UBS has confirmed that because of the U. S. federal grand jury indictment of former Global Wealth Management & Business Banking CEO Raoul Weil, it passed Weil's duties on to Marten Hoekstra, deputy CEO of this UBS division, which includes about 8,200 advisors.
UBS said it has ceased to provide cross-border private banking services to U.S.-domiciled clients through its non-U.S. regulated units.
Furthermore, UBS says its new compensation model will "be more closely aligned with the value creation of the firm." The chairman of the board is no longer bound to the same incentive system as the group executive board and will no longer receive variable compensation components.
Variable cash compensation for the group executive board (which includes the head of wealth management) is based on a "bonus/malus" system. A similar concept is effective for variable equity compensation.
The chairman and members of the group executive board will receive no variable compensation for 2008. The size, composition and allocation of 2008 variable compensation for other employees will be determined by the board once 2008 group results are known and the Swiss Federal Banking Commission has been consulted.
The new compensation system was discussed with the SFBC in accordance with the requirements listed in the action plan of the Swiss authorities and the standards for the financial sector, which are currently being established, according to UBS.
At rival Morgan Stanley, Chief Executive John Mack has said he will not take a bonus for 2008, according to various news reports. He also passed on his bonus last year. Morgan Stanley Co-Presidents James Gorman and Walid Chammah are also forgoing '08 bonuses. o