UBS AG (NYSE:UBS), Switzerland’s largest bank by assets, hiked its CEO’s pay by 21% over his pay package for the previous year.

UBS

However, the bank’s re-engineered investment bank head became its most highly paid executive.

CEO received $12.3 million

In its annual report published Friday, UBS AG (NYSE:UBS) revealed it hiked chief executive Sergio Ernotti’s pay by a fifth last year to 10.73 million Swiss francs ($12.30 million). However, the highest paid executive of the bank was its investment banking chief Andrea Orcel, who earned 11.43 million francs in 2013.

The bank’s Chairman Axel Weber was paid nearly 6.1 million francs in 2013.

UBS’ recent initiatives

UBS AG (NYSE:UBS) has undertaken a number of initiatives in the past year to reduce its investment bank and shift focus away from riskier trading activities to its wealth management and retail operations. The bank cut 10,000 jobs last year as part of the overhaul.

As part of its reorganization initiatives, in November, UBS AG (NYSE:UBS) combined its currency, interest rates and credit trading businesses.

Analysts led by Christopher Wheeler of Mediobanca believed UBS AG (NYSE:UBS) might be dusting off plans for disposing of the investment bank, as regulators are demanding more capital. The analysts pointed out that with competitors unlikely to make a bid for the operations; the bank could spin off its investment unit to existing shareholders and create a London-based firm with stock traded in the UK.

Analysts led by Christopher Wheeler of Mediobanca believed UBS AG (NYSE:UBS) might be dusting off plans for disposing of the investment bank, as regulators are demanding more capital. The analysts pointed out that with competitors unlikely to make a bid for the operations; the bank could spin off its investment unit to existing shareholders and create a London-based firm with stock traded in the UK.

In 2008 and 2009 the credibility of Switzerland’s largest bank, UBS, the country’s fabled banking secrecy and the Swiss wealth management industry fell like dominoes under attack from a concerted US campaign against tax evasion.

Strong investment bank performance

UBS AG (NYSE:UBS)’s investment bank head, Andrea Orcel took over in late 2012. The bank said his pay was based on the strong performance of the investment bank which has slimmed down and avoided certain high-risk investments.

The bank has also specifically praised Mr. Orcel for pushing for the “highest standards of employee conduct and behavior whilst at the same time addressing issues from the past”.

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