UBS - 2008 compensation for the Board of Directors and Group Executive Board

Board of Directors remuneration Group Executive Board compensation Compensation to former members of the Board of Directors and Group Executive Board

Board of Directors remuneration

Chairman of the Board of Directors and executive members of the Board of Directors

The new compensation model was not yet applicable in 2008 and the Chairman of the Board of Directors (BoD) was therefore eligible, in principle, to receive a variable incentive award fully dependent on the Group's financial performance. However, as announced in the compensation report published on 17 November 2008, the human resources and compensation committee decided against granting any variable compensation award to the Chairman of the BoD for 2008. The total compensation awarded to the Chairman of the BoD, Peter Kurer, for the 2008 financial year was CHF 1,565,647. This amount made him the highest-paid member of the BoD for 2008 and consisted of eight months salary as Chairman of the BoD. This amount does not include the four months of salary he received as a member of the Group Executive Board (GEB).

Under both the new and old compensation models, the decision process to determine the overall compensation of the Chairman of the BoD includes an annual performance assessment by the full BoD and the human resources and compensation committee. Pay levels for comparable functions outside of UBS are also taken into account.

Compensation details and additional information for executive members of the BoD
CHF, except where indicated ^a
Name, function ¹	For the year ended	Base salary	Annual incentive award (cash)	Annual incentive award (shares - fair value) ^b	Discretionary award (options - fair value) ^c	Benefits in kind ^d	Contributions to retirement benefits plans ^e	Total
Peter Kurer, Chairman	2008	1,333,333	0	0	0	58,267	174,047	1,565,647
Peter Kurer, Chairman	2007
Marcel Ospel, Chairman	2008	666,667	0	0	0	80,755	87,023	834,445
Marcel Ospel, Chairman	2007	2,000,000	0	0	0	307,310	261,069	2,568,379
Stephan Haeringer, Executive Vice Chairman	2008	1,125,000	0	0	0	108,846	195,802	1,429,648
Stephan Haeringer, Executive Vice Chairman	2007	1,500,000	0	0	0	111,808	261,069	1,872,877
Marco Suter, Executive Vice Chairman	2008
Marco Suter, Executive Vice Chairman	2007	1,125,000	0	0	0	70,820	155,252	1,351,072

1 2008: Peter Kurer was the only executive member in office on 31 December; Marcel Ospel did not stand for re-election in April 2008 and Stephan Haeringer stepped down during the year as a member of the BoD. Both their payments are pro-rata for the four respective nine-month periods served in their functions. 2007: Marco Suter stepped down during the year as a member of the BoD. His 2007 payment was pro-rata for the nine-month period served as Executive Vice Chairman.

Remuneration for former executive members and the former Chairman of the Board of Directors

Marcel Ospel, former Chairman of the BoD, did not stand for re-election at the AGM of 23 April 2008. Stephan Haeringer, former executive vice chairman of the BoD, retired from the BoD on 2 October 2008. Marco Suter, formerly an executive member of the BoD, stepped down from the BoD on 1 October 2007 and thereafter acted as Group Chief Financial Officer (Group CFO) and as a member of the GEB until his stepping down from this role on 31 August 2008. While Marcel Ospel has retired from UBS as of April 2008, Stephan Haeringer and Marco Suter agreed with UBS to continue their services for UBS until their termination dates of 30 September 2009 and 31 August 2009 respectively.

All three persons were contractually entitled to receive a base salary, a payment based on their average remuneration over the last three years and certain employment benefits until the expiry of their 12-month notice period.

For the fiscal years 2007 and 2008, Marcel Ospel, Stephan Haeringer and Marco Suter did not receive any incentive awards. Furthermore, on 25 November 2008, Marcel Ospel, Stephan Haeringer and Marco Suter announced that they voluntarily relinquished substantial parts of the payments to which they were entitled during their periods of employment with UBS. The total amount waived or repaid was CHF 33 million.

The remaining contractual obligations to all three former BoD members, consisting of those due in 2008 and those upcoming in 2009, net of the CHF 33 million voluntarily waived or repaid, amounted to CHF 10 million. This amount has been fully accrued in 2008 and is reflected in the firm's 2008 income statement. Of this amount, CHF 2.3 million was for Marcel Ospel, CHF 3.9 million for Stephan Haeringer and CHF 3.8 million for Marco Suter.

Independent members of the Board of Directors

Reflecting their independent status, the remuneration of independent members of the BoD includes no variable component and is therefore not dependent on the financial performance of the UBS Group (Group). Fees for independent members are reviewed annually by the Chairman of the BoD and the human resources and compensation committee for approval by the BoD. None of the independent members of the BoD has any contract with UBS providing for benefits upon the termination of their term of office at the BoD.

The BoD substantially reduced the fees payable to members of its committees for 2008. This decision was made following consideration of market practice in comparable global financial services and other relevant companies in Switzerland.

The table on the prior page shows remuneration for independent members of the BoD between the 2008 and 2009 AGMs.

Remuneration details and additional information for independent members of the BoD
CHF, except where indicated ^a
Name, function ¹	Audit committee	HR & compensation committee	Governance & nominating committee	Corporate responsibility committee	Risk committee	Strategy committee	For the period AGM to AGM	Base fee	Committee retainer(s)	Benefits in kind	Additional payments	Total	Share percentage ³	Number of shares ^4,5
Ernesto Bertarelli, member		M	M				2008/2009	325,000	200,000	0	0	525,000	100	51,596
Ernesto Bertarelli, member			M				2007/2008	325,000	150,000	0	0	475,000	100	14,677
Sally Bott, member ²		M		M			2008/2009	162,500	75,000	0	0	237,500	50	12,280
Sally Bott, member ²							2007/2008
Rainer-Marc Frey, member ²					M	M	2008/2009	162,500	150,000	0	0	312,500	50	16,158
Rainer-Marc Frey, member ²							2007/2008
Bruno Gehrig, member ²	M						2008/2009	162,500	100,000	0	0	262,500	50	13,572
Bruno Gehrig, member ²							2007/2008
Gabrielle Kaufmann-Kohler, member			C	M			2008/2009	325,000	250,000	0	0	575,000	50	29,731
Gabrielle Kaufmann-Kohler, member			M	M			2007/2008	325,000	250,000	0	0	575,000	50	9,349
Sergio Marchionne, senior independent director, vice chairman			M			M	2008/2009	325,000	200,000	0	250,000 ⁶	775,000	100	76,228
		M					2007/2008	325,000	200,000	0	0	525,000	100	16,226
Rolf A. Meyer, member ²	M	M					2008/2009	162,500	150,000	0	0	312,500	50	16,158
Rolf A. Meyer, member ²	M	C					2007/2008	325,000	650,000	0	0	975,000	50	15,853
Helmut Panke, member		M			M		2008/2009	325,000	300,000	0	0	625,000	50	32,316
Helmut Panke, member			C				2007/2008	325,000	250,000	0	0	575,000	50	9,349
William G. Parrett, member ²	M						2008/2009	162,500	100,000	0	0	262,500	50	13,572
William G. Parrett, member ²							2007/2008
David Sidwell, member				M	C		2008/2009	325,000	450,000	0	0	775,000	50	40,072
David Sidwell, member							2007/2008
Peter Spuhler, member ²							2008/2009	162,500	0	0	0	162,500	100	15,945
Peter Spuhler, member ²		M					2007/2008	325,000	200,000	0	0	525,000	100	16,226
Peter R. Voser, member	C					M	2008/2009	325,000	400,000	0	0	725,000	50	37,487
Peter R. Voser, member	M						2007/2008	325,000	300,000	0	0	625,000	50	10,162
Lawrence A. Weinbach, member ²	M						2008/2009	162,500	100,000	0	0	262,500	50	13,572
Lawrence A. Weinbach, member ²	C						2007/2008	325,000	600,000	0	0	925,000	50	15,040
Joerg Wolle, member		C	M				2008/2009	325,000	300,000	0	0	625,000	50	32,316
Joerg Wolle, member			M				2007/2008	325,000	150,000	0	0	475,000	100	14,677
Total 2008												6,437,500
Total 2007												5,675,000
Legend: C = Chairman of the respective committee; M = Member of the respective committee
1 There were 11 independent BoD members in office on 31 December 2008. David Sidwell was appointed at the AGM on 23 April 2008 and Rolf A. Meyer, Peter Spuhler and Lawrence A. Weinbach stepped down from the BoD at the EGM on 2 October 2008. Sally Bott, Rainer-Marc Frey, Bruno Gehrig and Bill G. Parrett were appointed at the EGM on 2 October 2008. 2 Remunerations is for six months only, as such members either stepped down or were appointed on 2 October 2008. 3 Fees are paid 50% in cash and 50% in restricted UBS shares. However, independent BoD members can elect to have 100% of their remuneration paid in restricted UBS shares. 4 For 2008, shares valued at CHF 11.38 (average price of UBS shares at SWX Europe over the last 10 trading days of February 2009), attributed with a price discount of 15%, discount price CHF 9.67. The shares are blocked for four years. For 2007, shares valued at CHF 36.15 (average price of UBS shares at SWX Europe over the last 10 trading days of February 2008), attributed with a price discount of 15%, discount price CHF 30.75. The shares are blocked for four years. 5 Number of shares is reduced in case of the 100% election to deduct social security contribution. All remuneration payments are submitted to social security contribution/taxes at source. 6 This payment is associated with the newly created function of a senior independent director. In addition, one-off cash payments were made to the chair of the risk committee (CHF 500,000), the governance and nominating committee (CHF 300,000) and the human resources and compensation committee (CHF 200,000). These payments reflect the substantial workload of setting up the new risk committee, and expanding the mandate of the governance and nominating committee and the human resources and compensation committee.

Total payments to all members of the BoD
CHF, except where indicated ^a	For the year ended	Total
Aggregate of all members of the BoD	2008	10,267,240
Aggregate of all members of the BoD	2007	11,467,328

Group Executive Board compensation

In 2008, total compensation for members of the GEB was reduced significantly from the prior year. The reduction occurred because, due to the overall negative Group result, no variable compensation was granted to GEB members for the performance year 2008. The total compensation for the highest-paid member of the GEB, Marcel Rohner, amounted to CHF 1,814,702 for the financial year 2008.

Total compensation for all members of the GEB
CHF, except where indicated ^a
Name, function	For the year ended	Base salary	Annual incentive award (cash)	Annual incentive award (shares; fair value) ^b	Discretionary award (options; fair value) ^c	Benefits in kind ^d	Contributions to retirement benefits plans ^e	Total
Marcel Rohner, Group Chief Executive Officer (highest-paid)	2008	1,500,000	0	0	0	161,768	152,934	1,814,702
Rory Tapner, Chairman & CEO Asia Pacific (highest-paid)	2007	1,291,960	4,501,900	4,501,904	0	10,256	900	10,306,920
Aggregate of all members of the GEB who were in office on 31 December 2008 ¹	2008	7,815,943	0	0	0	457,652	817,315	9,090,911
Aggregate of all members of the GEB who were in office on 31 December 2007 ¹	2007	6,995,885	15,305,667	15,305,708	0	532,706	912,974	39,052,939
Aggregate of all members of the GEB who stepped down during 2008 ²	2008	1,614,871	0	0	0	234,838	258,423	2,108,132
Aggregate of all members of the GEB who stepped down during 2007 ²	2007	2,511,947	23,042,376	6,750,036	0	406,567	275,635	32,986,561
1 Number and distribution to senior executives: 2008: 12 GEB members in office on 31 December. 2007: eight GEB members in office on 31 December. 2 Number and distribution of senior executives: 2008: includes four months in office as a GEB member for Peter Kurer, eight months in office for Marco Suter and 10 months for Joe Scoby. 2007: includes nine months in office for Huw Jenkins and Clive Standish and six months for Peter Wuffli.

Base salary

Base salaries are established to be appropriate for the role of each senior executive on an individual basis. Base salaries consist of a fixed amount of compensation and any adjustments are limited to significant changes in job responsibility.

Due to the variability of annual incentive awards, the ratio of base salary to total compensation can vary significantly from year to year. Since no variable incentive awards were paid for the financial year 2008, base salaries for senior executives and employers contribution to retirement benefit plans amounted to 93.7% of total compensation compared with 20.6% in 2007. The remainder of 6.3% reflects benefits in kind.

Benefits

In order to help attract and retain the best employees in each local market where it operates, UBS provides employee benefits that are competitive within each of these markets. Changes, terminations and the introduction of new benefits are governed by the procedures contained in the "Organization Regulations of UBS AG". UBS considers benefits to be a supplemental element of total compensation and the benefits offered may vary substantially from location to location.

Generally there are no special benefits for senior executives; they receive the same benefits as all other employees in the location and business where they work.

In Switzerland, senior UBS executives share the same retirement plan benefits as all other employees. The firm's general pension plan is made up of two defined contribution elements: one plan covering base salary and the other covering variable compensation.

Outside Switzerland, senior UBS executives participate in appropriately-designed local pension plans (in which other employees also participate) which do not provide special provisions for senior executives. In the US, senior executives can choose to participate in a 401K-defined contribution plan which is open to all employees. In addition, some executives participate in legacy defined benefit plans which were available to other employees but are no longer available to new hires. In the UK, senior executives either participate in a pension plan operated on a defined contribution basis or participate in a legacy defined benefit plan which was open to all employees but is closed to participation for new hires. No special pension schemes are offered to senior executives.

Refer to "Note 30 Pension and other post-retirement benefit plans" in the financial statements of this report for details on the various retirement benefit plans established in Switzerland and other major markets

Cash and equity incentives

"Pay for performance" is the guiding principle of the UBS executive compensation policy. As discussed above, the human resources and compensation committee decided not to grant any variable cash or equity compensation to GEB members for 2008. This decision recognizes the overall poor performance of the Group and the failure to achieve key performance targets despite some highly successful businesses within each of the business divisions.

Replacement of forfeited awards for former employer compensation

Jerker Johansson and Markus Diethelm joined UBS during 2008. In total, they were granted 574,432 shares with a grant date fair market value of CHF 10.7 million, 700,000 options with a strike price of CHF 36.46 and 7,420 options with a strike price of CHF 28.10, as well as a cash amount of CHF 370,000. In line with market practice, these awards were granted as a replacement for compensation and benefits forfeited from their previous employment as a result of joining UBS.

Employment contracts

There were no material changes to employment agreements for existing GEB members during 2008 and the 12-month notice period remained unchanged for the financial year 2008.

Compensation to former members of the Board of Directors and Group Executive Board

Compensation and benefits in kind paid to former members of the BoD and the GEB reflect legacy agreements still honored by UBS.

Compensation paid to former members of the BoD and GEB¹
CHF, except where indicated ^a
Name, function	For the year ended	Compensation	Benefits in kind	Total
Georges Blum, former member of the BoD (Swiss Bank Corporation)	2008		101,579	101,579
	2007		90,803	90,803
Franz Galliker, former member of the BoD (Swiss Bank Corporation)	2008		69,596	69,596
	2007		62,174	62,174
Walter G. Frehner, former member of the BoD (Swiss Bank Corporation)	2008		74,663	74,663
	2007		73,061	73,061
Hans (Liliane) Strasser, former member of the BoD (Swiss Bank Corporation)	2008		32,673	32,673
	2007		42,311	42,311
Robert Studer, former member of the BoD (Union Bank of Switzerland)	2008		126,208	126,208
	2007		260,162	260,162
Alberto Togni, former member of the BoD (UBS)	2008	318,461	427,949	746,410
Alberto Togni, former member of the BoD (UBS)	2007	318,401	502,478	820,879
Philippe de Weck, former member of the BoD (Union Bank of Switzerland)	2008		109,703	109,703
	2007		129,701	129,701
Aggregate of all former members of the GEB ²	2008	0	171,180	171,180
Aggregate of all former members of the GEB ²	2007	0	257,791	257,791
Aggregate of all former members of the BoD and GEB	2008	318,461	1,113,551	1,432,012
Aggregate of all former members of the BoD and GEB	2007	318,401	1,418,481	1,736,882

1 Compensation or remuneration that is connected with the former members' activity on the BoD or GEB, or that is not at market conditions. 2 Includes two former GEB members.

Explanations of compensation details for executive members of the BoD and members of the GEB:
a. Local currencies are converted into CHF using the exchange rates as detailed in "Note 39 Currency translation rates" in the financial statements of this report.
b. Values per share at grant: CHF 36.15 / USD 33.55 for shares granted in 2008 related to the performance year 2007. CHF prices are the average price of UBS shares at SWX Europe over the last 10 trading days of February, and USD prices are the average price of UBS shares at the NYSE over the last 10 trading days of February in the year in which they are granted.
c. No options were granted in 2009 for the performance year 2008.
d. Benefits in kind - car leasing, company car allowance, staff discount on banking products and services, health and welfare benefits and general expense allowances - are all valued at market price.
e. Swiss senior executives participate in the same pension plan as all other employees. Under this plan, employees receive a company contribution to the plan which covers compensation up to CHF 820,800. The retirement benefits consist of a pension, a bridging pension and a one-off payout of accumulated capital. Employees must also contribute to the plan. This figure excludes the mandatory employer's social security contributions (AHV, ALV) but includes the portion attributed to the employer's portion of the legal BVG requirement. The employee contribution is included in the base salary and annual incentive award components. In both the US and the UK, senior executives participate in the same plans as all other employees. In the US there are two different plans, one of which operates on a cash balance basis, which entitles the participant to receive a company contribution based on compensation limited to USD 250,000. This plan is no longer available to new hires. US senior executives may also participate in the UBS 401K-defined contribution plan (open to all employees), which provides a company matching contribution for employee contributions. In the UK, senior executives participate in either the principal pension plan, which is limited to an earnings cap of GBP 100,000, or a grandfathered defined benefit plan which provides a pension on retirement based on career average base salary (uncapped).

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