Here’s how much Orcel will earn in Unicredit
All the details on the remuneration of Andrea Orcel, the new CEO of Unicredit. The article by Emanuela Rossi
He will take over the leadership of Unicredit on April 15 but there is already a lot of talk about the 57-year-old Roman Andrea Orcel, former Merrill Lynch and former president of Ubs, called to replace Jean Pierre Mustier. Not only the possible policy choices, strategies and objectives in the banking risk still underway, but also his salary, up to 7.5 million a year, take the lead. Figures that will most likely lead him, even if the 2020 remunerations of top credit managers are not yet known, to become the Scrooge among Italian bankers. And to get closer to those 10 million that he only foretold: Banco Santander promised them to him in 2018 as compensation for taking over the leadership but then nothing more was done.
ORCEL'S SALARY IN DETAIL
Among the various documents prepared for the group's shareholders' meeting, scheduled for next April 15, and published on the website www.unicreditgroup.eu, there are some dedicated to the remuneration policy . In particular, thanks to the 2021 Remuneration Report, we learn that the next CEO will receive up to 7.5 million a year between 2.5 million in fixed remuneration and 5 million in variable remuneration which in the first year are however guaranteed.
We then go into detail and analyze the composition of the variable part and we read that “in order to favor the alignment of interests between the CEO appointed and the shareholders, already in the first year in the role, the board of directors approved an award in shares, which represents the entire variable remuneration for 2021, payable in two installments, not subject to performance conditions, malus or claw- back, despite being subject to minimum prudential requirements at the time of payment, thus allowing it to comply with the group's guidelines for share ownership ".
It is then specified that "the proposed remuneration structure for 2021 is closely linked to the first year of the mandate" while from 2022 to Orcel "a mix of long and short term remuneration based on performance will be applied". No remuneration is envisaged to compensate the new boss “for any reduction or cancellation of remuneration deriving from previous employment”. Another novelty for the severance pay that the shareholders' meeting will propose to raise from the current 7.2 million to a maximum of 15 million “in consideration of the new competitive positioning”.
The chairman of the Remuneration Committee and UniCredit vice-president, Lamberto Andreotti, highlighted that both Orcel and the list of candidates for the board will have the "goal of fostering UniCredit's long-term success and strengthening the areas in which we can grow further, leveraging the strengths of our group and the results already achieved over the years ". Andreotti then underlined that the remuneration policies of piazza Gae Aulenti “continue to be an integral part of the group's strategy. The practices, plans and remuneration programs are designed to adequately incentivize, in line with market practices, the achievement of strategic and operational objectives, while at the same time ensuring adequate risk management in compliance with national and international regulatory requirements ".
HOW MUCH THE PREDECESSOR MUSTIER EARNED
Orcel takes over from Jean Pierre Mustier who resigned last February and who led Unicredit for over four years. According to what La Repubblica recalls, the French banker joined the group with a salary consisting of a fixed part of 1.2 million and a variable part which in 2019 was 2.4 million. In 2020 Mustier decreased the fixed salary by 25% and donated the entire variable to the Unicredit Foundation. The 2021 remuneration document shows that last year the "bonus pool" – reserved for 1,063 "group manager risk takers" or employees belonging to relevant personnel – fell 65 million (-47%) mainly thanks to the waiver of the part variable salary by the former CEO and the seven top managers reporting to the head of the company.
HOW MUCH ORCEL EARNS COMPARED TO OTHER EUROPEAN BANKERS
La Repubblica and Il Corriere della Sera took care of the accounts in Orcel's pocket, even in comparison with other colleagues of the same level. Both remember that more than the Roman manager, who in the years of Merrill Lynch and Ubs had the nickname "Ronaldo of the bankers", in the last two years he has only earned his friend Sergio Ermotti, whom he called Orcel in Ubs, of which he was CEO until October 2020: last year Ermotti received 12 million, between 2.2 million fixed plus the variable part.
At Orcel's level is José Antonio Alvarez, vice president and CEO of Santander from whom he received 6.01 million last year and just over 8 million in 2019. More or less at the same level is the German banker Christian Sewing, head of Deutsche Bank, which took 6.04 million in 2019, and just below the CEO of Intesa Sanpaolo, Carlo Messina, who in 2019 earned 5, 2 million (between fixed and variable) and of which the salary for 2020 will be known shortly. On this, La Repubblica informs, “a significant filing of the variable remuneration” should be applied. The same thing, however, could happen to several other bankers, "if only to align them with the shareholders, who for a year have been dry-mouthed, or nearly so, because of the ECB's veto to distribute dividends, and hoard profits in view of the losses on credits. Losses that after the pandemic Frankfurt vigilance estimates up to 1,000 billion euros on the continent ”.
BECAUSE THE OLD BETTER ON HIM
Salary aside, Orcel is being talked about in recent weeks also to hypothesize which will be the first dossiers he will deal with.
The merger issue is certainly holding its own, which, if Banco Bpm goes to a wedding with Bper , should lead to a Milan-Siena axis. In other words, a merger with Montepaschi which, however, does not thrill Leonardo Del Vecchio, who – according to Il Sole 24 Ore – is a sponsor of Orcel. And it is not certain that the arrival of the Roman banker does not make Unicredit return to Piazzetta Cuccia two years after leaving Mediobanca. In fact, now Piazza Gae Aulenti "is ready to change the page with the arrival at the helm of the banker Andrea Orcel who is responsible for choosing the best option in terms of development and aggregation" and then "Mediobanca's assets are rapidly changing around to the increasingly influential position of Leonardo Del Vecchio's Delfin, at 13% but projected at 20%, plus the newcomer Francesco Gaetano Caltagirone and the Benettons. The link between Unicredit and Mediobanca is the role of the founder of Luxottica on both fronts ”.
It should be remembered that Del Vecchio is a shareholder of Unicredit with 1.9%, is the majority shareholder of Mediobanca and has 5% in Generali. "In one of his very first public outings after the blitz in the capital of piazzetta Cuccia – recalls the Confindustria newspaper – he made it clear that he supported a new industrial plan that does not base Mediobanca's results only on Generali and Compass, but projects a future from investment bank ". In short, enough with the current Mediobanca system “perhaps to the advantage of combinations capable of enhancing its core business”.
That being the case, the return of Unicredit to Piazzetta Cuccia does not seem so unlikely. It also seems that the project is being discussed in a recent confidential dossier circulating in the financial circles.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-quanto-guadagnera-orcel-in-unicredit/ on Sun, 28 Mar 2021 14:17:14 +0000.