Firing the CEO, Part 4: Parsing the UBS statement

Swiss banking giant UBS today announced the resignation of CEO Oswald Grubel after a marathon meeting of its board in Singapore.  There was speculation all week that the scandal could ultimately cost Gruebel his job but the suddenness of his departure is a bit of a surprise.  His exit marks the fourth CEO firing in the past two weeks, and the second in the banking industry.

The statement by UBS, while more detailed than earlier commentaries, nonetheless leaves several questions unanswered.  There is no complete explanation of how the trading losses occurred and who besides the jailed trader was to blame.

It also appears that the board wanted Gruebel gone but only after a transition, which he declined to do, suggesting there was some disagreement.  Gruebel will not receive severance, according to media reports, but will continue to receive his base salary for six months – in sharp contrast to other bank CEOs who presided over major trading losses at their firms.

It’s hard to see how Sergio Ermotti, as interim CEO, will be able to accelerate the bank’s restructuring, as the board apparently wants.  Until a permanent chief executive is found, UBS can expect continued uncertainty, client and staff defections and a sideways stock price.



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