(Bloomberg) -- Andrea Orcel is set to step away from tens of million of dollars in deferred pay once he realizes his ambition of becoming the chief executive officer of a top European bank.
UniCredit SpA will not compensate the former UBS Group AG star executive for deferred payments he will lose for joining a peer within seven years of leaving the Swiss bank in 2018, people with knowledge of the matter said. UniCredit will pay Orcel fixed and variable salary in line with market standards, starting from April 15 they said, asking to not be named because the contract is private.
The Italian-born banker was set to receive as much as $50 million from UBS provided he stayed away from a competitor. Over the past two and a half years, payouts have lowered the outstanding total to around $30 million, according to one of the people. UBS Chairman Axel Weber said in a Bloomberg TV interview on Thursday that his firm will show no flexibility on Orcel's deferred pay, saying the policy is “leave, lose.”
Orcel had attempted to join Spain's Banco Santander SA as chief executive officer the same year he left the Swiss lender. But the Spanish bank backed out of hiring him, prompting the banker to sue Santander for about 100 million euros to recoup some of the damages. The lawsuit is still pending as an avenue to regain some of the cash.
Santander's Jose Antonio Alvarez, whom Orcel was set to replace as CEO, earned 8.3 million euros in 2019, down from 9 million euros in 2018. Chairman Ana Botin earned 10 million euros, compared to 11 million euros in 2018.
Orcel's predecessor at UniCredit, Jean Pierre Mustier, has been one of the lower paid CEOs among the largest European banks. When he was hired in 2016, he agreed on a fixed annual remuneration of 1.2 million euros and a variable compensation that in 2019 amounted to 2.4 million euros. Last year after pandemic spread in the country, Mustier lowered his 2020 salary by 25%, or about 300,000 euros, after having already renounced his bonus to make a donation to the UniCredit Foundation.
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