UBS cuts 2016 compensations, including for its CEO Ermotti

UBS published its Annual Report 2016 providing detailed information, showing that it lowered the total pay for its chief executive Sergio Ermotti in 2016, a year in which the bank's net profit was cut nearly in half compared with a year earlier.

Zurich-based UBS said on Friday that total compensation for CEO fell to 13.7 million Swiss francs ($13.5 million) in 2016 from 14.3 million francs a year earlier. Mr. Ermotti's base salary remained unchanged at 2.5 million francs, according to a public filing, and he received a smaller bonus compared with 2015. 
Overall, UBS decreased its 2016 bonus pool by 17% compared with the year before, to 2.9 billion francs.

UBS posted a 48% decline in net profit for 2016, to 3.2 billion francs, as it was weighed down by a dip in operating income and litigation provisions. UBS's wealth management business reported an adjusted pretax profit fall of 15% for the full year, while adjusted pretax profit at UBS's investment bank unit fell 34%.

UBS said the Mr. Ermotti's compensation is based on his "strong leadership in a year in which the [bank] achieved solid financial performance despite a challenging business environment."

The other GEB members received a salary of CHF 1.5 million (or local currency equivalent), also remained unchanged since 2011. The aggregate performance award pool for the GEB, which increased from 10 to 12 full-time equivalent members, was CHF 71.9 million for 2016. On a per capita basis, the performance award decreased by 16% compared with 2015.

Most European investment banks paid out smaller bonuses in 2016 as they cut costs and sought to meet shareholder demands for a greater share of profits.