2015 compensation

UBS delivered excellent performance in 2015, against the backdrop of a challenging market environment. Our compensation decisions reflect our commitment to deliver competitive compensation for excellent performance while balancing returns to our investors and meeting global regulatory capital requirements. The approach we take to compensation supports the firm’s commitment to sustained longer-term profitability, a strong capital position and aligns compensation with investors’ interests.

In 2015, despite a volatile and uncertain market, we delivered strong net profit attributable to UBS Group AG shareholders of CHF 6.2 billion, a 79% increase compared with a year earlier, and our adjusted Group profit before tax1  more than doubled to CHF 5.6 billion. The firm's strong capital position was increased further while return on tangible equity exceeded the Group's target for the year. 

As a result, the Board of Directors (BoD) intends to propose to shareholders at the Annual General Meeting (AGM) 2016 an increase in the ordinary dividend of 20% compared with 2014, as well as a special dividend of CHF 0.25 per share. Including the proposed dividends for financial year 2015, we will have returned CHF 7.5 billion to shareholders since the acceleration of our strategy in 2012. 

The firm’s total performance award pool for 2015 was CHF 3.5 billion, an increase of 14% compared with the prior year. Determination of the performance award pool was based on a range of performance metrics, including risk-adjusted profitability and capital strength.

2015 compensation framework

Our compensation framework has remained largely unchanged since 2012. However, to better align with the market, we have reduced deferral rates for performance awards for those employees at the lower end of the deferral scale thus increasing the proportion of cash compensation awarded to these individuals.

The firm’s compensation vehicles (i.e., the form of performance awards and the related deferral approach) are designed to reinforce appropriate risk-taking and reward longer-term performance. Compared with our peers, we believe UBS has greater alignment with our investors, as we place a greater proportion of variable compensation subject to longer deferral periods in the firm’s own equity and debt instruments.

For 2015, on average across the firm, 38% of performance awards were deferred, and for the Group CEO and other Group Executive Board members (GEB) on average 86% of their performance awards were deferred for up to five years. Our compensation structure, including the use of debt instruments, allows us to pay competitively, while also supporting our capital requirements. As of 31 December 2015, CHF 1.9 billion of the Deferred Contingent Capital Plan (DCCP) was included in our eligible capital, making up 0.9% of our total capital ratio.