UBS' new CEO is dropping anchor in a canton neighboring that of the Swiss bank's headquarters – and known for its friendly tax policies for bankers and other top earners.
Ralph Hamers is a resident of Zug, according to Switzerland's commercial register. The canton abuts Zurich and is known for flat tax rates for billionaires but also for milder rates of income tax than that of, for example, the city of Zurich, where UBS is headquartered.
The move is noteworthy because Hamers is eschewing Zurich to do so, as Swiss daily «Tages-Anzeiger» (in German), which first reported the move, highlighted. The 54-year-old Dutch banker, who started as CEO of UBS on Monday, is poised to kickstart the hidebound Swiss wealth manager.
Reading the Room
To be clear, Hamers isn't the first banker to head for the lakeside town roughly 30 kilometers south of Zurich: his predecessor, Sergio Ermotti, also maintained an apartment in Zug besides his main residency in Montagnola, a small town overlooking Lake Lugano. However, Hamers' opting of Zug over Zurich is likely to be viewed as inaccurately «reading the room» in terms of cultural sensitivities.
By contrast, ex-Credit Suisse CEO Tidjane Thiam made a point of stopping by the local registration office – a rite of passage for newcomers – when he moved to a lakeside town outside Zurich five years ago. In 2011, UBS Chairman Axel Weber moved from Frankfurt to the city of Zurich, saying he wanted to be within walking distance of company headquarters as well as to cultural venues like the opera house, which the Swiss bank sponsors.
«Damp Shady Hillside»
Ex-Credit Suisse Chairman Walter Kielholz put it more bluntly: «Is that a rhetorical question?» he snapped at a Swiss tabloid years ago when asked whether he would leave the city for a lower-tax area one canton over. «Why would I want to live on a damp, shady hillside?»
UBS didn't comment on Hamers' residency, telling the Swiss outlet it is a private matter. Tax is almost certain to feature in his thinking: Hamers' pay at UBS isn't known, but Ermotti was Europe's most lavishly compensated banker during his nine-year tenure.
Kibosh On Pay Rise
Ermotti realized more than 50 million francs in pay since taking the helm in 2011, as finews.asia reported in September. The comparison to the eurozone is stark: Hamers earned a modest 2.56 million euro ($3 million) in 2019, according to ING's annual report.
The veteran CEO, who was snapped up by UBS before rival HSBC could, was due for a 50 percent pay rise two years ago for running ING – until Dutch politicians put the kibosh on it.
