UBS faces pressure from shareholders ahead of an investor meeting next month. The opposition centers around a nearly $12 million windfall for CEO Sergio Ermotti and a prolonged French legal tussle.
Controversial Comparison
The wealth manager has justified the pay with the fact that UBS' net profit rose 12 percent on the year, its capital is solid, and it bought back 750 million francs worth of its own shares last year. Ethos criticized that shareholders suffered a nearly one-third drop in the value of their shares during that time.
From 2016 until last year, shareholders sucked up a more than 28 percent tumble, far more dramatic than the 1.8 percent fall in the wider banking sector, Ethos said. «Ethos believes that UBS must introduce a performance target taking into account the relative performance of the bank’s share price», said the group, which holds sway with many of Switzerland's weighty pension fund voters.
French Probe Irks
The «nay» from ISS on releasing board and management for 2018 is purely pre-emptive, the shareholder advocate said – it is the first time since the financial crisis that shareholders have mounted opposition against top executives.
ISS issued the recommendation in view of UBS' long-running French criminal troubles, where the bank was recently hit with a 4.5 billion euro ($5 billion) fine (the bank shredded the decision and faces at least another two years of appeals process). The shareholder group said the move would simplify any potential legal steps against members of the C-suite later. Ermotti and chief lawyer Markus Diethelm are the architects of a pugnacious legal strategy in France.