UBS adopts new exec pay model, axes 2008 bonuses
By Jason Rhodes and Lisa Jucca
ZURICH (Reuters) - Swiss bank UBS axed bonuses for top executives on Monday and said it would introduce a more transparent pay system in the most far-reaching changes on pay at a top European lender during the credit crisis.
UBS, which is struggling in the subprime crisis and whose shares slumped to a new all-time low on Monday, said Chairman Peter Kurer, Chief Executive Marcel Rohner and other executive board members would not get any bonuses this year.
Starting from 2009, top managers' bonuses will be blocked for at least three years instead of being paid immediately and executives will receive variable pay if UBS results warrant.
Under the new system, the chairman will only be awarded a fixed salary. Kurer's fixed-pay salary for this year was 2 million Swiss francs ($1.68 million), he said on Monday.
"UBS is fully committed to taking its responsibilities seriously and correcting previous errors," the bank said.
Other major European players like Royal Bank of Scotland, Lloyds TSB and HBOS will not pay bonuses after taking British government cash and some top executives at Deutsche Bank have waived their bonus.
But UBS is the first large European lender to introduce a radical overhaul of its executive pay system.
Hefty bonuses for bankers have come under fire in the crisis for encouraging risk-taking rather than a longer-term strategy. Continued...