Employee benefits: variable compensation	12 Months Ended
Dec. 31, 2021
Entity [Table]
Employee benefits: variable compensation [text block]	Note 28 Employee benefits: variable compensation a) Plans offered The Group has several share-based and other deferred compensation plans that align the interests of Group Executive Board (GEB) members and other employees with the interests of investors. Share-based awards are granted in the form of notional shares and, where permitted, carry a dividend equivalent that may be paid in notional shares or cash. Awards are settled by delivering UBS shares at vesting, except in jurisdictions where this is not permitted for legal or tax reasons. Deferred compensation awards are generally forfeitable upon, among other circumstances, voluntary termination of employment with UBS. These compensation plans are also designed to meet regulatory requirements and include special provisions for regulated employees. The most significant deferred compensation plans are described below. › Refer to Note 1a item 5 for a description of the accounting policy related to share-based and other deferred compensation plans Mandatory deferred compensation plans The Long-Term Incentive Plan The Long-Term Incentive Plan (LTIP) is a mandatory deferred share-based compensation plan for senior leaders of the Group (i.e., GEB members and selected senior management). The number of notional shares delivered at vesting depends on two equally weighted performance metrics over a three - year performance period: reported return on common equity tier 1 capital and relative total shareholder return, which measures the performance of UBS against an index of Global Systemically Important Banks as determined by the Financial Stability Board. The final number of shares will vest in three equal installments in each of the three years following the performance period for GEB members, and cliff vest in the first year following the performance period for selected senior management. The Equity Ownership Plan The Equity Ownership Plan (EOP) is a deferred share-based compensation plan for employees who are subject to deferral requirements but do not receive LTIP awards. Vesting under the EOP generally occurs in equal installments two and three years after grant, subject to continued employment and, in certain cases, achievement of defined performance conditions. Asset Management employees receive some or all of their EOP in the form of cash-settled notional investment funds. The amount delivered depends on the value of the underlying investment funds at the time of vesting. The Deferred Contingent Capital Plan The Deferred Contingent Capital Plan (DCCP) is a deferred compensation plan for all employees who are subject to deferral requirements. Such employees are awarded notional additional tier 1 (AT1) capital instruments, which, at the discretion of UBS, can be settled as a cash payment or a perpetual, marketable AT1 capital instrument. DCCP awards generally vest in full after five years, unless the award is written down following the occurrence of a viability event (as defined under the terms of an AT1 instrument) or if the Group’s CET1 capital ratio falls below a defined threshold. Additional performance conditions apply to GEB members. Interest payments on DCCP awards are paid at the discretion of UBS. Where interest payments are not permitted, such as for certain regulated employees, the DCCP award reflects the fair value of the granted non-interest-bearing award. Financial advisor variable compensation In line with market practice for US wealth management businesses, the compensation for US financial advisors in Global Wealth Management predominantly includes production payout and deferred compensation awards. Production payout is primarily based on compensable revenue. Financial advisors may also qualify for deferred compensation awards, which generally vest over a six-year period. These awards are based on strategic performance measures, including production and length of service with UBS. Production payout rates and deferred compensation awards may be reduced for, among other things, errors, negligence or carelessness, or failure to comply with the firm’s rules, standards, practices and / or policies, and / or applicable laws and regulations. Financial advisor compensation also includes expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Share delivery obligations Share delivery obligations related to employee share-based compensation awards were 175 million shares as of 31 December 2021 (31 December 2020: 172 million shares). Share delivery obligations are calculated on the basis of undistributed notional share awards, taking applicable performance conditions into account. As of 31 December 2021, UBS held 149 million treasury shares (31 December 2020: 157 million) that were available to satisfy share delivery obligations. b) Effect on the income statement Effect on the income statement for the financial year and future periods The table below provides information about compensation expenses related to total variable compensation, including financial advisor variable compensation, that were recognized in the financial year ended 31 December 2021, as well as expenses that were deferred and will be recognized in the income statement for 2022 and later. The majority of expenses deferred to 2022 and later that are related to the 2021 performance year pertain to awards granted in February 2022. The total unamortized compensation expense for unvested share - based awards granted up to 31 December 2021 will be recognized in future periods over a weighted average period of 2.5 years. Variable compensation including financial advisor variable compensation Expenses recognized in 2021 Expenses deferred to 2022 and later 1 USD million Related to the 2021 performance year Related to prior performance years Total Related to the 2021 performance year Related to prior performance years Total Non-deferred cash 2,383 (10) 2,373 0 0 0 Deferred compensation awards 405 412 817 797 624 1,421 of which: Equity Ownership Plan 183 180 363 393 184 577 of which: Deferred Contingent Capital Plan 140 158 297 299 329 628 of which: Long-Term Incentive Plan 54 19 73 50 33 83 of which: Asset Management EOP 29 56 84 56 78 133 Variable compensation – performance awards 2,788 402 3,190 797 624 1,421 Variable compensation – other 2 191 38 229 215 182 397 Total variable compensation excluding financial advisor variable compensation 2,979 440 3,419 1,012 806 1,818 Financial advisor variable compensation 4,134 248 4,382 434 641 1,075 of which: non-deferred cash 3,858 (6) 3,853 0 0 0 of which: deferred share-based awards 106 51 157 123 146 269 of which: deferred cash-based awards 170 202 372 311 495 806 Compensation commitments with recruited financial advisors 3 41 438 479 662 1,682 2,344 Total FA variable compensation 4,175 685 4,860 1,097 2,323 3,419 Total variable compensation including FA variable compensation 7,155 1,125 8,280 4 2,109 3,129 5,238 1 Estimate as of 31 December 2021. Actual amounts to be expensed in future periods may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2021 performance year” columns represent commitments entered into in 2021. 4 Includes USD 651 million in expenses related to share-based compensation (performance awards: USD 435 million; other variable compensation: USD 59 million; financial advisor compensation: USD 157 million). A further USD 85 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 5 million related to role-based allowances; social security: USD 64 million; other personnel expenses: USD 16 million related to the Equity Plus Plan). Total personnel expense related to share-based equity-settled compensation excluding social security was USD 641 million. Variable compensation including financial advisor variable compensation (continued) Expenses recognized in 2020 Expenses deferred to 2021 and later 1 USD million Related to the 2020 performance year Related to prior performance years Total Related to the 2020 performance year Related to prior performance years Total Non-deferred cash 2,167 (26) 2,141 0 0 0 Deferred compensation awards 341 727 1,068 756 288 1,044 of which: Equity Ownership Plan 137 327 463 306 69 376 of which: Deferred Contingent Capital Plan 112 351 463 280 196 476 of which: Long-Term Incentive Plan 42 11 54 50 10 61 of which: Asset Management EOP 49 39 88 120 12 132 Variable compensation – performance awards 2,508 701 3,209 756 288 1,044 Variable compensation – other 2 126 94 220 181 192 374 Total variable compensation excluding financial advisor variable compensation 2,634 795 3,429 938 480 1,418 Financial advisor variable compensation 3,356 233 3,589 350 602 952 of which: non-deferred cash 3,154 0 3,154 0 0 0 of which: deferred share-based awards 69 50 119 79 135 214 of which: deferred cash-based awards 133 183 316 271 467 738 Compensation commitments with recruited financial advisors 3 22 480 502 473 1,682 2,155 Total FA variable compensation 3,378 713 4,091 822 2,284 3,106 Total variable compensation including FA variable compensation 6,012 1,508 7,520 4 1,760 2,764 4,524 1 Estimate as of 31 December 2020. Actual amounts to be expensed in future periods may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2020 performance year” columns represent commitments entered into in 2020. 4 Includes USD 686 million in expenses related to share-based compensation (performance awards: USD 517 million; other variable compensation: USD 50 million; financial advisor compensation: USD 119 million). A further USD 100 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 4 million related to role-based allowances; social security: USD 54 million; other personnel expenses: USD 42 million related to the Equity Plus Plan). Total personnel expense related to share-based equity-settled compensation excluding social security was USD 691 million. Variable compensation including financial advisor variable compensation (continued) Expenses recognized in 2019 Expenses deferred to 2020 and later 1 USD million Related to the 2019 performance year Related to prior performance years Total Related to the 2019 performance year Related to prior performance years Total Non-deferred cash 1,894 (26) 1,868 0 0 0 Deferred compensation awards 299 588 887 429 608 1,036 of which: Equity Ownership Plan 122 300 422 205 219 424 of which: Deferred Contingent Capital Plan 113 262 375 173 365 538 of which: Long-Term Incentive Plan 39 0 39 25 0 25 of which: Asset Management EOP 25 26 51 26 23 49 Variable compensation – performance awards 2,193 562 2,755 429 608 1,036 Variable compensation – other 2 159 88 246 117 232 349 Total variable compensation excluding financial advisor variable compensation 2,352 650 3,001 545 840 1,385 Financial advisor variable compensation 3,233 268 3,501 197 710 907 of which: non-deferred cash 3,064 0 3,064 0 0 0 of which: deferred share-based awards 57 48 106 54 130 183 of which: deferred cash-based awards 112 219 331 144 580 724 Compensation commitments with recruited financial advisors 3 32 510 542 350 1,617 1,967 Total FA variable compensation 3,265 778 4,043 548 2,327 2,874 Total variable compensation including FA variable compensation 5,617 1,428 7,045 4 1,093 3,166 4,259 1 Estimate as of 31 December 2019. Actual amounts expensed may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2019 performance year” columns represent commitments entered into in 2019. 4 Includes USD 610 million in expenses related to share-based compensation (performance awards: USD 461 million; other variable compensation: USD 43 million; financial advisor compensation: USD 106 million). A further USD 61 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 10 million related to role-based allowances; social security: USD 25 million; other personnel expenses: USD 27 million related to the Equity Plus Plan). Total personnel expense related to share-based equity-settled compensation excluding social security was USD 619 million. c) Outstanding share-based compensation awards Share and performance share awards Movements in outstanding share-based awards during 2021 and 2020 are provided in the table below. Movements in outstanding share-based compensation awards Number of shares 2021 Weighted average grant date fair value (USD) Number of shares 2020 Weighted average grant date fair value (USD) Outstanding, at the beginning of the year 174,900,395 12 156,064,763 14 Awarded during the year 68,721,549 15 72,250,157 11 Distributed during the year (52,137,287) 13 (46,899,362) 15 Forfeited during the year (10,906,096) 13 (6,515,164) 13 Outstanding, at the end of the year 180,578,561 13 174,900,395 12 of which: shares vested for accounting purposes 107,828,979 118,260,527 The total carrying amount of the liability related to cash-settled share-based awards as of 31 December 2021 and 31 December 2020 was USD 37 million and USD 36 million, respectively. d) Valuation UBS share awards UBS measures compensation expense based on the average market price of UBS shares on the grant date as quoted on the SIX Swiss Exchange, taking into consideration post-vesting sale and hedge restrictions, non-vesting conditions and market conditions, where applicable. The fair value of the share awards subject to post-vesting sale and hedge restrictions is discounted on the basis of the duration of the post-vesting restriction and is referenced to the cost of purchasing an at-the-money European put option for the term of the transfer restriction. The grant date fair value of notional shares without dividend entitlements also includes a deduction for the present value of future expected dividends to be paid between the grant date and distribution.
UBS AG
Entity [Table]
Employee benefits: variable compensation [text block]	Note 28 Employee benefits: variable compensation a) Plans offered UBS has several share-based and other deferred compensation plans that align the interests of Group Executive Board (GEB) members and other employees with the interests of investors. Share-based awards are granted in the form of notional shares and, where permitted, carry a dividend equivalent that may be paid in notional shares or cash. Awards are settled by delivering UBS shares at vesting, except in jurisdictions where this is not permitted for legal or tax reasons. Deferred compensation awards are generally forfeitable upon, among other circumstances, voluntary termination of employment with UBS. These compensation plans are also designed to meet regulatory requirements and include special provisions for regulated employees. The most significant deferred compensation plans are described below. For the majority of variable compensation awards granted under such plans to employees of UBS AG, the grantor entity is UBS Group AG. Expenses associated with these awards are charged by UBS Group AG to UBS AG. For the purpose of this Note, references to shares refer to UBS Group AG shares. › Refer to Note 1a item 5 for a description of the accounting policy related to share-based and other deferred compensation plans Mandatory deferred compensation plans The Long-Term Incentive Plan The Long-Term Incentive Plan (LTIP) is a mandatory deferred share-based compensation plan for senior leaders of the Group (i.e., GEB members and selected senior management). The number of notional shares delivered at vesting depends on two equally weighted performan ce metrics over a three - year performance period: reported return on common equity tier 1 capital and relative total shareholder return, which measures the performance of UBS against an index of Global Systemically Important Banks as determined by the Financial Stability Board. The final number of shares will vest in three equal installments in each of the three years following the performance period for GEB members, and cliff vest in the first year following the performance period for selected senior management. The Equity Ownership Plan The Equity Ownership Plan (EOP) is a deferred share-based compensation plan for employees who are subject to deferral requirements but do not receive LTIP awards. Vesting under the EOP generally occurs in equal installments two and three years after grant, subject to continued employment and, in certain cases, achievement of defined performance conditions. Asset Management employees receive some or all of their EOP in the form of cash-settled notional investment funds. The amount delivered depends on the value of the underlying investment funds at the time of vesting. The Deferred Contingent Capital Plan The Deferred Contingent Capital Plan (DCCP) is a deferred compensation plan for all employees who are subject to deferral requirements. Such employees are awarded notional additional tier 1 (AT1) capital instruments, which, at the discretion of UBS, can be settled as a cash payment or a perpetual, marketable AT1 capital instrument. DCCP awards generally vest in full after five years, unless the award is written down following the occurrence of a viability event (as defined under the terms of an AT1 instrument) or if the Group’s CET1 capital ratio falls below a defined threshold. Additional performance conditions apply to GEB members. Interest payments on DCCP awards are paid at the discretion of UBS. Where interest payments are not permitted, such as for certain regulated employees, the DCCP award reflects the fair value of the granted non-interest-bearing award. Financial advisor variable compensation In line with market prac tice for US wealth management businesses, the compensation for US financial advisors in Global Wealth Management predominantly includes production payout and deferred compensation awards. Production payout is primarily based on compensable revenue. Financial advisors may also qualify for deferred compensation awards, which generally vest over a six-year period. These awards are based on strategic performance measures, including production and length of service with UBS. Production payout rates and deferred compensation awards may be reduced for, among other things, errors, negligence or carelessness, or failure to comply with the firm’s rules, standards, practices and / or policies, and / or applicable laws and regulations. Financial advisor compensation also includes expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. b) Effect on the income statement Effect on the income statement for the financial year and future periods The table below provides information about compensation expenses related to total variable compensation, including financial advisor variable compensation, that were recognized in the financial year ended 31 December 2021, as well as expenses that were deferred and will be recognized in the income statement for 2022 and later. The majority of expenses deferred to 2022 and later that are related to the 2021 performance year pertain to awards granted in February 2022. The total unamortized compensation expense for unvested share - based awards granted up to 31 December 2021 will be recognized in future periods over a weighted average period of 2.5 years. Variable compensation including financial advisor variable compensation Expenses recognized in 2021 Expenses deferred to 2022 and later 1 USD million Related to the 2021 performance year Related to prior performance years Total Related to the 2021 performance year Related to prior performance years Total Non-deferred cash 2,136 (8) 2,128 0 0 0 Deferred compensation awards 389 399 788 767 606 1,373 of which: Equity Ownership Plan 175 174 350 374 180 553 of which: Deferred Contingent Capital Plan 134 151 285 290 318 608 of which: Long-Term Incentive Plan 51 17 69 48 32 79 of which: Asset Management EOP 29 55 84 56 77 133 Variable compensation – performance awards 2,525 391 2,916 767 606 1,373 Variable compensation – other 2 163 33 196 210 178 388 Total variable compensation excluding financial advisor variable compensation 2,688 424 3,112 978 784 1,762 Financial advisor variable compensation 4,134 248 4,382 434 641 1,075 of which: non-deferred cash 3,858 (6) 3,853 0 0 0 of which: deferred share-based awards 106 51 157 123 146 269 of which: deferred cash-based awards 170 202 372 311 495 806 Compensation commitments with recruited financial advisors 3 41 438 479 662 1,682 2,344 Total FA variable compensation 4,175 685 4,860 1,097 2,323 3,419 Total variable compensation including FA variable compensation 6,863 1,109 7,973 4 2,074 3,107 5,181 1 Estimate as of 31 December 2021. Actual amounts to be expensed in future periods may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2021 performance year” columns represent commitments entered into in 2021. 4 Includes USD 631 million in expenses related to share-based compensation (performance awards: USD 419 million; other variable compensation: USD 56 million; financial advisor compensation: USD 157 million). A further USD 77 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 5 million related to role-based allowances; social security: USD 59 million; other personnel expenses: USD 13 million related to the Equity Plus Plan). Variable compensation including financial advisor variable compensation (continued) Expenses recognized in 2020 Expenses deferred to 2021 and later 1 USD million Related to the 2020 performance year Related to prior performance years Total Related to the 2020 performance year Related to prior performance years Total Non-deferred cash 1,948 (29) 1,920 0 0 0 Deferred compensation awards 329 704 1,034 734 277 1,011 of which: Equity Ownership Plan 131 315 446 298 67 365 of which: Deferred Contingent Capital Plan 108 339 448 271 189 459 of which: Long-Term Incentive Plan 41 11 52 46 9 55 of which: Asset Management EOP 49 39 88 120 12 132 Variable compensation – performance awards 2,278 675 2,953 734 277 1,011 Variable compensation – other 2 109 92 201 176 189 364 Total variable compensation excluding financial advisor variable compensation 2,387 768 3,155 909 465 1,375 Financial advisor variable compensation 3,356 233 3,589 350 602 952 of which: non-deferred cash 3,154 0 3,154 0 0 0 of which: deferred share-based awards 69 50 119 79 135 214 of which: deferred cash-based awards 133 183 316 271 467 738 Compensation commitments with recruited financial advisors 3 22 480 502 473 1,682 2,155 Total FA variable compensation 3,378 713 4,091 822 2,284 3,106 Total variable compensation including FA variable compensation 5,765 1,481 7,246 4 1,732 2,749 4,481 1 Estimate as of 31 December 2020. Actual amounts to be expensed in future periods may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2020 performance year” columns represent commitments entered into in 2020. 4 Includes USD 666 million in expenses related to share-based compensation (performance awards: USD 498 million; other variable compensation: USD 49 million; financial advisor compensation: USD 119 million). A further USD 88 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 4 million related to role-based allowances; social security: USD 51 million; other personnel expenses: USD 34 million related to the Equity Plus Plan). Variable compensation including financial advisor variable compensation (continued) Expenses recognized in 2019 Expenses deferred to 2020 and later 1 USD million Related to the 2019 performance year Related to prior performance years Total Related to the 2019 performance year Related to prior performance years Total Non-deferred cash 1,706 (24) 1,682 0 0 0 Deferred compensation awards 287 576 863 413 592 1,005 of which: Equity Ownership Plan 115 294 410 198 213 412 of which: Deferred Contingent Capital Plan 109 256 365 166 356 521 of which: Long-Term Incentive Plan 38 0 38 23 0 23 of which: Asset Management EOP 25 26 51 26 23 49 Variable compensation – performance awards 1,993 553 2,545 413 592 1,005 Variable compensation – other 2 140 85 225 115 228 343 Total variable compensation excluding financial advisor variable compensation 2,133 638 2,770 528 820 1,348 Financial advisor variable compensation 3,233 268 3,501 197 710 907 of which: non-deferred cash 3,064 0 3,064 0 0 0 of which: deferred share-based awards 57 48 106 54 130 183 of which: deferred cash-based awards 112 219 331 144 580 724 Compensation commitments with recruited financial advisors 3 32 510 542 350 1,617 1,967 Total FA variable compensation 3,265 778 4,043 548 2,327 2,874 Total variable compensation including FA variable compensation 5,398 1,416 6,814 4 1,076 3,146 4,222 1 Estimate as of 31 December 2019. Actual amounts expensed may vary, e.g., due to forfeiture of awards. 2 Consists of replacement payments, forfeiture credits, severance payments, retention plan payments and interest expense related to the Deferred Contingent Capital Plan. 3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2019 performance year” columns represent commitments entered into in 2019. 4 Includes USD 595 million in expenses related to share-based compensation (performance awards: USD 448 million; other variable compensation: USD 42 million; financial advisor compensation: USD 106 million). A further USD 54 million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD 10 million related to role-based allowances; social security: USD 23 million; other personnel expenses: USD 22 million related to the Equity Plus Plan). c) Outstanding share-based compensation awards Share and performance share awards Movements in outstanding share-based awards under the EOP during 2021 and 2020 are provided in the table below. The awards presented are granted by UBS AG, but are based on UBS Group AG shares. Movements in outstanding share-based compensation awards Number of shares 2021 Weighted average grant date fair value (USD) Number of shares 2020 Weighted average grant date fair value (USD) Outstanding, at the beginning of the year 54,557 13 90,443 14 Awarded during the year 278,756 15 19,229 11 Distributed during the year (24,176) 13 (55,114) 14 Forfeited during the year (13,215) 15 0 0 Outstanding, at the end of the year 295,921 15 54,557 13 of which: shares vested for accounting purposes 116,775 53,216 The total carrying amount of the liability related to cash-settled share-based awards as of 31 December 2021 and 31 December 2020 was USD 3 million and USD 1 million, respectively. d) Valuation UBS share awards UBS measures compensation expense based on the average market price of UBS shares on the grant date as quoted on the SIX Swiss Exchange, taking into consideration post-vesting sale and hedge restrictions, non-vesting conditions and market conditions, where applicable. The fair value of the share awards subject to post-vesting sale and hedge restrictions is discounted on the basis of the duration of the post-vesting restriction and is referenced to the cost of purchasing an at-the-money European put option for the term of the transfer restriction. The grant date fair value of notional shares without dividend entitlements also includes a deduction for the present value of future expected dividends to be paid between the grant date and distribution.

Employee benefits: variable compensation

12 Months Ended

Dec. 31, 2021

Entity [Table]

Employee benefits: variable compensation [text block]

Note 28

Employee benefits: variable compensation

a) Plans offered

The

Group

has

several

share-based

and

other

deferred

compensation

plans

that

align

the

interests

Group

Executive

Board (GEB) members

and other employees with

the interests of

investors.

Share-based awards are granted in the form of notional shares

and, where

permitted,

carry a dividend

equivalent

that may be

paid

notional

cash.

Awards

are

settled

delivering

UBS

at vesting,

except

in jurisdictions

where

this

is not

permitted

for legal

or tax

reasons.

Deferred compensation awards are

generally forfeitable upon,

among other circumstances,

voluntary termination

of employment

with UBS. These

compensation plans

are

also designed

meet

regulatory

requirements

and

include

special

provisions

for

regulated employees.

The most significant

deferred compensation

plans are described

below.

›

Refer to Note 1a

item 5 for a description of the accounting

policy

related to share-based and other deferred compensation

plans

Mandatory deferred compensation plans

The Long-Term Incentive Plan

The

Long-Term

Incentive

Plan

(LTIP)

mandatory

deferred

share-based

compensation plan

for senior

leaders of

the Group

(i.e., GEB members and selected senior management).

The number of notional

shares delivered at

vesting depends on

two

equally

weighted

performance

metrics

over

three

year

performance

period:

reported

return

common

equity

tier

capital and relative

total shareholder return,

which measures the

performance

UBS

against

index

Global

Systemically

Important Banks as determined by the Financial Stability Board.

The final number of shares will vest in three equal installments

in each

of the

three years

following the

performance period

for

GEB

members,

and

cliff

vest

the

first

year

following

the

performance period for selected senior management.

The Equity

Ownership

Plan

The

Equity

Ownership

Plan

(EOP)

deferred

share-based

compensation

plan

for

employees

who

are

subject

deferral

requirements but

do not

receive LTIP

awards. Vesting

under the

EOP

generally

occurs

equal

installments

two

and

three

years

after

grant,

subject

continued

employment

and,

certain

cases, achievement of defined performance conditions.

Asset Management employees receive some or all of

their EOP

the

form

cash-settled

notional

investment

funds.

The

amount

delivered

depends

the

value

the

underlying

investment funds at the time of vesting.

The Deferred

Contingent

Capital

Plan

The

Deferred

Contingent

Capital

Plan

(DCCP)

deferred

compensation plan for all

employees who are

subject to deferral

requirements.

Such employees

are awarded

notional

additional

tier

1 (AT1) capital

instruments,

which, at

the discretion

of UBS, can

settled as a cash

payment or a perpetual, marketable AT1

capital

instrument. DCCP

awards

generally

vest

full

after

five

years,

unless the

award is

written down

following the

occurrence of

viability

event (as

defined under

the terms

of an AT1 instrument)

if the

Group’s CET1 capital

ratio falls below

a defined

threshold.

Additional performance

conditions

apply

to GEB members.

Interest payments

on DCCP awards

are paid at the

discretion of

UBS.

Where interest

payments

are not

permitted,

such

as for

certain

regulated employees,

the DCCP

award reflects

the fair value

of the

granted non-interest-bearing

award.

Financial advisor variable compensation

line

with

market

practice

for

wealth

management

businesses, the compensation for US financial advisors in Global

Wealth Management

predominantly includes

production payout

and

deferred

compensation

awards.

Production

payout

primarily based

on compensable revenue.

Financial advisors may

also qualify

for deferred

compensation awards,

which generally

vest over

a six-year

period. These

awards are

based on

strategic

performance

measures,

including

production

and

length

service

with

UBS.

Production

payout

rates

and

deferred

compensation awards

may be

reduced for,

among other

things,

errors,

negligence or

carelessness, or

failure to

comply with

the

firm’s

rules,

standards,

practices

and

policies,

and

applicable laws and regulations.

Financial advisor

compensation also

includes expenses

compensation

commitments

with

financial

advisors

entered

into

the

time

recruitment

that

are

subject

vesting

requirements.

Share delivery obligations

delivery

obligations

employee

share-based

compensation awards were

175

million shares as of

31 December

2021

(31 December

2020:

172

million

shares).

delivery

obligations are

calculated on

the basis

of undistributed

notional

awards,

taking

applicable

performance

conditions

into

account.

As of 31 December 2021,

UBS held

149

million treasury shares

(31 December

2020:

157

million)

that

were

available

satisfy

share delivery obligations.

b) Effect on the income statement

Effect

on the

income

statement

for the

financial

year and

future

periods

The table

below

provides

information

about

compensation

expenses

related to

total variable compensation, including financial advisor

variable compensation,

that were

recognized in the

financial year

ended 31 December

2021, as well as expenses

that were deferred

and will be

recognized

in the income

statement

for 2022 and

later.

The majority

of expenses

deferred

to 2022

and later

that are

to the

2021

performance

year

pertain

to awards

granted

in February

2022.

The total

unamortized compensation

expense for unvested

based

awards

granted

December

2021

will

recognized

in future periods

over a weighted

average

period of

2.5

years.

Variable compensation including financial advisor variable

compensation

Expenses recognized in 2021

Expenses deferred to 2022 and later

USD million

Related to the

2021

performance

year

Related to prior

performance

years

Total

Related to the

2021

performance

year

Related to prior

performance

years

Total

Non-deferred cash

2,383

(10)

2,373

Deferred compensation awards

405

412

817

797

624

1,421

of which: Equity Ownership Plan

183

180

363

393

184

577

of which: Deferred Contingent Capital Plan

140

158

297

299

329

628

of which: Long-Term Incentive Plan

of which: Asset Management EOP

133

Variable compensation – performance awards

2,788

402

3,190

797

624

1,421

Variable compensation – other

191

229

215

182

397

Total variable compensation excluding financial advisor variable compensation

2,979

440

3,419

1,012

806

1,818

Financial advisor variable compensation

4,134

248

4,382

434

641

1,075

of which: non-deferred cash

3,858

(6)

3,853

of which: deferred share-based awards

106

157

123

146

269

of which: deferred cash-based awards

170

202

372

311

495

806

Compensation commitments with recruited financial advisors

438

479

662

1,682

2,344

Total FA variable compensation

4,175

685

4,860

1,097

2,323

3,419

Total variable compensation including FA variable compensation

7,155

1,125

8,280

2,109

3,129

5,238

1 Estimate as

of 31 December

2021. Actual

amounts to be

expensed in future

periods may vary,

e.g., due

to forfeiture of

awards.

2 Consists of

replacement payments,

forfeiture credits,

severance payments,

retention plan payments and interest

expense related to the Deferred Contingent

Capital Plan.

3 Reflects expenses related to

compensation commitments with financial advisors entered into

at the time of recruitment

that are subject to

vesting requirements. Amounts

reflected as deferred expenses

represent the maximum

deferred exposure as of

the balance sheet date.

Amounts in the “Related

to the 2021 performance

year”

columns represent commitments entered into

in 2021.

4 Includes USD

651

million in expenses related to share-based

compensation (performance awards: USD

435

million; other variable compensation:

USD

million; financial advisor

compensation: USD

157

million). A further

USD

million in expenses

related to share-based

compensation was recognized

within other expense

categories included in

Note 6 (salaries:

USD

million related to role-based allowances; social security: USD

million; other personnel expenses: USD

million related to the Equity Plus Plan). Total personnel expense related to share-based equity-settled

compensation excluding social security was USD

641

million.

Variable compensation including financial advisor variable

compensation (continued)

Expenses recognized in 2020

Expenses deferred to 2021 and later

USD million

Related to the

2020

performance

year

Related to prior

performance

years

Total

Related to the

2020

performance

year

Related to prior

performance

years

Total

Non-deferred cash

2,167

(26)

2,141

Deferred compensation awards

341

727

1,068

756

288

1,044

of which: Equity Ownership Plan

137

327

463

306

376

of which: Deferred Contingent Capital Plan

112

351

463

280

196

476

of which: Long-Term Incentive Plan

of which: Asset Management EOP

120

132

Variable compensation – performance awards

2,508

701

3,209

756

288

1,044

Variable compensation – other

126

220

181

192

374

Total variable compensation excluding financial advisor variable compensation

2,634

795

3,429

938

480

1,418

Financial advisor variable compensation

3,356

233

3,589

350

602

952

of which: non-deferred cash

3,154

of which: deferred share-based awards

119

135

214

of which: deferred cash-based awards

133

183

316

271

467

738

Compensation commitments with recruited financial advisors

480

502

473

1,682

2,155

Total FA variable compensation

3,378

713

4,091

822

2,284

3,106

Total variable compensation including FA variable compensation

6,012

1,508

7,520

1,760

2,764

4,524

1 Estimate as of 31

December 2020. Actual amounts to be

expensed in future periods may vary, e.g., due to forfeiture of

awards.

2 Consists of replacement payments, forfeiture credits, severance payments, retention

plan payments and interest expense related

to the Deferred Contingent Capital Plan.

3 Reflects expenses related to compensation

commitments with financial advisors

entered into at the time of

recruitment that

are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date. Amounts in the “Related to the 2020 performance year” columns

represent commitments entered into

in 2020.

4 Includes USD

686

million in expenses related

to share-based compensation

(performance awards: USD

517

million; other variable compensation:

USD

million;

financial advisor compensation:

USD

119

million). A further

USD

100

million in expenses

related to share-based

compensation was recognized

within other expense

categories included in

Note 6 (salaries:

USD

million related to

role-based allowances;

social security:

USD

million; other

personnel expenses:

USD

million related

to the Equity

Plus Plan).

Total personnel

expense related

to share-based

equity-settled

compensation excluding social security was USD

691

million.

Variable compensation including financial advisor variable

compensation (continued)

Expenses recognized in 2019

Expenses deferred to 2020 and later

USD million

Related to the

2019

performance

year

Related to prior

performance

years

Total

Related to the

2019

performance

year

Related to prior

performance

years

Total

Non-deferred cash

1,894

(26)

1,868

Deferred compensation awards

299

588

887

429

608

1,036

of which: Equity Ownership Plan

122

300

422

205

219

424

of which: Deferred Contingent Capital Plan

113

262

375

173

365

538

of which: Long-Term Incentive Plan

of which: Asset Management EOP

Variable compensation – performance awards

2,193

562

2,755

429

608

1,036

Variable compensation – other

159

246

117

232

349

Total variable compensation excluding financial advisor variable compensation

2,352

650

3,001

545

840

1,385

Financial advisor variable compensation

3,233

268

3,501

197

710

907

of which: non-deferred cash

3,064

of which: deferred share-based awards

106

130

183

of which: deferred cash-based awards

112

219

331

144

580

724

Compensation commitments with recruited financial advisors

510

542

350

1,617

1,967

Total FA variable compensation

3,265

778

4,043

548

2,327

2,874

Total variable compensation including FA variable compensation

5,617

1,428

7,045

1,093

3,166

4,259

1 Estimate as of 31 December 2019. Actual amounts expensed may vary, e.g.,

due to forfeiture of awards.

2 Consists of replacement payments, forfeiture credits, severance payments,

retention plan payments and

interest expense related to the Deferred Contingent Capital Plan.

3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting

requirements. Amounts reflected as deferred expenses represent

the maximum deferred exposure as of

the balance sheet date. Amounts in the

“Related to the 2019 performance year”

columns represent commitments

entered into in

2019.

4 Includes USD

610

million in expenses related

to share-based compensation (performance

awards: USD

461

million; other variable compensation: USD

million; financial advisor compensation:

USD

106

million). A

further USD

million in

expenses related

to share-based

compensation was

recognized within

other expense

categories included

in Note

6 (salaries:

USD

million related

to role-based

allowances; social security:

USD

million; other personnel

expenses: USD

million related to

the Equity Plus

Plan). Total personnel

expense related to

share-based equity-settled compensation

excluding social

security was USD

619

million.

c) Outstanding share-based compensation awards

Share and performance share awards

Movements in outstanding share-based awards during 2021 and 2020 are provided in the table below.

Movements in outstanding share-based compensation

awards

Number of shares

2021

Weighted average

grant date fair value

(USD)

Number of shares

2020

Weighted average

grant date fair value

(USD)

Outstanding, at the beginning of the year

174,900,395

156,064,763

Awarded during the year

68,721,549

72,250,157

Distributed during the year

(52,137,287)

(46,899,362)

Forfeited during the year

(10,906,096)

(6,515,164)

Outstanding, at the end of the year

180,578,561

174,900,395

of which: shares vested for accounting purposes

107,828,979

118,260,527

The total carrying amount of the liability related to cash-settled share-based awards as of 31 December 2021 and 31 December 2020

was USD

million and USD

million, respectively.

d) Valuation

UBS share awards

UBS

measures

compensation

expense

based

the

average

market price

of UBS

shares on

the grant

date as

quoted on

the

SIX

Swiss

Exchange,

taking

into

consideration

post-vesting

sale

and

hedge

restrictions,

non-vesting

conditions

and

market

conditions, where

applicable. The

fair value

of the

share awards

subject to

post-vesting sale

and hedge

restrictions is

discounted

on the basis of

the duration of the

post-vesting restriction and is

referenced to

the cost

of purchasing

an at-the-money

European

put option for the term of the transfer restriction. The grant date

fair

value

notional

without dividend

entitlements also

includes

deduction

for

the

present

value

future

expected

dividends to be paid between the grant date and distribution.

UBS AG

Entity [Table]

Employee benefits: variable compensation [text block]

Note 28

Employee benefits: variable compensation

a) Plans offered

UBS

has

several

share-based

and

other

deferred

compensation

plans

that

align

the

interests

Group

Executive

Board

(GEB)

members and other employees with the interests of investors.

Share-based awards are granted in the form of notional shares

and, where

permitted,

carry a dividend

equivalent

that may be

paid

notional

cash.

Awards

are

settled

delivering

UBS

at vesting,

except

in jurisdictions

where

this

is not

permitted

for legal

or tax

reasons.

Deferred compensation awards are

generally forfeitable upon,

among other circumstances,

voluntary termination

of employment

with UBS. These

compensation plans

are

also designed

meet

regulatory

requirements

and

include

special

provisions

for

regulated employees.

The most significant

deferred compensation

plans are described

below.

For

the

majority

variable

compensation

awards

granted

under such

plans to

employees of

UBS AG,

the grantor

entity is

UBS

Group

AG.

Expenses

associated

with

these

awards

are

charged

by UBS

Group AG

to UBS

AG. For

the purpose

this

Note, references to shares refer to UBS Group AG shares.

›

Refer to Note 1a

item 5 for a description of the accounting

policy

related to share-based and other deferred compensation

plans

Mandatory

deferred

compensation

plans

The Long-Term Incentive Plan

The

Long-Term

Incentive

Plan

(LTIP)

mandatory

deferred

share-based

compensation plan

for senior

leaders of

the Group

(i.e., GEB members and selected senior management).

The number of notional

shares delivered at

vesting depends on

two

equally

weighted

performan

metrics

over

three

year

performance

period:

reported

return

common

equity

tier

capital and relative

total shareholder return,

which measures the

performance

UBS

against

index

Global

Systemically

Important Banks as determined by the Financial Stability Board.

The final number of shares will vest in three

equal installments in

each of the three years

following the performance period for

GEB

members, and cliff

vest in the

first year

following the performance

period for selected senior management.

The Equity

Ownership

Plan

The

Equity

Ownership

Plan

(EOP)

deferred

share-based

compensation

plan

for

employees

who

are

subject

deferral

requirements but

do not

receive LTIP

awards. Vesting

under the

EOP

generally

occurs

equal

installments

two

and

three

years

after

grant,

subject

continued

employment

and,

certain

cases, achievement of defined performance conditions.

Asset Management employees receive some or all of

their EOP

the

form

cash-settled

notional

investment

funds.

The

amount

delivered

depends

the

value

the

underlying

investment funds at the time of vesting.

The Deferred

Contingent

Capital

Plan

The

Deferred

Contingent

Capital

Plan

(DCCP)

deferred

compensation plan for all

employees who are

subject to deferral

requirements.

Such employees

are awarded

notional additional

tier

1 (AT1) capital

instruments,

which, at

the discretion

of UBS, can

settled as a cash

payment or a perpetual, marketable AT1

capital

instrument. DCCP

awards

generally

vest

full

after

five

years,

unless the

award is

written down

following the

occurrence of

viability

event (as

defined under

the terms

of an AT1 instrument)

if the

Group’s CET1 capital

ratio falls below

a defined

threshold.

Additional performance

conditions

apply to GEB

members.

Interest payments

on DCCP awards

are paid at the

discretion of

UBS.

Where interest

payments

are not

permitted,

such

as for

certain

regulated employees,

the DCCP

award reflects

the fair value

of the

granted non-interest-bearing

award.

Financial advisor variable compensation

line

with

market

prac

tice

for

wealth

management

businesses, the compensation for US financial advisors in Global

Wealth Management

predominantly includes

production payout

and

deferred

compensation

awards.

Production

payout

primarily based

on compensable revenue.

Financial advisors

may

also qualify

for deferred

compensation awards,

which generally

vest over

a six-year

period. These

awards are

based on

strategic

performance

measures,

including

production

and

length

service

with

UBS.

Production

payout

rates

and

deferred

compensation awards

may be

reduced for,

among other

things,

errors,

negligence or

carelessness, or

failure to

comply with

the

firm’s

rules,

standards,

practices

and

policies,

and

applicable laws and regulations.

Financial advisor

compensation also

includes expenses

compensation

commitments

with

financial

advisors

entered

into

the

time

recruitment

that

are

subject

vesting

requirements.

b) Effect on the income statement

Effect

on the

income

statement

for the

financial

year and

future

periods

The table

below

provides

information

about

compensation

expenses

related to

total variable compensation, including financial advisor

variable compensation,

that were

recognized in the

financial year

ended 31 December

2021, as well as expenses

that were deferred

and will be

recognized

in the income

statement

for 2022 and

later.

The majority

of expenses

deferred

to 2022

and later

that are

to the

2021

performance

year

pertain

to awards

granted

in February

2022.

The total

unamortized compensation

expense for unvested

based

awards

granted

December

2021

will

recognized

in future periods

over a weighted

average

period of

2.5

years.

Variable compensation including financial advisor variable

compensation

Expenses recognized in 2021

Expenses deferred to 2022 and later

USD million

Related to the

2021

performance

year

Related to prior

performance

years

Total

Related to the

2021

performance

year

Related to prior

performance

years

Total

Non-deferred cash

2,136

(8)

2,128

Deferred compensation awards

389

399

788

767

606

1,373

of which: Equity Ownership Plan

175

174

350

374

180

553

of which: Deferred Contingent Capital Plan

134

151

285

290

318

608

of which: Long-Term Incentive Plan

of which: Asset Management EOP

133

Variable compensation – performance awards

2,525

391

2,916

767

606

1,373

Variable compensation – other

163

196

210

178

388

Total variable compensation excluding financial advisor variable compensation

2,688

424

3,112

978

784

1,762

Financial advisor variable compensation

4,134

248

4,382

434

641

1,075

of which: non-deferred cash

3,858

(6)

3,853

of which: deferred share-based awards

106

157

123

146

269

of which: deferred cash-based awards

170

202

372

311

495

806

Compensation commitments with recruited financial advisors

438

479

662

1,682

2,344

Total FA variable compensation

4,175

685

4,860

1,097

2,323

3,419

Total variable compensation including FA variable compensation

6,863

1,109

7,973

2,074

3,107

5,181

1 Estimate as

of 31 December

2021. Actual

amounts to be

expensed in future

periods may vary,

e.g., due

to forfeiture of

awards.

2 Consists of

replacement payments,

forfeiture credits,

severance payments,

retention plan payments and interest

expense related to the Deferred Contingent

Capital Plan.

3 Reflects expenses related to

compensation commitments with financial advisors entered into

at the time of recruitment

that are subject to

vesting requirements. Amounts

reflected as deferred expenses

represent the maximum

deferred exposure as of

the balance sheet date.

Amounts in the “Related

to the 2021 performance

year”

columns represent commitments entered into

in 2021.

4 Includes USD

631

million in expenses related to share-based

compensation (performance awards: USD

419

million; other variable compensation:

USD

million; financial advisor compensation: USD

157

million). A further USD

million in expenses related to share-based compensation was recognized within other expense categories included in Note 6 (salaries: USD

million related to role-based allowances; social security: USD

million; other personnel expenses: USD

million related to the Equity Plus Plan).

Variable compensation including financial advisor variable

compensation (continued)

Expenses recognized in 2020

Expenses deferred to 2021 and later

USD million

Related to the

2020

performance

year

Related to prior

performance

years

Total

Related to the

2020

performance

year

Related to prior

performance

years

Total

Non-deferred cash

1,948

(29)

1,920

Deferred compensation awards

329

704

1,034

734

277

1,011

of which: Equity Ownership Plan

131

315

446

298

365

of which: Deferred Contingent Capital Plan

108

339

448

271

189

459

of which: Long-Term Incentive Plan

of which: Asset Management EOP

120

132

Variable compensation – performance awards

2,278

675

2,953

734

277

1,011

Variable compensation – other

109

201

176

189

364

Total variable compensation excluding financial advisor variable compensation

2,387

768

3,155

909

465

1,375

Financial advisor variable compensation

3,356

233

3,589

350

602

952

of which: non-deferred cash

3,154

of which: deferred share-based awards

119

135

214

of which: deferred cash-based awards

133

183

316

271

467

738

Compensation commitments with recruited financial advisors

480

502

473

1,682

2,155

Total FA variable compensation

3,378

713

4,091

822

2,284

3,106

Total variable compensation including FA variable compensation

5,765

1,481

7,246

1,732

2,749

4,481

1 Estimate as of 31

December 2020. Actual amounts to be

expensed in future periods may vary, e.g., due to forfeiture of

awards.

2 Consists of replacement payments, forfeiture credits, severance payments, retention

plan payments and interest expense related

to the Deferred Contingent Capital Plan.

3 Reflects expenses related to compensation

commitments with financial advisors entered

into at the time of recruitment

that

are subject to vesting requirements. Amounts reflected as deferred expenses represent the maximum deferred exposure as of the balance sheet date.

Amounts in the “Related to the 2020 performance year” columns

represent commitments entered into

in 2020.

4 Includes USD

666

million in expenses related

to share-based compensation

(performance awards: USD

498

million; other variable compensation:

USD

million;

financial advisor compensation: USD

119

million). A further USD

million in expenses related to share-based compensation was recognized within

other expense categories included in Note 6 (salaries: USD

million

related to role-based allowances; social security: USD

million; other personnel expenses: USD

million related to the Equity Plus Plan).

Variable compensation including financial advisor variable

compensation (continued)

Expenses recognized in 2019

Expenses deferred to 2020 and later

USD million

Related to the

2019

performance

year

Related to prior

performance

years

Total

Related to the

2019

performance

year

Related to prior

performance

years

Total

Non-deferred cash

1,706

(24)

1,682

Deferred compensation awards

287

576

863

413

592

1,005

of which: Equity Ownership Plan

115

294

410

198

213

412

of which: Deferred Contingent Capital Plan

109

256

365

166

356

521

of which: Long-Term Incentive Plan

of which: Asset Management EOP

Variable compensation – performance awards

1,993

553

2,545

413

592

1,005

Variable compensation – other

140

225

115

228

343

Total variable compensation excluding financial advisor variable compensation

2,133

638

2,770

528

820

1,348

Financial advisor variable compensation

3,233

268

3,501

197

710

907

of which: non-deferred cash

3,064

of which: deferred share-based awards

106

130

183

of which: deferred cash-based awards

112

219

331

144

580

724

Compensation commitments with recruited financial advisors

510

542

350

1,617

1,967

Total FA variable compensation

3,265

778

4,043

548

2,327

2,874

Total variable compensation including FA variable compensation

5,398

1,416

6,814

1,076

3,146

4,222

1 Estimate as of 31 December 2019. Actual amounts expensed may vary, e.g.,

due to forfeiture of awards.

2 Consists of replacement payments, forfeiture credits, severance payments,

retention plan payments and

interest expense related to the Deferred Contingent Capital Plan.

3 Reflects expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting

requirements. Amounts reflected as deferred expenses

represent the maximum deferred exposure

as of the balance sheet

date.

Amounts in the “Related to

the 2019 performance year”

columns represent commitments

entered into in

2019.

4 Includes USD

595

million in expenses related

to share-based compensation (performance

awards: USD

448

million; other variable compensation: USD

million; financial advisor compensation:

USD

106

million). A

further USD

million in

expenses related

to share-based

compensation was

recognized within

other expense

categories included

in Note

6 (salaries:

USD

million related

to role-based

allowances; social security: USD

million; other personnel expenses: USD

million related to the Equity Plus Plan).

c) Outstanding share-based compensation awards

Share and performance share awards

Movements in outstanding share-based awards under the EOP during 2021 and 2020 are provided in the table below.

The awards presented are granted by UBS AG, but are based on UBS Group AG shares.

Movements in outstanding share-based compensation

awards

Number of shares

2021

Weighted

average grant

date fair

value (USD)

Number of shares

2020

Weighted

average grant

date fair

value (USD)

Outstanding, at the beginning of the year

54,557

90,443

Awarded during the year

278,756

19,229

Distributed during the year

(24,176)

(55,114)

Forfeited during the year

(13,215)

Outstanding, at the end of the year

295,921

54,557

of which: shares vested for accounting purposes

116,775

53,216

The total carrying amount of the liability related to cash-settled share-based awards as of 31 December 2021 and 31 December 2020

was USD

million and USD

million, respectively.

d) Valuation

UBS share awards

UBS

measures

compensation

expense

based

the

average

market price

of UBS

shares on

the grant

date as

quoted on

the

SIX

Swiss

Exchange,

taking

into

consideration

post-vesting

sale

and

hedge

restrictions,

non-vesting

conditions

and

market

conditions, where

applicable. The

fair value

of the

share awards

subject to

post-vesting sale

and hedge

restrictions is

discounted

on the basis of

the duration of the

post-vesting restriction and is

referenced to

the cost

of purchasing

an at-the-money

European

put option for the term of the transfer restriction. The grant date

fair

value

notional

without dividend

entitlements also

includes

deduction

for

the

present

value

future

expected

dividends to be paid between the grant date and distribution.