compliance and brand and reputation
of the company at a time when it is surrounded by multiple
charges from the regulatory bodies.
Ermotti's pay hike is justified bearing in mind the pivotal role
he played in turning around the company's performance in 2013
after it incurred a loss in 2012.
The latest compensation approval marks the last decision taken
independently by the board of Zurich based UBS. As per the recent
norms issued by the Swiss Federal Council, for any Swiss listed
company, the compensation of the group executive board members
and board of directors are subject to shareholders' voting. UBS
will hold its first vote on the compensation of such personnel at
the 2015 Annual General Meeting (AGM) of shareholders.
UBS currently holds a Zacks Rank #3 (Hold). Some better-ranked
stocks in the foreign banks space include Hong Kong-based
Hang Seng Bank Ltd
), South Korean Bank
Shinhan Financial Group Company Ltd
) and Argentina-based
Banco Macro S.A.
). Both Hang Seng Bank and Shinhan Financial carry a Zacks Rank
#1 (Strong Buy), while Banco Macro holds a Zacks Rank #2