Peter Wuffli is forced to step down as CEO of UBS

Thomas Coyle

6 July 2007

Swiss bank's board rejects Wuffli as heir apparent to chairman Marcel Ospel. Peter Wuffli has resigned as CEO of UBS. He has been replaced by Marcel Rohner, formerly Wuffli's deputy and head of the Zurich-based megabank's wealth-management and business-banking division.

Rohner "is well prepared for his new role and enjoys the full and undivided confidence of" UBS' board of directors, according to UBS.

Raoul Weil, now head of UBS' international wealth-management business, will take Rohner's place as leader of UBS' global wealth-management and business-banking businesses.

Succession planning

In addition to stepping down as UBS' senior manager, Wuffli has relinquished "all of his functions at UBS," according to a statement from UBS board of directors.

Wuffli's departure seems to be connected to a dispute over succession between UBS' board on one side and UBS chairman Marcel Ospel -- who has agreed to serve "at least" one more three-year term in that role, apparently at the board's urging -- and Wuffli on the other.

"A year ago, as part of UBS's systematic management succession planning, Marcel Ospel expressed a wish to initiate a generational change of management at UBS and therefore retire from his function within the foreseeable future," according to UBS' board. "He also proposed that Peter Wuffli be nominated his successor. After careful evaluation, the board of directors decided not to accept his proposal. It does not view the succession of the CEO to the position of chairman as automatic. Instead, the board identifies independently the composition of the leadership team which, in its opinion, suits the bank the best."

UBS' board and Wuffli "therefore decided to institute generational change only in UBS's operational management," the statement continues.

Wuffli, who is 49, succeeded Ospel, who will be 57 next month, as CEO of UBS in 2001. Ospel in fact has been a kind of mentor to Wuffli since their days together at Swiss Bank Corporation , which merged with Union Bank of Switzerland in 1998 to form UBS.

Ewige Einheit

UBS is giving short shrift to the notion -- mainly promulgated by the Wall Street Journal -- that Wuffli got the ax because he favored breaking the bank up.

"There was no disagreement over strategy," UBS group spokesman Cristoph Meier told Reuters late yesterday. "There was nothing like that."

UBS is still wedded to a "one-bank strategy" that combines investment banking with wealth and asset management, Meier emphasized.

Those who like the idea that Wuffli is out because he wanted to spin off UBS' investment-banking business point to the bank's recent hedge-fund woes. In May 2007 it closed its Dillon Read Capital Management alternative-investment unit after it owned up to a $124-million loss in the subprime-mortgage market.

UBS' new CEO Rohner is 42. He began his career as a teaching assistant with the Institute for Empirical Research in Economics at the University of Zurich. He joined Union Bank of Switzerland in 1992 as assistant to the bank's head of derivatives. The next year he joined SBC as head of European market-risk control for its Warburg Dillion Read investment-banking subsidiary.

Weil is 47. He started his career with SBC in 1984, initially in portfolio-management systems development, then as a private-banking executive.

UBS is the biggest wealth manager in the world. -FWR