Monday, January 17

Banco Santander must compensate the banker Andrea Orcel with 68 million for his frustrated signing

The court of First Instance number 46 of Madrid has condemned Banco Santander to compensate the Italian banker Andrea Orcel with 68 million euros for his frustrated signing as CEO of the Spanish entity in 2019, as legal sources have informed Efe.

In the sentence, advanced by Vozpópuli, the magistrate attends the demand of Orcel, who shortly before the trial decided to lower the initial amount requested, 112 million euros, as well as renounce his main claim, to be named “number two” of the bank. The Italian, now CEO of Unicredit, accused Santander of breaching a contract that the entity, however, did not recognize as it was conditioned to various requirements that were subsequently not met.

To understand the case, we must go back to 2018. The bank announced the signing of Andrea Orcel, from UBS, as its new CEO. The Italian executive was going to be the ‘number two’ of Ana Botín and was going to replace José Antonio Álvarez, who to this day continues as CEO of the entity, who would go on to preside over the Spanish subsidiary after the announced departure of Rodrigo Echenique . The entity even released photographs of the three executives to announce the signing.

A few months later, the bank decides to announce that it is suspending the hiring of Orcel, who had had to leave UBS to assume his responsibility at Banco Santander, given the “unacceptable cost of hiring”. At that time, the Bloomberg agency estimated the operation at about 52 million euros. “It has now become clear that the cost to Santander of compensating him for his deferred remuneration and other benefits would be a sum significantly higher than that initially planned,” the entity reported.

With this frustrated signing, Orcel decided to take legal action against the entity, from whom he was claiming compensation and being recognized as the bank’s CEO. Finally he reduced his claims and this year he took over the reins of Unicredit, one of the largest Italian financial institutions.

According to Vozpopuli, the bank will have to pay the banker 17 million for the incorporation bonus, 35 million for long-term incentives, 5.8 million for two Orcel annuities and, finally, 10 million for compensation for moral and reputational damages.

The bank has shown its “total disagreement” with the ruling that obliges it to compensate the Italian banker. Sources of the entity assure that the council “trusts in winning the resource that will appear before the Provincial Court”. The group recalls that there have already been two criminal complaints filed for this matter and they were won by Santander. Recently the Provincial Court inadmitted and definitively filed these complaints because “there is no place” for the criminal procedure that the banker tried to open.