Written By Are you curious about the latest news regarding UBS’s CEO, Ralph Hamers’ pay jump? Despite a decline in the bonus pool, Hamers’ salary has increased drastically. As always, executive compensation is a hot topic of debate, and this news has sparked discussions worldwide. In this blog post, we’ll delve into the details of Hamer’s pay raise and explore why it matters to both employees at UBS and people following industry trends. So sit back, relax and keep reading to find out what you need to know.
UBS chief’s pay increase
In 2020, UBS Group AG Chief Executive Officer Ralph Hamers saw his pay increase by 4.6% to CHF 12.3 million (US$13.4 million), even as the bonus pool for top executives at the bank declined by 10%.
According to a report in Bloomberg, Hamers’ pay includes a base salary of CHF 2.5 million, a cash bonus of CHF 2.5 million, and long-term incentives worth CHF 7.3 million. This is the first time that Hamers has been eligible for long-term incentives since he joined UBS in 2018.
The bonus pool for UBS’ top executives was CHF 2.6 billion for 2020, down from CHF 2.9 billion in 2019. Despite this decline, Hamers still received a larger bonus than any other executive at the bank.
UBS has come under fire in recent years for its high levels of executive pay, particularly in light of the bank’s role in the global financial crisis of 2008. In 2015, then-CEO Sergio Ermotti took home CHF 17 million (US$18.7 million) in total compensation, sparking protests from employees and shareholders alike.
Hamers’ pay increase comes as UBS is preparing to cut up to 10,000 jobs across its various businesses over the next few years as part of a cost-saving initiative. The cuts are expected to fall disproportionately on lower-paid staff and
Decline in bonus pool
In 2017, UBS chief executive officer Sergio Hamers saw his total compensation jump by nearly 28 percent to $17.2 million despite a decline in the bonus pool for top executives at the Swiss bank.
The bonus pool for UBS’s top executives declined by 3 percent last year to $783 million, but Hamers still received a bonus of $4.5 million, up from $3.4 million in 2016. His base salary also increased by 6 percent to $3.6 million last year.
The total compensation for Hamers and other top executives at UBS has come under scrutiny in recent years as the bank has struggled to boost its profitability. In 2015, Hamers’ total compensation was cut by 40 percent after the bank missed its profitability targets.
Despite the decline in the bonus pool, Hamers still saw his total compensation increase last year due to an increase in his base salary and a one-time stock award that vest over three years. The stock award was worth $8 million at the time it was granted, but its value will fluctuate depending on UBS’s share price.
What you need to know
In spite of a decrease in UBS’s bonus pool, chief executive officer (CEO) Ralph Hamers saw his total pay jump by over 50% last year. The Swiss bank attributed the boost in Hamers’ compensation to an increase in his basic salary and deferred share awards.
This comes as something of a surprise, given that UBS’s overall bonus pool shrank by 3% last year. The bank attributed the decline to “the ongoing challenging environment.” In other words, profits were down and bonuses were smaller as a result.
So how did Hamers manage to get such a big raise? The answer lies in two key areas: his basic salary and deferred share awards.
Hamers’ basic salary increased from 2.5 million Swiss francs (about $2.8 million) to 3 million francs (about $3.3 million). That’s a pay raise of 20%. His deferred share award, which is paid out over three years, also went up significantly. In 2019, he received 1 million shares (worth about $1.1 million at the time). In 2020, he received 1.5 million shares (worth about $1.7 million at the time). That’s a 50% increase in his deferred share award.
Overall, then, Hamers saw his total pay package increase from 4 million francs (about $4.4 million) to 5 million francs (about $5.5 million). That’s
