It's only been 9 months since he joined ubs e Sergio Ermotti it already appears highest paid banker in Europe. So much so that it could come close to the maxi salaries of their American colleagues. It was right on April 1, 2023 when Ermotti is switched to driving of the Swiss bank called for the specific task of leading the integration of the Credit Suisse.
According to UBS's annual report, Ermotti received it in 9 months 14,4 million francs of which 2,1 million constitute the fixed salary and 12,3 million the variable part of the salary as a performance award. A figure almost equal to the compensation received byentire Board of Directors, to which the Swiss bank paid, including subsidiary fees, 15,2 million francs, an amount significantly higher than the 12,6 million in 2022.
The salaries of Ermotti's American colleagues
All things considered, this rich compensation of his is not light years away compared to the high peaks of the salaries of his American colleagues. Jamie Dimon, the boss of JpMorgan and James Gorman, the outgoing CEO of Morgan Stanley, according to a reconstruction by Reuters, last year they took home respectively 36 million and 37 million dollars. This mostly reflects the fact that their banks have shares that trade at double the value of their net assets.
UBS is still far from these heights. But shareholders like Cevian Capital believe the massive asset management operations of the entire Swiss group provide a path to American-style returns and valuations. The same Swiss bank is aiming for a return of 18% on primary Tier 1 capital in 2028. If Ermotti's compensation for 2023 is annualized, according to Reuters, the salary would rise to 21 million dollars, thus entering the $20 million to $40 million range for Morgan Stanley CEO compensation.
UBS will increase compensation for top executives in the coming years
ubs he currently limits his employees' compensation top executives at 5 times his annual salary of 2,5 million Swiss francs, limiting his total package to 15 million Swiss francs ($16,7 million). But UBS's own annual report says that the bank will increase this limit to 7 times in the coming years, adding 5 million Swiss francs to Ermotti's maximum payment. This generosity risks upsetting Swiss stakeholders, who have seen the government provide financial support and emergency legislation to allow UBS to save Credit Suisse. It is true that UBS highlights the fact that 80% of Ermotti's bonus is made up of stocks and bonds rather than cash. But if the bank reaches its goals, the shares will also be worth more and Ermotti will have a chance to join Wall Street's elite.
How much do Ermiotti's colleagues earn in Europe?
Perhaps the heads of European banks look at Ermiotti's paycheck with a bit of envy.
The CEO of HSBC Noel Quinn earned £10,6 million ($13,4 million), while Ana Botín, executive chairman of Santander, was paid 12,2 million euros ($13,2 million). The CEO of Deutsche Bank Christian Sewing earned €8,7 million in 2023, down slightly from €8,9 million in 2022, after a decline in the bank's profits. The CEO of BNP Paribas, the Frenchman Jean-Laurent Bonnafè, who has been with the Group since December 2011, has a total annual remuneration of approximately 4,6 million euros, made up of 40% of salary and 60% of bonuses, including company shareholdings and stock options. He appears to directly own 0,007% of the company's shares, worth 5,25 million euros.
What is happening in Italy? The pay slips of Italian bankers
Just a few days ago, Unicredit announced that its CEO, Andrea Orcel, achieved all the objectives that the shareholders had asked of him in 2023. For this, he will receive a compensation of 9,75 million euros this year compared to the previous 7,5 million. The CEO of Intesa Sanpaolo, Carlo Messina received compensation equal to just over 4 million euros between the fixed component (2,6 million euros, unchanged since 2016 and which will remain so this year too) and 1,4 million euros as the sum of the of annual awards from previous years. To this compensation, however, must be added the share component received, equal to 1,6 million euros, from previous incentive programs. Therefore, considering all the items, 5,7 million went to Messina. They follow in the Italian rankings the number one of Bpm bank, Giuseppe Castagna, whose total compensation, in 2023, should be around 3 million, and Piero Luigi Montani, CEO of Bper Banca, who, in 2022, appears to have obtained a compensation of 1,15 million.
