Oct. 23 (Bloomberg) — Protesters blocked UBS AG‘s private banking branch on Zurich’s Paradeplatz as hundreds gathered in the Swiss financial center to seek curbs on executive pay after the country’s largest bank was forced to ask for government aid.
Dozens sat on the steps of the bank’s entrance from midday shouting “return bonuses!” and waving red flags at bystanders and TV cameras. Unia, Switzerland’s largest trade union with more than 200,000 members, said about 1,000 people protested in front of UBS headquarters at an after-work rally.
“UBS shouldn’t be allowed to just continue this way,” said Olivier Vogel, a 24-year-old politics student at the University of Zurich and a member of the Social Democratic Party’s youth organization, which organized the protest. “If the bank won’t come around, there will be more actions.”
UBS’s $59.2 billion government aid package, announced last week, has prompted a popular backlash against executive pay in a country where tax evasion is not a crime and local governments offer tax breaks to lure millionaires. The bank paid about 12.5 billion francs in performance-related compensation for last year.
Switzerland’s biggest news daily, the tabloid Blick, published letters to former UBS Chairman Marcel Ospel for readers to tear out and sign to demand repayment of his bonuses. The Swiss government said yesterday it wants to make reclaiming compensation easier.
No Legal Basis
The protest organizers had asked UBS to limit compensation to 500,000 Swiss francs ($429,000) and stop donations to political parties. Cedric Wermuth, head of the group, handed over a giant bank deposit slip for UBS to return past bonuses.
“We have received the demands and will look at them,” UBS spokeswoman Rebecca Garcia said.
UBS Chairman Peter Kurer, in a weekend interview with Swiss radio DRS, said while he has been in discussions about the return of former executives’ bonuses, he doesn’t see a legal basis for such a demand.
“Given the current status of the bank and the environment we are in, I believe it is a question of ethics,” Kurer, UBS’s former general counsel, told DRS. UBS has received positive signals from some former senior managers, he said.
`Question of Ethics’
Ospel, 58, has received total compensation of almost 137 million francs as chief executive officer and later chairman of UBS since 2000. He hasn’t disclosed how much he will be paid for this year after resigning from his position in April. Ospel didn’t get a bonus for 2007.
CEO Marcel Rohner declined variable pay he was entitled to for the part of the year he was in charge of the wealth management business. UBS is paying former CEO Peter Wuffli, former finance chief Clive Standish and ex-investment banking head Huw Jenkins a combined 93.6 million francs in salary, deferred compensation and consulting fees from 2007 to 2009.
The Swiss Federal Banking Commission, which conducted an investigation into UBS’s losses from the credit crisis, said in a report published last week it didn’t find any evidence that managers intentionally damaged the bank to get a higher bonus.
Ethos Foundation, a Swiss activist investor group, said in a report today that UBS has made “significant” progress in corporate governance.
The bank is currently reviewing executive compensation and has said it plans to announce the results later this year. Kurer said last week he doesn’t expect to get a bonus for 2008 because UBS will post a loss.
To contact the reporter on this story: Daniela Silberstein in Zurich at [email protected]Elena Logutenkova in Zurich at [email protected]
Last Updated: October 23, 2008 13:15 EDT
By Daniela Silberstein and Elena Logutenkova
Source: Bloomberg