UBS chief Sergio Ermotti is more firmly in the saddle than ever, and yet the clock is ticking on his tenure. Has Chairman Axel Weber missed his cue as kingmaker?
With a $13 million stock investment, CEO Sergio Ermotti has doubled down. Even after seven years including a major restructuring, the head of UBS shows little sign of slowing down. Instead, he has put his money where his mouth is for investors looking for a «share story».
The Swiss-born banker has rarely addressed when and how he plans to step aside, but the clock is ticking for the 59-year-old. All investors know is that Ermotti is likely to leave by 2022, when Chairman Axel Weber's term ends, at the latest.
Leave Untainted Legacy
If he makes it that far, Ermotti will have been head of UBS for 11 years – an eternity for the CEO of a global firm in the rapid-fire finance industry.
Ermotti, bank insiders report, wants to leave UBS clean of any legacy issues for his successor. That means waiting out a French criminal probe into tax evasion and money laundering, as well as facing down U.S. civil charges over crisis-era mortgage securities – both cases predate Ermotti's tenure, incidentally.
Strong Internal Bench
Who is in line to inherit Ermotti's job? Weber (pictured below) is in charge of succession, together with ex-agrochemical executive Michel Demaré, former Morgan Stanley banker David Sidwell and Isabelle Romy, a Zurich-based banking lawyer. Together, the group form UBS' nomination committee.
The 61-year-old ex-central banker has said little about how he plans to tackle the succession issue. Last year, he told a German magazine that UBS had a strong bench of talent to fall back on, but that it was too early to speculate.
Untouchable Ermotti
Nearly two years on, the exits of Juerg Zeltner and Andrea Orcel limit UBS' options for an internal successor considerably, which Weber could have prevented with a clear plan. Ermotti, who enjoys wide respect politically and in the industry as well as from the Swiss public, may be standing in the way of this: he is effectively untouchable at the moment (not least thanks to his $13 million splurge).
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