At the annual general meeting of UBS to be held on 2 May 2019, Ethos recommends to oppose all proposals related to the remuneration of the board of directors and the executive management. Ethos considers that the CHF 73.3 million requested for the 2018 bonus of the 13 members of the executive management is excessive in light of the bad performance of the bank’s share price in 2018. 

According to the 2018 remuneration report, the total variable remuneration (bonus) of the 13 members of the executive management is CHF 73.3 million, of which CHF 11.3 million for the CEO. Mr. Sergio Ermotti’s 2018 bonus is 4.5 times his annual base salary, almost the maximum set at 5 times his annual salary.

The bank justifies these amounts based on a group net profit of USD 4.5 billion, up 12% on 2017, robust equity as well as share repurchases for CHF 750 million in 2018. Ethos notes however that in parallel the share price was down 31.8% year-on-year. During the 2016-2018 period, the total shareholder return of the UBS share was down 28.4%, while it was down only 1.8% for UBS’ peers. To prevent the payment of an almost maximum variable remuneration for a share price performance well below peers, Ethos believes that UBS must introduce a performance target taking into account the relative performance of the bank’s share price.

Ethos also considers that the remuneration of the board members (CHF 736'700 on average), of the chairman (CHF 6 million), as well as the base salaries of the members of the management (CHF 2.5 million for the CEO and 1.5 million on average for the other members) are excessive in comparison to what is paid by other SMI companies. Ethos therefore recommends that shareholders do not approve the remuneration report (item 2), the 2019 remuneration of the board (item 8.1), the variable remuneration of the executive management for 2018 (item 8.2) and the fixed remuneration of the executive management for 2020 (item 8.3).

Ethos acknowledges that in recent years UBS has made efforts to improve the transparency of the remuneration report and intends to continue the constructive dialogue with the bank in the future. To this end, Ethos expects the board of directors to amend UBS’ remuneration system to better align it with the interests of the bank's shareholders and other stakeholders.


Ethos voting positions for the UBS annual general meeting