UniCredit Halves Bonus Pool After ECB Pushes for Moderation

UniCredit SpA said it has cut the 2020 bonus pool for top managers by almost half, complying with a request from regulators to exercise “extreme” moderation on compensation in the wake of the pandemic.

The bonus amount for 1,063 top executives included in the so-called “material risk takers” group was reduced to 65 million euros ($77 million) from 122 million euros a year earlier, according to a statement on the bank’s website. Senior executives will see a steeper reduction, UniCredit said.

UniCredit’s announcement reinforces the trend across the region for below-par payouts for bankers, after a turbulent year defined by the coronavirus pandemic. Deutsche Bank AG was forced to scale back plans for its bonus pool after the European Central Bank objected to the level of rewards.

The bank also said incoming Chief Executive Officer Andrea Orcel will receive the maximum bonus stipulated in his contract for 2021, without the payout being linked to performance. From 2022, Orcel will receive a mix of performance based and fixed compensation. The lender confirmed Orcel won’t receive any payments to make up for lost deferred bonuses worth tens of millions of dollars as a result of leaving his former employer, UBS AG.

Salary Waived

UniCredit appointed Orcel in January to replace Jean Pierre Mustier, who stepped down amid clashes with board members over strategy. The 57-year-old Rome native will take the helm on April 15, more than two years after having left UBS Group AG over a move to Banco Santander SA that was scuppered by a disagreement over pay.

Orcel will receive a share-based bonus in 2021, the bank said. UniCredit hasn’t disclosed details on Orcel’s fixed compensation. It has a policy to pay its CEO bonuses of up to 200% of fixed salary.

UniCredit said the top seven senior managers reporting to the CEO decided to voluntarily forgo their bonus for 2020, following Mustier who also waived 25% of his 2020 salary.

Societe Generale SA is set to cut bonuses at its investment bank by about 20% after trading hits suffered during the market turbulence in 2020. Credit Suisse AG, suffering legal charges, shrank its overall bonus pool by 7% while awarding traders more. UBS AG investment banking staff saw a 20% increase after they managed to capitalize on market swings.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.