© Reuters. FILE PHOTO: Italian banker Andrea Orcel attends a trial in opposition to Santander over the financial institution’s withdrawal of a CEO job supply to him, in a excessive courtroom in Madrid, Spain, Might 19, 2021. REUTERS/Juan Medina/File Picture
By Valentina Za
MILAN (Reuters) -Main investor advisory corporations have once more raised considerations over the wage of UniCredit CEO Andrea Orcel, with one recommending for a second straight 12 months shareholders vote in opposition to his pay.
Orcel, former head of funding banking at Swiss financial institution UBS, narrowly dodged an investor revolt final 12 months over the remuneration package deal that made him certainly one of Europe’s greatest paid financial institution CEOs when he took the reins at UniCredit in April.
Main proxy advisers Institutional Shareholder Providers (ISS) and Glass Lewis once more took goal at his compensation forward of an annual common assembly on April 8, however ISS stopped in need of calling for traders to reject the financial institution’s pay coverage.
Orcel obtained 6.7 million euros ($7.4 million) from UniCredit in 2021, together with 4.8 million euros in shares as a sign-on bonus unrelated to efficiency.
The banker, certainly one of Europe’s greatest identified and highest paid dealmakers, had forfeited hundreds of thousands in deferred pay from UBS in becoming a member of.
His variable pay, equal to as much as twice the two.5 million euro mounted annual pay, is from 2022 linked to targets set underneath the ‘UniCredit Unlocked’ plan Orcel unveiled in December.
Whereas acknowledging the “considerably improved framework” for Orcel’s remuneration, ISS mentioned the package deal remained “regarding and of specific concern is the excessive cap to severance funds (15 million euros or six instances the mounted pay).”
Glass Lewis went additional, saying it didn’t imagine “the corporate’s remuneration technique, as at present constituted, is sufficiently aligned with shareholders’ greatest pursuits.”
“As such, we don’t imagine that this proposal deserves shareholder help”, it added in a report seen by Reuters.
Addressing Glass Lewis’ criticism in a letter to shareholders, UniCredit mentioned it was “stunned and disillusioned” by the agency’s stance.
Orcel’s pay package deal handed with simply 54% of votes final 12 months and was rejected by BlackRock (NYSE:), UniCredit’s main investor and the world’s largest asset supervisor.
Orcel’s pay is double that of earlier CEO Jean Pierre Mustier, who had waived his severance cost on his arrival and voluntarily taken a 40% wage minimize as he ready to axe hundreds of jobs.
UniCredit informed shareholders within the letter the CEO remuneration was broadly consistent with that of its predominant competitor Intesa Sanpaolo (OTC:) whereas Mustier’s self-imposed pay minimize was not related, reflecting his “private issues on the time.”
Glass Lewis additionally mentioned it was fearful UniCredit had not paid adequate heed to the dissent shareholders expressed final 12 months.
“Whereas the corporate indicated that it engaged with shareholders, we’re involved that it didn’t particularly tackle the outcomes of the 2021 annual common assembly,” it mentioned.
UniCredit mentioned in its letter it had reached out to 55% of its traders.
“Now we have utterly overhauled our remuneration strategy in the course of the 12 months, incorporating all of the output from the broad engagement spherical,” it mentioned.
Along with linking Orcel’s variable pay to efficiency and absolutely disclosing the related mechanisms, UniCredit mentioned it had subjected it to claw-back clauses.
Orcel’s pay can be on the coronary heart of a courtroom case pitting the banker in opposition to Spanish big Santander (MC:). In December a Madrid courtroom ordered Santander to pay 51.4 million euros for dropping a proposal to make him CEO, a ruling which the financial institution has appealed. ($1 = 0.9114 euros)