ZURICH (Reuters) - Shareholders of Swiss bank UBS Group should oppose its compensation report for 2018, proxy adviser Glass Lewis said, citing “pay-for-performance concern”.
Shareholders get a non-binding vote on pay policy at the bank’s annual meeting on May 2.
Glass Lewis said that while UBS had improved earnings last year, some financial indicators including earnings per share and return on equity lagged those of its Swiss and European peers.
“We are currently troubled by the significant fines the company is facing in Europe, particularly in France, as a result of money laundering litigations,” it added.
It also suggested shareholders abstain from approving the actions of the bank’s board and top management in 2018, especially in light of a French tax case that has prompted UBS to boost litigation provisions.
Glass Lewis said given uncertainty over ongoing investigations, it believes shareholders cannot “confidently determine whether it is in their best interests to ratify the acts of the members of the board and management for the past fiscal year at this time”.
UBS said in response that its compensation model had remained consistent since 2012 and had always received shareholder support.
It added that the overall incentive compensation pool for 2018 had declined, as had compensation for the executive board and chief executive.
“We believe a clear link between pay and performance has been presented in our compensation report,” it added.
Reporting by Oliver Hirt and Michael Shields; Editing by Jan Harvey and David Evans