UBS contacts bankers over chairman position

by Dave Nixon

Story link: UBS contacts bankers over chairman position

UBS has quietly contacted some of Europe’s zenith bankers to join its board of directors and ultimately replace the troubled Swiss bank’s incumbent chairman, Marcel Ospel.

The executives approached by headhunters acting for the bank consist of Bob Diamond, president of Barclays; Michael Cohrs, head of global banking at Deutsche Bank; and John Studzinski, Blackstone‘s senior managing director. Every one was told the bank was searching for an executive vice-chairman as a staging position to the chairmanship, say those familiar with the topic. Still, each rejected the offer.

In an indication that UBS has now dropped its search for a banker to replace Mr Ospel, the bank on Thursday announced that Sergio Marchionne, chief executive of Italian carmaker Fiat, would join as non-executive vice-chairman. In an acknowledgment to investors, the bank also said all directors, including Mr Ospel, would be forwarded for re-election annually as opposed to once every three years. Mr Ospel on Thursday said the board had asked him to continue for another year, but he would not obligate himself further.

The shift elevates the prospect that Mr Ospel, a mercurial strategist who architected the unions that made UBS a power in global banking, could step down as prematurely as April 2009. Nonetheless, the appointment of Mr Marchionne, who has affirmed he has no strategy to succeed Mr Ospel, protracts the uncertainty about the bank’s long-term leadership.

Mr Ospel has said in the past he desires to continue to see UBS through its predicament. At one point last year he said he had sought to leave but was swayed not to by the board. On Thursday he said they had strengthened the leadership structure in order to manage UBS’s current challenges. He proposed the new tenure rule to the board, and is prepared, pursuant to their request, to stand for re-election for one year.

Those near to UBS recognized it was still in search of bankers to reinforce its board, which investors have condemned for deficient directors with knowledge of the financial services industry. UBS’s board is thought to be eager to widen the variety of candidates who could take over from Mr Ospel when he quits.

Although the hunt for a vice-chairman has been stopped, the approaches indicate that UBS is prepared to consider widening its search for a new chairman outside Switzerland, breaking a traditional, but unspoken, supposition that the bank’s top executives must be Swiss. Credit Suisse, UBS’s main rival, last year inaugurated a foreigner as chief executive for the first time when it selected Brady Dougan.

In recent weeks, conjecture has been widespread about potential heirs to Mr Ospel. One prospective candidate, Philipp Hildebrand, an executive at the Swiss National Bank, last week said he remained dedicated to his job.

The executives contacted by the bank’s headhunters refused to comment.

Mr Ospel is next week anticipated to face annoyed UBS shareholders at an unusual general meeting to endorse an injection of SFr13bn (€8bn) in capital from Asian and Middle Eastern investors led by Singapore’s Government Investment Corporation.