UBS cuts performance award pool by 17%

Swiss banking organisation UBS has decreased its 2016 performance award pool by 17% to CHF2.9 billion.

The organisation, which employs 59,387 members of staff, had a performance award pool of CHF3.5 billion in 2015.

The performance award pool includes all discretionary performance-based variable awards. It is determined by business performance, including group and division achievements against set performance targets, capital growth, and risk-adjusted profit.

The group executive board performance award pool for 2016 was CHF71.9 million, which on a per capita basis, represents a decrease of 16%. The performance award pool for the group executive board is capped at 2.5% of the organisation’s adjusted profit before tax; the 2016 pool is 1.3% of adjusted profit before tax.

Ann Godbehere, chair of the compensation committee of the board of directors at UBS, said: “In line with the group and business division performance in 2016, the firm’s total performance award management pool for the year was CHF2.9 billion, down 17% from 2015. As in previous years, the overall performance award pool was determined based on a range of performance considerations, including risk-adjusted profit and capital strength.

“Compared with most of our peers’ compensation frameworks, we believe our framework ensures a closer alignment of employee and investor interests by linking a greater proportion of variable compensation to the firm’s own equity and debt instruments and subjecting awards to longer deferral periods.

“With this approach, our compensation framework rewards longer-term performance, supports our capital base and allows us to pay competitively.”