18 Nov 2008

Bonus system axed at UBS

3:31 pm on 18 November 2008

Swiss bank UBS has axed bonuses for top executives and is to introduce a more transparent pay system.

Shares in UBS slumped to a new all-time low on Monday as the bank continues to struggle in the sub-prime credit crisis.

The bank says chairman Peter Kurer, chief executive Marcel Rohner and other executive board members would not get any bonuses this year.

Under a new system, the chairman will receive a fixed salary. The chairman's fixed-pay for this year was 2 million Swiss francs ($US1.68 million).

UBS is the first large European lender to introduce a radical overhaul of its executive pay system.

Other major European players like Royal Bank of Scotland, Lloyds TSB and HBOS will not pay bonuses after taking British government cash and some top executives at Deutsche Bank have waived their bonus.

The Swiss government demanded a say in future compensation policy as part of an cash injection of 6 billion Swiss francs for UBS a month ago.