In a heated annual meeting on Thursday, UBS shareholders voted against the performance of board directors and senior management.
Just 42% gave their support to senior management in a largely symbolic rejection which has no legal ramifications.
However, given that 89.7% of shareholders voted in favour of their performance at last year’s annual investor meeting, the vote shows a clear dissatisfaction of the Swiss bank’s leadership by its biggest shareholders.
Their main gripe: UBS’s handling of a French court case for assisting clients in France illegally conceal assets worth billions of euros between 2004 and 2012.
UBS had the option to settle out of court but instead decided to go to court and came away with the biggest fine in the Swiss bank’s history.
French authorities demanded UBS pay a total of €4.5bn, the equivalent of its entire 2018 profits.
Speaking to shareholders on Thursday, UBS chairman, Axel Weber, said the vote was “a reflection of your concern about uncertainty surrounding the court case in France”.
Executive pay prevails
Despite shareholder dissatisfaction over their performance, senior management walked away from the annual meeting with their pay intact.
This is despite calls from shareholders and activist investors, including ISS and Glass Lewis, to vote down the salaries of senior management. Their main concern was the 2018 pay package for CEO Sergio Ermotti, which amounted to CHF 13.8m ($13.5m), excluding benefits, one of the biggest packages in Europe for a CEO.
One disgruntled shareholder pointed out to Thursday’s meeting that Ermotti earns the entire annual salary of a junior clerk in just a few days.
However, the move against executive pay was noted. The proposal was voted through by 74.4% of shareholders, which was “lower than in previous years”, acknowledged Weber. “We will take this as an opportunity to review again our compensation report and review it where necessary”.
Also on shareholder’s minds at the meeting were the poor set of results UBS posted a week previously. The first quarter of 2019 saw the Swiss bank bring in net profits attributable to shareholders of $1.14bn, a slump of 27% from $1.56bn in the same quarter of 2018.