Annual General Meeting of UBS
At the Annual General Meeting held on 18 April in Basel, UBS shareholders elected Ernesto Bertarelli to the Board of Directors. They also approved the recommendation of the Board of Directors to distribute CHF 2.00 per share in the form of a par value repayment instead of a dividend for the 2001 financial year. Marcel Ospel, Chairman of the Board of Directors of UBS, dealt in detail with the issues of corporate governance and senior executive remuneration. He disclosed his total compensation for 2001 of CHF 12.5 million. The General Meeting was attended by 2347 shareholders representing 323,986,488 votes.
At the Annual General Meeting held on 18 April, UBS shareholders approved the annual report and Group financial statements for the 2001 financial year and granted discharge to the members of the Board of Directors and Group Executive Board. Markus Kündig, non-executive Vice Chairman of the UBS Board of Directors, retired, having reached the statutory age limit. Shareholders elected Ernesto Bertarelli, CEO of Serono International AG, as a new member of the Board of Directors for a four-year term of office.
Par value repayment and cancellation of shares
Shareholders approved the recommendation of the Board of Directors to distribute CHF 2.00 per share in the form of a par value repayment instead of a dividend. Shareholders also approved the motion to definitively cancel 28,818,690 shares repurchased subsequent to a resolution passed at the 2001 Annual General Meeting. As a result of these two resolutions, share capital will be reduced by a total of approximately CHF 2.6 billion.
Up-to-date corporate governance
In his address Marcel Ospel took a detailed look at corporate governance at UBS. He emphasised the role of the Board of Directors, which is defined by law as the body charged with the ultimate direction of the company, and is involved in the strategic management of the Group, critical personnel decisions and the risk approval and risk supervision processes. He outlined the three principal committees of the Board of Directors which are set up to safeguard shareholders' interests: the Audit Committee, which reviews the financial reporting process and control mechanisms, the Nomination Committee, which proposes candidates for election to the Board of Directors, and the Compensation Committee, which fixes the remuneration of senior executives.
Marcel Ospel went on to state that the Group has for many years subscribed to modern international practice and has regularly updated its corporate governance standards. UBS complies not only with the regulations of the US Securities & Exchange Commission but also with the new code of conduct drafted by economiesuisse", Switzerland's business federation, and the SWX Swiss Exchange.
Compensation policy in the interests of shareholders
UBS has published the total compensation of members of the Board of Directors, Group Executive Board and Group Managing Board since 1998, as well as the total amount of shares, options and warrants held by this group.
The new corporate governance directive adopted by the SWX Swiss Exchange on 17 April 2002 will require more extensive disclosure, which UBS will comply with in its 2002 Annual Report. At today's Annual General Meeting, Marcel Ospel, as the member of the Board of Directors with the highest total remuneration, stated that his individual compensation for 2001 (in the form of cash, shares and options) amounted to CHF 12.5 million. While the new SWX directive increases transparency, UBS believes that publishing the remuneration of individual directors and senior executives cannot prevent abuse. Effective corporate governance remains the best guarantee for ensuring that compensation policy is in line with shareholders' interests.
At UBS, alignment of compensation with performance and shareholders' interests are assured. The Compensation Committee, chaired by an external, non-executive director, takes all decisions relating to senior executive compensation. The total compensation of senior executives consists of a base salary plus a performance-linked component. At the start of each year, individual goals and objectives are defined and, during the annual performance review, these goals are compared with results. Any variances are reflected in compensation. In 2001, for instance, this meant that the total compensation of senior executives, excluding the UBS PaineWebber management, was reduced by an average of 22%. For executive directors and senior executives, 50% of total compensation is payable in cash and 50% in shares, which are subject to a 5-year holding period. The Compensation Committee can in addition at its discretion award options, which are also subject to holding periods.
Peter Wuffli, President of the Group Executive Board, also dealt with compensation issues in his address. He underlined that at UBS all employees were remunerated in line with their individual performance. Equity participation plans were open to all employees, allowing them to participate in the success of UBS.
Forward-looking corporate culture
Both the Chairman of the Board of Directors and the President of the Group Executive Board declared their confidence in the future of UBS. They emphasised the Group's strategy, which had stood the test during the turbulent events of 2001, its high-caliber client franchise and the professionalism of its employees. A major factor in the Group's success, said Peter Wuffli, is its corporate culture which is constantly ready to embrace change without abandoning what has stood the test of time. UBS had repeatedly demonstrated this ability in the course of its various acquisitions in recent years and had always emerged strengthened.
Responsibility to the community
Peter Wuffli in conclusion emphasised UBS's responsibility to the community, underlined by the creation last year of a Corporate Responsibility Committee, composed of members of the Board of Directors, the Group Executive Board and the Group Managing Board. This committee is an important high-level forum for addressing issues such as money laundering, the financing of terrorism as well as non-discrimination at the workplace and charitable or local community initiatives taken by employees.
Basel, 18 April 2002
Invitation and Agenda
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