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THE WALL STREET JOURNAL: UBS Shakes Up Board In Wake of Write-Downs (*Peter Voser up to his neck in UBS AG subprime-mortgage crisis)

By GORAN MIJUK
February 21, 2008 1:44 a.m.

ZURICH — UBS AG, Europe’s worst-hit bank by the subprime-mortgage crisis, Thursday proposed sweeping changes to the way its board operates and rejigged the responsibilities of several members.

UBS said the bank’s board members will have to stand for re-election every year in the future instead of every three years as required under Swiss rules.
 
Also, the bank said it has appointed Sergio Marchionne, chief executive at Italian car maker Fiat Spa, as non-executive vice chairman and Peter Voser, Chief Financial Officer at Royal Dutch Shell PLC, as chairman of the audit committee. Both managers have already been on the UBS board.

The changes come in the wake of the bank’s massive write-downs of subprime-related assets, which have prompted UBS to tap sovereign-wealth funds to prop up its balance sheet.

The problems have raised calls from shareholders to seek personnel changes at the board level, centering on Chairman Marcel Ospel, who has been the bank’s central manager during the past decade and is viewed by some observers as being responsible for UBS’s current troubles.

“With these moves we have strengthened the leadership structure in order to manage UBS’s current challenges,” said Mr. Ospel said. “I proposed the new tenure rule to the board, and am prepared, pursuant to their request, to stand for re-election for one year.”

Shareholders will have to vote on the changes at the bank’s annual general meeting in April. Messrs. Ospel and Peter Voser and Larry Weinbach will be proposed for re-election for a one-year term at this year’s AGM as their terms expire this year.

The same regulation will apply to all board members who subsequently stand for re-election after the expiration of their terms of office. As a result, by 2010 at the latest, the entire board of directors of UBS will be confirmed on a yearly basis by the AGM, the bank said.

Write to Goran Mijuk at [email protected]

*Headline comment in brackets added by John Donovan

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