UPDATE: Ethos Recommends UBS Holders Reject New Pay Plan At AGM

Shareholder activist Ethos Wednesday called for UBS AG (UBS) shareholders to reject an overhaul to the Swiss bank's pay practices at an April 15 general meeting.

Geneva-based Ethos said the new system, which came after a review of hefty executive pay packages despite massive losses, might still lead to high pay because UBS hasn't set a cap on base salary.

UBS, which declined to comment Wednesday, agreed last year to put the pay plan to an advisory shareholder vote, meaning it is non-binding.

The recommendation from Ethos, influential because it advises many Swiss pension funds, comes as scrutiny on executive pay intensifies. In an advisory vote, shareholders of Roche Holding AG (ROG.VX) recently approved the Swiss drugmaker's executive pay.

For UBS, Ethos wants to limit bonus pay to 50% of overall compensation, saying the absence of a cap could allow bonuses to reach as much as 90% of overall pay.

"Both the shareowners and the regulatory authorities have recently put into question remuneration systems allowing for particularly high variable parts that can potentially create the wrong incentives and lead to excessive risk-taking," Ethos said in a statement.

Company Web site: http://www.ethosfund.ch

-By Katharina Bart, Dow Jones Newswires; [phone]; [e-mail]