UniCredit board approves Andrea Orcel as CEO and his controversial remuneration

Only 54% of shareholders approve of the banker’s salary, who will receive up to 7.5 million as the bank’s chief executive.

The Italian Banker Andrea Orcel has received broad support for his appointment as CEO of UniCredit by the shareholders present at the meeting held today by the entity, although this support has been substantially reduced to 54% in terms of the remuneration of up to 7.5 million that he will receive as the bank’s chief executive.

Specifically, Orcel’s fixed salary will be 2.5 million euros per year and he may receive double that amount in shares, raising his total remuneration to 7.5 million euros per year.

The general meeting of shareholders has supported with 99.06% of the votes present the proposal to set the number of members of the bank’s board of directors at thirteen for the period between 2021 and 2023, among which the list of executives with Pietro Carlo Padoan, who will exercise the presidency, and Andrea Orcel, as CEO, had 76.31% of the votes in favor.

However, this support has been reduced to 54.1% of the votes present in the point referring to the 2021 remuneration policy, with 42.66% of the votes present against the proposal presented, which involves raising up to a maximum of 7.5 million euros Orcel’s remuneration, including 2.5 million fixed salary, practically double that of his predecessor, Jean Pierre Mustier.

Likewise, Orcel’s annual remuneration in his first year at the helm of UniCredit could be increased by another 5 million euros through bonuses not linked to the performance of the entity.

One proxy recommended voting against

In this sense, the proxy advisor Glass Lewis had issued a recommendation addressed to UniCredit shareholders to vote against Andrea Orcel’s remuneration package as CEO of the bank because it was not tied to his performance as an executive.

The banker has grateful for the trust placed in him by the managing director and shareholders of the entity, underlining that UniCredit is a bank of “critical” importance and a “truly pan-European” institution, with its origins firmly rooted in Italy.

“I see in UniCredit the opportunity to make a difference. An opportunity to do things differently and to create a plan for what banking can be like, done the right way, for the right reasons. This is an opportunity that I do not intend to miss, but rather to capitalize on for the good of all our stakeholders ”, he stated.

Orcel, former director of the investment bank of UBS, has a close relationship with UniCredit, since he took part in the merger process between Credito Italiano and UniCredito that in 1998 gave rise to the group, which followed as a client of UBS when in 2012 Orcel changed Merrill Lynch for the Swiss entity.

On the other hand, the Italian banker maintains a legal battle against Santander, which he claims 112 million euros, after the Spanish bank withdrew its offer to make him CEO of the entity. The trial is scheduled for May 19 after being postponed twice.