Facundo Arrizabalaga/European Pressphoto AgencyAndrea Orcel joined UBS last year.
LONDON – UBS said on Thursday that it had awarded its new investment bank chief, Andrea Orcel, 24.9 million Swiss francs ($26 million) in deferred cash and shares to compensate him for pay he forfeited when he left Bank of America Merrill Lynch.
The amount dwarfs the 8.87 million francs the bank paid its chief executive, Sergio P. Ermotti, in 2012.
“In line with market practice, he received awards as a replacement for deferred compensation and benefits forfeited by his previous employer as a result of his joining UBS,” the bank wrote in its annual report released on Thursday. Mr. Orcel’s cash and share awards will vest over the next three years, and UBS did not disclose his 2012 compensation.
Banks have come under pressure, especially in Switzerland, to curb lavish paychecks and better link pay with performance. Swiss voters two weeks ago approved changes to executive pay, including giving shareholders a vote on how much a company’s board and management can earn.
The changes, which are scheduled to become law by next year, could also keep banks from paying executives before they start their jobs and once they leave a firm, so-called golden handshakes and golden parachutes.
Mr. Ermotti, who took over as chief executive at the end of 2011, hired Mr. Orcel to return the bank’s investment banking business to profitability. To repair the investment banking business, UBS has adopted a plan to eliminate 10,000 jobs and scale back its debt-trading business while focusing on less capital-intensive activities. The unit had a pretax loss of 2.73 billion francs last year.
Mr. Orcel had worked for 20 years at Merrill Lynch, which became part of Bank of America after a merger driven by the financial crisis. The deferred payout he received included 6.36 million francs in cash and UBS shares valued at 18.5 million francs when they were awarded.
Mr. Ermotti succeeded Robert J. McCann, the head of the wealth management operation for the Americas, as the best paid board member in 2012. Mr. McCann earned 8.55 million francs last year, down from 9.18 million francs in 2011.
The bank’s total bonus pool fell 7 percent, to 2.5 billion francs, from 2.7 billion francs a year earlier. UBS said it clawed back about 60 million francs in awarded compensation from staff members linked to a rate-manipulation scandal.
Article source: http://dealbook.nytimes.com/2013/03/14/ubs-pays-investment-bank-chief-26-million/?partner=rss&emc=rss