‘Pay back your bonus! Now! Immediately!’
Switzerland reacted angrily against former top managers of Swiss banking giant UBS, calling on them to return their bonuses, after the bank had to be rescued by the state from the credit crisis. Read on...business Updated: Oct 17, 2008 23:24 IST
Switzerland reacted angrily on Friday against former top managers of Swiss banking giant UBS, calling on them to return their bonuses, after the bank had to be rescued by the state from the credit crisis.
“Mr Ospel, pay back your bonus! Now! Immediately!” screamed the front page of tabloid Blick, referring to former UBS Chairman Marcel Ospel.
Ospel was forced to resign earlier this year, handing over his job to Peter Kurer, after the bank incurred billions in damages due to the US subprime mortgage crisis.
Chairman of UBS since 2001, Ospel has been the whipping boy of the crisis, irking many with the massive bonuses he raked in during the bank’s better years.
In an interview with Swiss weekly magazine Bilan earlier this year, Swiss president Pascal Couchepin said: “I’m outraged that Marcel Ospel has earned Pharaoh-like salaries for four to five years and that when the bank wobbles, he can keep it all.”
Blick pointed out that while Ospel had given up his bonus in 2007, he cashed in 24 million francs’ worth of bonuses in 2006. “As a reminder: Under Ospel’s leadership, UBS tumbled into its deepest crisis ever,” said the newspaper.
The centre-right political party FDP also called on former UBS managers to return their bonuses.
“To be liberal means no free pass for irresponsible leadership of companies... The previous leadership of UBS had collapsed. We demand that they at least pay back the bonuses they had received in the past years,” the party said in a statement.
But the bank’s current chairman Kurer said that there were no legal grounds to seek the money back.”In order to demand money back from someone, you need to prove that in the legal sense, a wrongful act was committed. That was not the case. There is no legal ground to demand that the bonuses be returned.”
Switzerland leapt to the rescue of the once-mighty UBS with a $60-billion lifeline on Thursday. The government acknowledged that steps were needed to shore up confidence in Swiss banking, particularly in UBS, the country's biggest bank, which saw a colossal net outflow of funds reaching 83.7 billion Swiss francs in the third quarter as clients took their assets elsewhere.