UniCredit CEO Stakes Future on Strategy With Zero Severance Pay

(Bloomberg) -- UniCredit SpA Chief Executive Officer Jean Pierre Mustier said he’s staking his future on the bank’s new plan to revive profitability. He means it literally.

The Frenchman who took over in July will receive no bonus this year and won’t get a severance payment if he leaves the bank, UniCredit said in a presentation of the plan in London on Tuesday. Mustier will also see his fixed salary cut by 40 percent to 1.2 million euros ($1.27 million) and will invest 2 million euros in the bank’s shares.

“Some of you might know that once upon a time I was a French paratrooper,” Mustier told investors Tuesday. “So I’m kind of hot on execution and discipline and I am staking my and my team’s future on making sure this plan is well executed and successful.”

Mustier’s zero-severance contrasts with bonus packages received by other ex-chiefs of the bank. Predecessor Federico Ghizzoni, who was replaced by Mustier following a slide in the share price and profitability, received a severance payment of about 5 million euros, according to the company. Alessandro Profumo, who had the job before Ghizzoni, received about 38 million euros, the most it ever paid to a single person, according to a company document.

Italy’s biggest bank aims to raise 13 billion euros in a rights offer, betting that a balance-sheet cleanup and cost cuts will win over investors in the absence of strong revenue growth. The company plans to shed an additional 6,500 jobs, bringing the total to 14,000, as it aims for 1.7 billion euros of annual cost savings.

“Rest assured the management team of the bank will have strongly aligned interests with shareholders over a long-term incentive plan dovetailing the plan targets,” Mustier said. “We have developed a plan based on conservative assumptions that is pragmatic with tangible and achievable targets and which depends mostly on cost and risk management, levers which are firmly under our control.”

Mustier, 55, worked for 22 years at Societe Generale SA before coming to UniCredit and running its corporate and investment bank from 2011 to 2015. The first non-Italian in the top job at the bank, he rejoined UniCredit from Tikehau Capital, an investment management company.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net, Ross Larsen in London at rlarsen2@bloomberg.net. To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net, Cindy Roberts, Jon Menon