UBS Group chief executive officer Sergio Ermotti criticised the debate surrounding banker pay as “populistic” amid a heated exchange with a former Bank of England deputy governor.
“If you have that problem with compensation, let’s have a review of how the economy is compensated and not just pointing at bankers,” said Ermotti responding to questions at a conference in London yesterday. “This is very simplistic and it’s part exactly of the problem that was created by trying to be focused on compensation and only on compensation and mainly by people that were frustrated because they’re not making that kind of money.”
Ermotti was responding to a discussion at the conference with Paul Tucker. The UBS banker said Tucker should look at the facts, and added that banking is one of the few industries to publish compensation details, unlike other sectors.
Last year, the Swiss lender handed out the smallest bonuses in four years. Even so, Ermotti remained the highest-paid executive at the bank, receiving 13.7mn Swiss francs ($11.7mn), down from the 14.3mn francs in 2015.
His comments come after BoE governor Mark Carney signalled that the UK will review a cap on banker bonuses after Britain leaves the European Union. Banker pay has been in focus since the UK government was forced to bail out Royal Bank of Scotland Plc and Lloyds Banking Group Plc for a combined £65.5bn pounds ($88bn) during the financial crisis. The limit on bonuses inside the EU at twice fixed pay has been around since 2014.
CEOs across Europe have warned employees not to expect big bonuses this year. Credit Suisse Group AG’s CEO Tidjane Thiam, who agreed to accept a lower bonus, said employees shouldn’t think about a big pay rise for 2017.