The long-standing UBS-CEO had squandered a chance to upgrade the bank for investors in a largely favorable period in financial markets, including through acquisitions. Since an October event where Ermotti effectively promised more of the same, UBS' stock has shed more than 3 percent, continuing a downward march begun in 2015.
Outsiders vs UBS Bench
UBS didn't comment on matter to finews.com. Behind the scenes, Weber is attempting to patch things up. He and Ermotti still work together very constructively, and complement each other ideally, the messaging goes; investors aren't unhappy with UBS' strategic direction, and succession plans for the 59-year-old Ermotti hadn't yet been discussed in detail.
Weber is pushing for UBS to replenish its depleted top ranks from outside following the exit of two high-profile top executives. By contrast, Ermotti has made no secret of his preference for an internal candidate to advance. While Weber wants to launch succession, according to Ermotti «those changes are years away».
CEO as Fait Accompli
To be sure, the difference in opinion between the two isn't a true fissure: the Ticino native and the German central banker were never the «dream team» behind UBS' 2012 rebirth as a wealth manager.
Ermotti also wasn't Weber's first choice as CEO: the Swiss banker was enthroned late in 2011 by former Chairman Kaspar Villiger (pictured below), while Weber was still cooling his heels after leaving central banking.
(Image: Keystone)
Initially, Weber was to join UBS' board as an ordinary director. Villiger then paved the way for the former central banker to take the chairman's seat, after Ermotti had already been appointed by Villiger. Weber faced a «fait accompli» when he finally joined UBS' board in 2012. By that time, Ermotti had been in the job for several months already, and had presented his strategy to radically reshape UBS as a wealth manager with a side of investment banking.
Strained Ties
From then on, the two maintained a relationship which both refer privately to as «complementary»: the CEO who began as an apprentice with a Ticino lender was responsible for UBS' operations and strategy. Weber, a former professor of economics, was a highly sought-after commentator of markets, macroeconomics, and politics.
The recent strain on the relationship looks unlikely to ease anytime soon: the succession topic remains at the fore, just as investors' displeasure with the lackluster share price and a wealth management strategy more sedate than peers.
Weber Plotting?
For his part, Weber appears to be eyeing an extension of his current tenure, beyond 2022. Privately, the 61-year-old has signaled that he isn't weary of the role, and that extending his term wouldn't be a problem.
To be sure, it is speculation that Weber is mulling a longer stay than previously communicated with a different CEO than Ermotti. Weber may want to repeat the fait accompli he inherited from Villiger in 2012: stay just long enough to name a new CEO and open UBS' next chapter.
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