We aim to attract and engage a diverse talented workforce and strive to provide our employees with market-competitive pay and incentives. At the same time, ensuring the long-term success of the firm is our foremost priority.

Our approach recognizes the need to compensate individuals for their business performance within the context of increasingly competitive market conditions, a fast-changing commercial environment and evolving regulatory oversight.

Our compensation structure is designed to be appropriately balanced between fixed and variable elements. Emphasis is placed on the variable component as an incentive to excel and to foster a performance-driven culture, while supporting appropriate and controlled risk taking. We always take a holistic view of employee compensation within a total reward framework that takes into account base salary, discretionary incentives and benefits. This is in addition to non-financial elements such as development opportunities or flexible working arrangements.

We support employee share ownership in various forms because we believe it encourages personal accountability for business actions and decisions. At the end of 2010, an estimated 55% of employees held UBS shares, while an estimated 50% held UBS stock options.

Our Total Reward Principles (see right) serve as the framework for our compensation decisions and compensation programs across UBS.