LONDON - UBS said Thursday it awarded its new investment bank chief, Andrea Orcel, $26 million (24.9 million Swiss francs) in deferred cash and shares to compensate him for pay he forfeited when leaving Bank of America Merrill Lynch. The amount dwarfs the 8.87 million francs that the bank paid its chief executive, Sergio P. Ermotti, last year.
“In line with market practice, he received awards as a replacement for deferred compensation and benefits forfeited by his previous employer as a result of his joining UBS,†UBS wrote in its annual report published Thursday. Mr. Orcel’s cash and share awards will vest over the next three years.
Banks have come under pressure, especially in Switzerland, to curb lavish paychecks and better link pay with performance. Swiss voters two weeks ago approved changes to executive pay, including giving shareholders a vote on how much a company’s board and management can earn. The changes, which are scheduled to become law by next year, could also keep bank from paying executives before they start their jobs and once they leave a firm, so-called golden handshakes and golden parachutes.
Mr. Ermotti, who took over as chief executive at the end of 2011, hired Mr. Orcel to return the bank’s investment banking business to profit. Mr. Orcel left Bank of America Merrill Lynch after 20 years. He received 6.36 million francs in deferred cash and the rest in UBS shares valued at 18.5 million francs when they were awarded. UBS did not disclose his other compensation for 2012.
Mr. Ermotti replaced Robert J. McCann, the head of the wealth management operation for the Americas, as the best paid board member in 2012. Mr. McCann earned 8.55 million francs last year, down from 9.18 million francs in 2011.
The bank’s total bonus pool fell 7 percent to 2.5 billion francs from 2.7 billion francs a year earlier. UBS said it clawed back about 60 million francs in awarded compensation from staff linked to the interest rate manipulation scandal.
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