Julius Baer Shareholders Approve CEO’s $6.7 Million PayGiles Broom
Julius Baer Group Ltd. shareholders approved the bank’s 2013 compensation report in a non-binding vote, a year after rejecting the Swiss bank’s pay plan.
Investors accepted the report, including total compensation of 5.9 million Swiss francs ($6.7 million) for Chief Executive Officer Boris Collardi, in a vote at the annual general meeting today, the Zurich-based company said in an e-mailed statement.
“In response to the rejection of last year’s remuneration report, the board of directors reassessed and reshaped the group’s compensation system from the ground up,” Daniel Sauter, chairman of Julius Baer, said in a speech published on the company’s website. “Through discussions with many shareholders, we learned what we needed to change.”
The report was backed by 92.1 percent in the vote, according to an e-mail from Sabine Jaenecke, a spokeswoman for Julius Baer, the third-largest Swiss wealth manager.
Julius Baer rose 0.9 percent to 41.31 francs by 4:02 p.m. in Zurich trading, trimming the stock’s decline this year to 3.6 percent.
Julius Baer is revising compensation after opposition to excessive pay stiffened among the Swiss following the government bailout of UBS AG, Switzerland’s biggest bank, in 2008 and a plan -- later scrapped -- by Novartis AG to pay departing Chairman Daniel Vasella as much as $78 million.
Last year, 64 percent of Julius Baer shareholders rebuffed the 2012 pay of Collardi, 39, in a non-binding vote.
In March of last year, Swiss voters approved rules giving shareholders a binding vote on managers’ pay. All publicly traded Swiss companies have to implement the rules, known as the fat-cat initiative, by 2015.
UBS and Credit Suisse Group AG, the nation’s second-biggest bank, will hold their usual non-binding votes on pay and ask shareholders to approve plans for adapting to the new rules at annual meetings in May. UBS boosted CEO Sergio Ermotti’s compensation by 21 percent to 10.73 million francs last year. Credit Suisse raised CEO Brady Dougan’s pay by 26 percent to
9.79 million francs.
Vontobel Holding AG, a Swiss asset and wealth manager, voluntarily held a binding vote at its annual shareholder meeting on April 2, in which investors approved the compensation of the board of directors and executive management.
Julius Baer has said it’s implementing closer links between pay and performance, aligning the mixture of compensation methods with “prevailing market practices” and capping bonuses. The total management variable compensation for 2013 won’t exceed four times the sum of their base salaries and the company plans additional caps for 2014, the Zurich-based company said in the pay report on March 3.
Collardi, from Nyon, Switzerland, stopped a program of financial awards linked to integrating non-U.S. Merrill Lynch wealth-management units acquired from Bank of America Corp. in
2012. His compensation declined 12 percent last year after an 800,000-franc one-time payment related to the Merrill Lynch deal wasn’t repeated, according to the pay report.
Transferring Merrill Lynch clients and the profitability of units being absorbed were, however, among criteria for executive variable compensation in 2013. The company said in February it expects the purchase will add client assets toward the lower end of a target range of 57 billion francs to 72 billion francs, after 40 billion francs were booked and paid for last year.
Collardi told investors today that Julius Baer is working closely with the U.S. authorities to reach a settlement to a three-year probe by the Department of Justice. The bank is under investigation for helping Americans hide money from the Internal Revenue Service in a cross-border business that the company closed between 2009 and 2011. The probe has embroiled at least 14 Swiss banks.
“We are confident that this tax issue of the past can be resolved in the foreseeable future,” Collardi said.
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