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(Bloomberg) -- UBS Group AG reduced its 2016 bonus pool and lowered Chief Executive Officer Sergio Ermotti’s pay in a year where profit plunged. The bank restated net income for the year to reflect an agreement in principle to settle a legal case.

The bonus pool dropped 17 percent to 2.9 billion Swiss francs ($2.9 billion), from 3.5 billion francs, the Zurich-based bank said in its annual report on Friday. Ermotti, 56, remains the highest-paid executive at UBS, with a total compensation of 13.7 million francs, down from the 14.3 million francs he received in 2015. That includes a 10.9 million in variable compensation for his fifth full year in the top job.

“2016 was another challenging year for the industry and UBS, marked by macroeconomic uncertainty, geopolitical tensions and divisive politics, which adversely affected client sentiment,” Chairman Axel Weber said in a letter to shareholders provided in the report.

UBS got off to a rough start last year as market volatility took a big bite out of profit. Then, as 2016 drew to a close, the bank missed out on a rally in bond trading, largely as a result of its post-crisis strategy.

UBS said it reached an agreement in principle this month with the National Credit Union Association to settle a case relating to mortgage backed securities before the financial crisis. That cut net income in the full year by 102 million francs to 3.2 billion francs.

While UBS doesn’t break down its bonus pool by division, investment bank chief Andrea Orcel has said his business didn’t do as well in 2016 as the year before. The bank boosted performance pay for the company as a whole in 2015, bucking the trend among peers.

UBS moved decisively in 2012 to pare back much of its fixed-income business to focus on wealth management. The latter suffered last year from a reluctance among the very rich to put their money to work in investments because of uncertainty over the direction of markets. Pretax profit for the group fell to 4.2 billion from 5.5 billion in 2015.

Employees at other banks also are looking at smaller checks this year. Hit by legal expenses, Deutsche Bank AG slashed its 2016 bonus pool by almost 80 percent, a figure unmatched in the bank’s recent history. HSBC Holdings Plc and Barclays Plc cut their bonus pools 12 percent and 1 percent respectively. Credit Suisse Group AG has yet to disclose its pay policies for 2016.

To contact the reporters on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net, Jan-Henrik Förster in Zurich at jforster20@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Cindy Roberts, Christian Baumgaertel

©2017 Bloomberg L.P.

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