UBS AG share price down, raises its CEO’s 2013 compensation by 21% as it turns back profitable

The client-focused financial services company UBS AG announced that the compensation of its Chief Executive Officer Sergio Ermotti was increased by 21% to 10.73 million Swiss francs (12.3 million dollars) in 2013. Different compensation and benefits were included in the 8.23 million francs Mr. Ermotti got, and his salary was said to be 2.5 million francs. In comparison, the Chief Executive Officer of UBS AG got a total of 8.87 million francs the year before, including the salary of 2.5 million francs.

UBS AG, which offers a combination of wealth management, asset management and investment banking services not only in the region but also worldwide, posted a profit last year. As reported by the Wall Street Journal, UBS AG said that the efforts made by Mr. Sergio Ermotti gave relatively strong financial results due to the fact he was focused on “protecting and improving the firms reputation”.

However high the compensation of Mr. Ermotti may seem, the total compensation of the head of UBSs investment banking Andrea Orcel beats both Mr. Ermottis payment, as well as the remuneration of the rest of the companys executives. The compensation of Mr. Orcel is estimated to 11.43 million francs. The total payment of Mr. Orcel for 2012 was not disclosed by UBS AG, but the company announced that in 2013 the compensation of the entire executive board was estimated to 82.4 million francs.

As reported by Reuters, one of the retail shareholders of UBS – Ms. Brigitta Moser-Harder said: “UBS has still not learnt from the mistakes of the past.”

The Chairman of UBS AG – Mr. Axel Weber responded to these words, saying: “Negative results that arise due to issues from the past and the acceleration of restructuring at UBS should be viewed differently from an operating loss. We reduced our risks substantially in 2012, and shrunk our balance sheet. UBSs capital strength under Basel III is now clearly industry leading. We have also regained client confidence in Switzerland and abroad.” He also reminded that the share price of the company increased by 28% in 2012.

UBS AG fell by 2.12% in Zurich by 12:25 GMT to 17.98 francs, marking a one-year change of +16.74%. The lender is valued at 69.87 billion francs. According to the Financial Times, the 30 analysts offering 12-month price targets for UBS AG have a median target of 20.45 francs, with a high estimate of 23.00 francs and a low estimate of 13.21 francs. The median estimate represents a 11.32% increase from the previous close of 18.37 francs.