Top Bankers Win Reprieve as Swiss Lawmakers Reject Bonus Ban
(Bloomberg) — Swiss lawmakers rejected plans to ban bonuses for top bankers such as UBS Group AG Chief Executive Officer Sergio Ermotti, voting overwhelmingly against a landmark crackdown on the nation’s financial industry.
Parliament’s upper house on Thursday toppled the proposed bill to rein in “bonus-driven incentive systems” that “promote an aggressive risk culture” with a 32 to 9 majority.
“It’s a real encroachment on economic freedom to simply prohibit a single industry from paying bonuses,” Finance Minister Karin Keller-Sutter, who opposed the measure alongside the rest of the government, said before the Bern-based parliament.
The legislation — introduced almost five years ago by a Socialist lawmaker — would have also targeted the variable pay of senior executives at other systemically important Swiss lenders Raiffeisen Group, Zuercher Kantonalbank and PostFinance.
The decision comes after UBS revealed that it increased its bonus pool for some units by as much as 20%. Ermotti received variable pay of 12.1 million francs ($15.6 million), boosting his overall compensation for the year 2025 to 14.9 million francs.
The proposed bonus ban would have marked the biggest upheaval in Swiss executive pay since the 2013 “fat cats” initiative, which ushered in sweeping curbs on top-level remuneration.
Those reforms introduced annual shareholder votes on pay and banned golden parachutes and merger bonuses. Despite those measures, pay for top managers has been rising since the Covid pandemic.
Meanwhile, Credit Suisse’s spectacular demise — and state-orchestrated rescue by UBS in 2023 — have boosted efforts to curb packages that reward excessive risk taking.
Keller-Sutter had previously raised concerns about the levels paid out to executives such as Ermotti, brought in to oversee the takeover. While it’s up to shareholders to sign off on such amounts, they exceed “the imagination of any normal citizen,” she said in 2024.
On Thursday, she said that the government is in favor of bonus clawbacks in case of management failures at big banks, but doesn’t consider a ban on variable compensation appropriate.
A push to install a fixed cap on top executives’ pay had already failed in the Swiss parliament, with lawmakers instead opting for a more general clause that bonuses shouldn’t be paid if the business isn’t going well.
That chimes with moves elsewhere in Europe, with the Netherlands recently moving to water down a longstanding rule that limits variable compensation for bankers to a fifth of their fixed pay. Dutch banks have long criticized the cap, saying it makes it harder for them to hire talent. Previously, an upper limit had also been scrapped in the UK.
Switzerland is currently undergoing a far-reaching overhaul of its financial regulation to address what the government says are the root causes of the Credit Suisse failure. But instead of capping pay, the plan focuses on capital requirements for UBS, the nation’s biggest bank, as well as the powers of Finma, the financial regulator.
–With assistance from Myriam Balezou.
©2026 Bloomberg L.P.
