Banco Santander must compensate the CEO of UniCredit, Andrea Orcel, with 68 million for having withdrawn the offer that would have made him CEO of the Spanish institute. International press agencies report it. According to the Madrid court that dealt with the case, in fact, the offer presented by Santander must be considered a valid contract, which the institute did not respect by deciding not to continue with the appointment of Orcel. The compensation would cover the signing bonus, the buyout clause, two years’ salary and moral damages. Orcel had asked for $ 76 million in compensation, claiming he also lost millions of dollars in deferred compensation from UBS, his previous employer.
Judge Javier Sanchez Beltran therefore declared the contract of 24 September 2018 between Santander and Andrea Orcel valid, condemning the Iberian institution to pay compensation to the current CEO of UniCredit for having infringed it by deciding not to continue with the appointment of the banker to CEO.
The judge set the amount by recognizing Orcel 17 million as a signing bonus, 35 million to cover long-term incentives, 5.8 million for two years of the target remuneration and 10 million for moral and reputational damages. According to the judge, Santander’s breach of the contract was “unilateral and unjustified”. The Iberian institute now has 20 days to lodge an appeal.
The complaint
The quarrel between the banker and Santander started in the summer of 2019 when Orcel sued the bank: he said he would have backtracked in his hiring as CEO, thus leading him to leave the position in Ubs where he held the role of top investment banker. The story takes shape around a four-page document in which the economic conditions of Orcel’s treatment were written. Instead, according to Santander’s chief Ana Botin, the board of the Spanish bank has never given the green light to hiring.
For Botin, “the contract was never implemented.” In reconstructing the manager, the Italian banker would have made himself available to make the “best efforts” aimed at reducing the economic weight of his appointment in the Spanish bank. Santander in fact expected the Swiss UBS to pay at least half of the € 35 million of deferred compensation that the executive expected to receive. “I personally and the board of directors were thrilled that Orcel was joining the bank,” Botin said. In his opinion, “the best” negotiator. “The board of directors did not approve the contract, and above all it did not approve the compensation amount for leaving UBS,” Botin said.
Unicredit
Certainly, Orcel’s salary continues to be discussed. Suffice it to say that last spring, Unicredit’s remuneration policy passed on the wire – with 54.10% of the share capital present and entitled to vote (votes against 42.66%) – with the maxi-remuneration of 7.5 million euros in favor of Orcel for the first year, despite the contrary opinion of the proxy advisors. The proxy advisors Glass Lewis and ISS had suggested to institutional funds to vote “no” for the de facto transformation of the “variable” part of the salary into “fixed” (and in which case the criteria in force in 2020 would have remained lower pay for Orcel).