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UBS chairman takes 90 percent cut March 18, 2008 6:52 AM ET advertisement

ZURICH, Switzerland (AP) - The chairman of UBS AG, Switzerland's largest bank, is taking a 90 percent cut in compensation for 2007 after giving up his bonus -- but still will make about US$2.5 million (euro1.6 million), the bank said Monday in the aftermath of massive writedowns linked to the U.S. subprime mortgage crisis.

Marcel Ospel will get only his basic pay package -- a salary of 2 million francs (US$2 million; euro1.3 million) plus benefits and pension credits -- for a 2.57 million Swiss francs (US$2.6 million; euro1.27 million) total for 2007, the bank said in its annual report.

That is 90 percent less than 26.6 million francs he received for 2006, which contained performance-based compensation.

Ospel said in December that he would forgo a bonus payment for 2007.

UBS said that overall its senior executives will face smaller reductions and get 67 percent less compensation, with some executives receiving incentive awards as their divisions performed well despite the bank's overall bottom line.

UBS said no stock options were awarded to senior executives for 2007.

The highest paid member of the executive board, Rory Tapner, the bank's CEO for Asia Pacific, received 10.3 million francs (US$10.47 million; euro6.64 million) compensation, according to UBS.

"This reflects the losses occurred on specific trading positions in 2007, which led to an overall net loss for the group as a whole," the bank said.

UBS' stock has dropped by nearly two-thirds of the value they were a year ago. The subprime losses forced the bank to write down more than US$18 billion (euro11.57 billion) on assets and post its first annual loss since being formed in 1998. Analysts expect more writedowns to come.

UBS shares which plunged over 14 percent Monday as European financial shares took a beating on concerns about a deepening global financial crisis, were up 6.94 percent at 26.20 francs (US$26.63; euro16.89) in Zurich.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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