By Elena Logutenkova Feb. 10 (Bloomberg) — UBS AG ’s loss in 2009 will trigger the bank’s bonus claw back mechanism for the first time, depriving senior bankers of 300 million Swiss francs ($282 million) of deferred pay they were due to receive this year. The Swiss bank introduced last year a plan that would pay 900 million francs to managing directors, executive directors and directors in equal parts in 2010, 2011 and 2012. The lender yesterday posted a 2.74 billion-franc loss for 2009, compared with a loss of 21.3 billion francs for the previous year. “The critical condition, a net profit for 2009 according to International Financial Reporting Standards, was not met,” Chief Executive Officer Oswald Gruebel said in a memo to employees dated yesterday. Politicians are stepping up pressure on banks to curb bonuses after pumping in trillions of dollars to bail out firms during the credit crisis. Zurich-based UBS received a 6 billion- franc investment from the Swiss government after amassing more writedowns and losses than any other European lender. The government sold its stake in August, earning a 1.2 billion-franc profit. “Bank salaries and bonuses are politically influenced and have become a controversial public topic as never before,” Gruebel said. “That’s why we raised the proportion of deferred share-based variable compensation for higher-paid colleagues. These decisions make possible equitable compensation as well as the coupling of bonuses to the long-term success of our firm.” UBS is paying out 2.9 billion francs in cash bonuses for 2009, 34 percent more than the previous year. The bonus pool was cut by the decision to defer a greater proportion of variable compensation into future years, Chief Financial Officer John Cryan told analysts and reporters yesterday. UBS yesterday posted its first quarterly profit in more than a year, helped by lower charges on its own debt and a tax credit. Gruebel, in the memo, reiterated that profit targets announced in November for the next three to five years, including reaching an annual pretax profit of 15 billion francs, are “realistic” and “reachable.” To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net
Original post:
UBS Claws Back $282 Million of Bonuses From Bankers After 2009 Loss Report
