UBS Cuts Back Exec Bonuses
UBS financial services firm, which asked for $60 billion worth of bailout money last month from the Swiss government, is instituting a new bonus structure for top executives that could actually take money away from directors if they make risky investments that lead to losses.
UBS Chairman Peter Kurer, who already has sworn off 2007 and 2008 bonuses, will receive a fixed 2009 salary of $1.68 million.
Further, the company is instituting a "bonus malus" system. The term is common in the insurance industry -- it rewards good drivers, for instance, with a discount on their premiums and punishes bad drivers by increasing their rates.
At UBS, if risky short-term investments lead to company losses, directors will have money taken from them. It also will apply to managers in UBS's high-risk businesses, the company said.
The move is in response to blowback against corporate managers who continue to receive big bonuses and golden parachutes even as their companies seek government handouts. And the Swiss government mandated a say in executive compensation as part of the terms of the bailout.
Here's a fact box detailing the new bonus structure.
Shares of UBS hit an all-time low today.
-- Frank Ahrens
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