Nov. 6 (Bloomberg) -- UBS AG will have to get bonuses for 2008 approved by Switzerland's banking regulator after receiving a $59.2 billion aid package from the government and the central bank last month.

The bank must get approval from the Swiss Federal Banking Commission, or EBK, for the amount, composition and distribution of this year's bonus pool, under the rules of the aid package, said Dominique Gerster, a spokesman for Zurich-based UBS. He confirmed measures outlined in a government report yesterday.

The government said that UBS's bonus payments should be reduced to what's ``absolutely necessary,'' after the aid package prompted protests over executive pay across the country. UBS said on Nov. 2 that Chief Executive Officer Marcel Rohner, his 11 colleagues on the executive board and Chairman Peter Kurer will not get any bonus payments for 2008.

``The EBK will be able to influence the amount of bonuses being paid,'' Alain Bichsel, a spokesman for the commission, said in a telephone interview today. ``We won't be deciding on individual bonuses though.''

The regulator will review UBS's revised pay guidelines, scheduled to be published on Nov. 14. The EBK will also set minimum standards for compensation policies of financial companies in Switzerland and be responsible for supervising them.

UBS paid about 12.5 billion francs ($10.7 billion) in performance-related compensation last year, of which some 6.6 billion francs, or more than half, went to the investment-bank employees that make up about a quarter of the bank's staff. The division reported a pretax loss of 16.67 billion francs for 2007.

Swiss Protests

The global wealth management and business banking unit, which had more than twice the number of employees and was responsible for 9.25 billion francs of pretax profit, got variable compensation of 2.1 billion francs.

The Swiss Social Democratic Party's youth organization and Switzerland's biggest trade union staged protests at various UBS branches, demanding repayment of all UBS bonuses for the last five years and a cap of 500,000 francs on all compensation.

UBS, as part of its compensation policy review, said it's examining legal grounds for repayment of past bonuses. The Swiss government plans changes in the country's corporate law to allow demands of compensation repayments from executives and board of directors' members.

Ospel, Wuffli

Marcel Ospel, 58, has received total compensation of almost 137 million francs as CEO and later chairman of UBS since 2000. He hasn't disclosed how much he will be paid for this year after resigning from his position in April. Ospel didn't get a bonus for 2007.

The bank is paying former CEO Peter Wuffli, former finance chief Clive Standish and ex-investment banking head Huw Jenkins 93.6 million francs in salary, deferred compensation and consulting fees from 2007 to 2009.

The EBK, which did a survey of current compensation systems this summer, plans to publish proposals for new minimum standards in the first quarter of 2009, Bichsel said.

The Swiss government said new compensation policies should make excessive risk-taking less attractive, take into account long-term performance of the company, as well as adherence to compliance principles.

New compensation policies for UBS shouldn't lead to a competitive disadvantage for the bank in Switzerland or abroad, the government said in its report to parliament.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net

Last Updated: November 6, 2008 07:36 EST