Andrea Orcel May Have to Wait Years for His €68 Million From Santander
Andrea Orcel May Have to Wait Years for His €68 Million From Santander
(Bloomberg) -- Despite having chalked up his first major victory against Banco Santander SA in the legal fight over 68 million euros in lost pay ($77 million), Italian banker Andrea Orcel may have a bit of a wait until he gets his money.
The Spanish bank has 20 days to appeal a ruling by a Madrid civil court from last week that it owes the executive compensation for withdrawing an offer to become its chief executive officer in 2019. The bank has said it intends to take that step, pushing a decision months down the line while a higher court considers the case. Then, either party could appeal to the Spanish supreme court. A final ruling could be years away.
The case was heard at a single-judge civil court in Madrid that applies commercial, rather than labor, law as is the practice with CEO contracts in Spain. After several delays, Santander chairman Ana Botin testified during the first day of hearing in May, encountering Orcel in person as he decided to show up in the court, something he wasn’t obliged to do.
A spokeswoman for Orcel declined to comment on the case.
The initial victory has bolstered Orcel, who in his new role as chief executive officer of UniCredit SpA scored his first major win just days earlier when investors enthusiastically backed his strategy revamp. The former UBS Group AG investment banking chief has had a tumultuous few months in charge of Italy’s second-largest bank, including the collapsed deal to take over Banca Monte dei Paschi di Siena SpA.
Botin had argued that Orcel’s appointment never took effect and the contract the bank had offered to him was never fulfilled. The judge last week ruled that the offer was indeed a valid contract and as such the bank broke it when it decided not to go ahead with the appointment in Jan. 2019.
UBS was also dragged into the case as Chairman Axel Weber gave testimony as a witness for Orcel in the last hearing day in November. Orcel walked away from an initial $50 million in deferred pay when he attempted to join Santander.
That payment was at the center of the dispute between Botin and Orcel as the Spanish bank has said Orcel wouldn’t allow that bonus payments agreed to by UBS should go toward making it cheaper to hire him. He alleges it cost him millions of dollars consisting of deferred compensation UBS, as well as a foregone buyout payment plus years of prospective salary at Santander.
©2021 Bloomberg L.P.