UBS chief forgoes bonus during crisis

20th October 2008, Comments 0 comments

Peter Kurer will give up his bonus until the bank has recovered from losses in the financial crisis.

20 October 2008

ZURICH -- The chairman of UBS AG said Saturday he would forgo a bonus until the bank has recovered from huge losses in the global financial crisis.

Peter Kurer told Swiss radio station DRS that he would not ask for any bonus for 2007 and 2008 after the government announced a near USD 60 billion (CHF 68.4 billion) bailout package for the nation's largest bank.

Kurer said he would only expect one when the bank had recovered and if the country had not lost out because of the crisis at UBS.

Most of the bailout money announced Thursday will go to create a US$54 billion fund to buy bad securities backed by subprime U.S. mortgages and other high-risk securities.

It was unclear how much the amount of the chairman's bonus would have been, but his salary without additional payments is CHF 2 million.

Former UBS chairman Marcel Ospel saw his salary drop from CHF 26.6 million in 2006 to CHF 2.57 million in 2007 when he renounced a bonus because the bank lost billions in writedowns on subprime mortgage investments. Ospel stepped down in April under pressure from shareholders.

The government support for UBS has renewed the debate about tens of millions of francs in bonus payments for top banking managers.

Christian Levrat, president of the Social Democrat Party, said Saturday he would push for a civil suit against Ospel and the former UBS management team at the bank's extraordinary shareholders' meeting next month.

"These people should not just get away with it and continue to play golf," he was quoted as saying in an interview with daily Tages Anzeiger.

A report by the Swiss Banking Commission on Thursday criticized UBS for failing to properly manage risky positions that led the bank to write down billions of dollars.

But Peter Nobel, an economic lawyer from Zurich, told Tages Anzeiger he did not believe the banking commission's report was a sufficient basis for a successful civil suit against Ospel.

Kurer, asked about the high bonus payments to his predecessors, was quoted as saying: "The concerned persons should now think about how they assess the situation and how they can contribute."

He said to his knowledge there was no legal basis for requesting a repayment of a bonus.

[AP / Expatica]

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