Andrea Orcel Sues Santander for $113 Million After Withdrawal of CEO Job Offer
(Bloomberg) -- Ex-UBS Group AG investment banking head Andrea Orcel is suing Banco Santander SA for about 100 million euros ($113 million) after the Spanish bank reneged on an agreement to hire him as chief executive officer, according to a person familiar with the matter.
Orcel has filed a suit for fulfillment of contract, the person said, asking not to be named because the matter is private. The amount is about double what Santander had balked at paying the executive to compensate him for unpaid bonuses from UBS in the surprise decision to row back on its offer to hire him. A Santander spokesman declined to comment.
The executive must wait for seven years before joining a rival after resigning if he wants to collect his full deferred pay from UBS, which could amount to as much as 50 million euros, people with knowledge of the matter have said. Santander’s board had wagered that once Orcel was gone, UBS would soften its stance on the bonuses rather than risk losing it as a client. That backfired, leaving them with the prospect of spending a lot more money to compensate him than they had planned.
Orcel had already made commitments in the Spanish capital in preparation of the move, according to recent media comments. He was days away from making the down-payment on a house in Madrid and his daughter had already been accepted into her new school in the Spanish capital, he told the Financial Times in a recent interview. Orcel hired Spanish law firm De Carlos Remon to study his legal options after Santander reversed course.
An external spokeswoman for De Carlos Remon declined to comment.
Orcel is considering starting a boutique investment bank. While a decision isn’t imminent, he has held informal talks with small investment banks and large rivals to UBS on both sides of the Atlantic, as well as Silicon Valley technology firms, the people said.
Santander’s handling of the botched hiring has been criticized by some investors. ISS Governance, a proxy adviser for institutional shareholders, said in April that it had damaged the bank’s reputation and questioned board actions, especially those of Vice Chairman Bruce Carnegie-Brown who heads up the appointments and remunerations committees.
Santander said that the decision to rescind the offer to Orcel was in fact a sign of the bank’s strong corporate governance.
The legal claim was reported earlier by El Confidencial, a news website.
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