UBS’s new chief executive Ralph Hamers has been paid SFr4.2m ($4.5m) for his first four months of work, more than his entire annual earnings during his time as the head of Dutch bank ING.
The bumper payout, which was revealed on Friday by the Swiss bank in its latest annual report, puts him on course to contend with his predecessor, Sergio Ermotti, as one of Europe’s highest-paid bankers and chief executives.
Profits at UBS surged in 2020 despite the economic turmoil caused by the coronavirus pandemic, as the bank’s super-wealthy clients moved to protect their assets and take advantage of dislocations, earning huge fees for their advisers.
Hamers started at UBS on September 1, and took over from Ermotti as chief executive on November 1.
“Ralph Hamers decisively led UBS as group CEO through the fourth quarter and delivered very strong results, thereby successfully completing the year and contributing to achieving the best results for UBS in a decade,” the UBS compensation committee said in the bank’s annual report.
UBS increased its total bonus pool to SFr3.3bn for 2020 after beating all of its key quantitative financial performance targets, the report added.
The first few months in charge at UBS have not been without challenges for Hamers.
He was forced on to the back foot barely a month into his tenure as chief executive when a Dutch court announced it was investigating him for his role in a money-laundering scandal during his time at ING.
Hamers has vigorously rejected any wrongdoing and the UBS board has said it fully supports him.
The bank is also waiting on the outcome of a big tax case in France, which it had hoped to resolve months ago. An appeal against a €4.5bn fine for facilitating tax evasion is due to be heard this spring.
Payouts at UBS are up 24 per cent compared with 2019 — when it undershot financial targets — and 6 per cent on 2018. Total pay for members of the lender’s executive committee rose by a fifth, year on year.
UBS said it had awarded Ermotti a total package of SFr13.3m for 2020, meaning he has earned more than SFr60m over the course of his nine-year tenure at the head of the bank. The 60-year-old Swiss national is to take over as chairman of insurer Swiss Re this year.
Unveiling its full-year results in January, UBS pledged to return billions of dollars to shareholders in the coming months on the back of a sharp rise in profits. Full-year net earnings for the bank rose 54 per cent to $6.6bn.
The bank intends to buy back $4.5bn of stock over the next three years.
Hamers has said he intends to prioritise cost control and digitisation efforts at the group, but he has so far stopped short of unveiling a full strategic plan.
Shares in UBS rose 0.7 per cent to SFr14.54 by noon on Friday.