Unicredit, all about the Orcel-Gadhia case
Why did councilor Gadhia resign from the Unicredit board of directors? Was it torpedoed? The facts, the rumors of the Financial Times and the official version. The article by Emanuela Rossi
Unicredit's accounts are going well , there's no denying it, with the best profit out of ten to date (to 5.2 billion in 2022) and therefore the salary of CEO Andrea Orcel could also increase this year by a percentage including between 20 and 40. The indiscretion, released by Il Sole 24 Ore , could become reality following the approval of the shareholders' meeting, scheduled for 31 March next: the Roman banker's remuneration would therefore rise from the current 7.5 million at about 9-10.5 million. After all, even the shareholders have reason to thank Orcel who intends to pay dividends of 16 billion by 2024, of which 5.25 billion in 2023.
To disturb the waters, however, came the resignation – from the board of directors of the group – of the British Jayne-Anne Gadhia, last 10 February. Let's see why.
WHO IS JAYNE-ANNE GADHIA
Born in 1961 in Stourbridge, England, Gadhia is the founder and executive director of start-up Snoop.
He began his career at Ernst & Young and then spent six years at Norwich Union, now Aviva. In 1995 she was one of the founders of Virgin Direct and three years later she joined Virgin One which was then bought by the Royal Bank of Scotland in 2001. She then spent five years at RBS before returning to Virgin as CEO of Virgin Money (2007-2018).
From 2016 to 2021 Gadhia collaborated with the British government and in 2021 joined the board of Unicredit. She is currently a Trustee of the Tate, a group of four art galleries in her country, and sits on the Mayor of London's Business Advisory Board, Financial Inclusion Policy Forum and Lloyds Cultural Advisory Group.
Gadhia has many accolades: in 2018 she was chosen Leader of the Year at the Lloyds Bank National Business Awards and was elected a Fellow of the Royal Society of Edinburgh. Furthermore, in 2014 she was appointed Commander of the Order of the British Empire (CBE) and in 2019 Dame Commander of the Order of the British Empire. Most recently, last year, she became a Commander of the Royal Victorian Order (CVO) for services to the Prince's Foundation, founded in 1986 by then Prince Charles, now King Charles III.
WHAT HAPPENED AT UNICREDIT OF ORCEL IN GHADIA
According to what the Financial Times reveals, Gadhia would have decided to leave the board of Unicredit after being accused of revealing confidential information to the press.
An internal audit would have followed, to identify the source of some news that appeared in the newspapers, and Gadhia would have been heard by the president of the group, Pier Carlo Padoan, and by the head of the lawyer, Gianpaolo Alessandro. The charges would later be dropped but for the councilor it would have been "unsustainable" to remain on the board in Piazza Gae Aulenti. Therefore, he would have opted for his resignation while maintaining the position of senior advisor.
But what does his farewell from Unicredit have to do with Orcel's salary? Simple: as chairman of the nomination committee, Gadhia's duties also included supervising top management compensation and seeking investor support. The British newspaper also reports a comment from Unicredit: “The board was worried by a series of 'leaks' which were damaging both the bank and the hard work of its employees. As per best practice, the board conducted a thorough internal audit” which was later found to be “inconclusive but the board is very clear about its fiduciary duties and obligations. It has taken clear actions and further strengthened its already robust policies to ensure the proper handling of confidential information in order to maintain the highest standards of corporate governance in the bank."
THE UNICREDIT RELEASE
The Italian group recalled to the Financial Times that in truth "the reasons" for Gadhia's resignation were "clearly set out" in the note released in conjunction with her release, on February 10, and are "consistent with her letter of resignation at the bank". The press release highlighted that the reasons were "linked to the assumption of a new position (the presidency of Moneyfarm, ed .) and the consequent greater commitment" that would have been required of her. Padoan, also on behalf of the board, Orcel and the Board of Statutory Auditors wished her "good work" and thanked her "for the contribution made to the Board of Directors, the Remuneration Committee of which she was Chairman and the Corporate Governance & Nomination Committee of which she was a member". Six days later Unicredit announced the appointment of independent director Jeffrey Alan Hedberg as Chairman of the Remuneration Committee.
THE POSSIBLE INTERVENTION OF THE ECB
However, the story may not have ended there. According to the economic newspaper, in fact, at this point the European Central Bank could come into play: it is probable, he writes, that Frankfurt will decide to call Gadhia to report. This is a common practice when a board member resigns and allows the ECB to gather information for the overall supervision of a banking group. All the more reason it could happen this time, with the British councilor who left before the end of the mandate. At the moment the Eurotower has not provided any comment on the matter.
THE NUMBERS OF UNICREDIT
Meanwhile, Unicredit is set to increase the overall bonus for 2022 by around 20% for non-executive employees and 900 top managers, after a year in which the Italian lender beat profit expectations and boosted returns for shareholders. It would be a great reward for those who work at Gae Aulenti after a year in which the bank made profits of 5.2 billion, a 2% cost cut and increased shareholder remuneration by 40%. Yesterday the stock closed with +4.6% at over 19 euros, among the highs of the month of February, dragging all bank stocks upwards. The capitalization has reached 37 billion.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/gadhia-unicredit-orcel/ on Tue, 28 Feb 2023 06:37:28 +0000.