Basel, Switzerland (GenevaLunch) – The Basel Committee of the Bank for International Settlements has published for consultation its Pillar 3 proposed requirement for banks to regulate remuneration: notably, the long-term relationship between performance and various types of remuneration such as bonuses. The BIS published an initial outline in July 2010, but Monday 27 December it published the details of a change that is designed to avoid banks paying out high amounts of money to their managers without guarantees that the remuneration is linked to long-term performance.
Switzerland 22 December published for consultation, until March 2011, its own proposed new, tighter rules for banks in the wake of the global economic crisis and the government’s bailout of banking giant UBS at the end of 2008. One of the changes would create a mechanism for limiting bankers’ pay in the case of a bailout of a “too big to fail” bank that is “systemically” important to Switzerland’s financial and economic system, but the proposed Swiss rules do not go as far as capping pay or linking it to long-term performance for banks that are functioning independently of government aid.
Basel, Switzerland (GenevaLunch) - UBS shareholders have sent a strong measure to the bank’s directors and executives: they approved a remuneration package in a non-binding vote, the first time the issue has been put to a vote. But 40 percent of shareholders present said “no” and 5 percent abstained, for an approval rating of only 55 percent. Shareholders traditionally vote far more heavily in favour of items placed on the agenda by the board.
A moment of black humour came when Kaspar Villiger, chairman of the board and former finance minister for Switzerland, was asked by a small shareholder how much time his predecessor, Peter Kurer, had spent teaching him the ropes of his new job, for which he was presumably emminently qualified. Kurer was paid an additional CHF1 million for the handover, according to figures in the annual report. There was laughter when Villiger replied that his wife had asked him the same thing when she read the annual report.
Chairman apologizes for role in helping some US clients evade taxes, says bankers’ pay will eventually come down
Basel, Switzerland (GenevaLunch) - “Are we to blame ourselves, because we believed the board and accepted their proposals?” asked a Mr Gerber, from a group of shareholders that calls itself the Association of Persons Injured by UBS, at the annual general meeting of the bank, taking place Wednesday 14 April in Basel. “There’s only one thing that is sure, that nothing in the bank was safe . . . and certainly I cannot be blamed for that.” The group has called for a social fund to be created to reimburse shareholders who lost money, a call quickly rejected by Kaspar Villiger, chairman of the board.
Rudolf Meyer, Association for Responsible and Sustainable Economic Management (Actares), followed Meyer with harsh criticism of pay packages and pointed remarks about the lost faith of the Swiss public in the bank. He recommended that shareholders not approve two contentious agenda items: the remuneration package and a move to absolve former directors of responsibility for the bank’s 2007-2009 activities.
The two were part of what Geneva newspaper Le Temps describes as an increasingly vocal group of minority shareholders who are changing the nature of the annual meetings, speaking more critically of the decisions and behaviour of the bank’s directors and senior executives.
Chairman Kaspar Villiger opened the meeting with a prepared speech that acknowledged that “we know how much UBS – an institution of which our country was so proud – has disappointed the Swiss people.”
US bank Goldman Sachs is fighting a backlash against its plans to share profits with staff by opening a fund that will use the equivalent of about 2.3 percent of staff remuneration, or $500 million to help 10,000 small businesses. The bank Tuesday 17 November apologized publicly for the role it played in the global economic crisis. Goldman has recovered, with analysts saying they expect it to pay close to $22 billion in compensation to staff in 2009. Warren Buffett, a Goldman investor who will oversee the small business programme, told the FT it is not designed to compensate for the bank’s errors.
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