By John Revill
ZURICH (Reuters) – Switzerland’s finance minister took aim at bonus excesses and inflated salaries at banks on Wednesday as she unveiled 22 proposals designed to strengthen the Swiss financial sector after the implosion of Credit Suisse last year.
Karin Keller-Sutter said she would have to work for 30 years to earn the equivalent of UBS Chief Executive Sergio Ermotti, who became Europe’s highest paid banker last year with a package worth 14.4 million Swiss francs ($15.83 million).
“I cannot comprehend certain sums,” said Keller-Sutter, who earns 473,000 Swiss francs a year as a member of the Swiss cabinet, according to the government.
“I may be a bit old-fashioned, but as a child I once learned that the measure of all things is the salary of a Federal Councillor,” she added. “Well, that hasn’t been the measure of all things for a long time, has it?”
UBS did not immediately respond to a request for comment on the minister’s remarks about Ermotti’s pay.
Setting out plans aimed at ensuring UBS does not suffer the same fate as Credit Suisse, Keller-Sutter said the government would disincentivise reckless corporate behaviour and excessive bonuses, and take steps to enable them to be clawed back.
The government said the payment systems of banks should be improved to prevent false incentives. However, it said capping variable payments would not be effective.
“A cap is likely to increase fixed salaries,” it said.
Keller-Sutter warned pay levels were upsetting people, especially when linked to failures like Credit Suisse.
Huge salaries were also leading to a disconnect between business and the population, she said.
“Independently of UBS and independently of individuals and companies, I have to say it does bother me,” she said.
“This level, not just at UBS, but also at other companies, we have seen compensation is being paid out here again that surpasses the imagination of every normal citizen. And I don’t think this is a good development.”
($1 = 0.9097 Swiss francs)
(Reporting by John Revill; Editing by Alexander Smith)
