UniCredit to reassess CEO pay ahead of general meeting
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 [December 03, 2022] By
Valentina Za
MILAN (Reuters) - UniCredit will reassess the remuneration of CEO Andrea
Orcel ahead of its 2023 general meeting to see if the results achieved
by Italy's second-biggest bank in 2021-2022 warrant an increase, a
document on its website showed.
UniCredit Chairman Pier Carlo Padoan said in an emailed comment late on
Friday that the bank's remuneration committee would make a
recommendation to the board on the CEO's pay "incorporating views of
investors and wider stakeholders," adding the CEO himself had not asked
for a raise.
UniCredit's latest remuneration report noted that the CEO's current pay
structure and a regulatory ceiling - that caps variable pay at twice the
fixed amount - prevented the bank from rewarding over-performance when
targets were exceeded.
"The board examined Orcel's pay package in light of the important
performance reached in 2021 under his leadership," the report said. "Orcel
separately indicated ... he prefers to keep his fixed pay unchanged and
have his variable pay closely linked to performance goals," it added.
"The board agrees ... and will reassess Orcel's pay ahead of the 2023
general shareholder meeting in light of results and progress made in
2021 and 2022," it concluded.
The former head of investment banking at UBS arrived at UniCredit in
April 2021, vowing to reverse a phase of "active retrenchment" under the
risk-averse previous CEO Jean Pierre Mustier.
Orcel is turning the bank around from a commercial point of view, but he
has so far failed, like his predecessor, to strike a merger and
acquisition deal.
[to top of second column] |
Andrea Orcel poses with IFR's 'Bank of
the Year for 2015' award at the 2016 IFR Awards event in London,
Britain in this handout photograph shot January 27, 2016 and
provided to Reuters January 22, 2020. IFR/Simon Wagner/Handout via
REUTERS
After dropping the proposed takeover of smaller rival Monte dei
Paschi, Orcel pledged to return more than 16 billion euros in
dividends and buybacks to investors by 2024. He maintained the bank
could hit the distribution goal even in a severe recession after the
Ukraine war and energy crisis prompted banking supervisors to call
for caution.
On his arrival at UniCredit, Orcel narrowly dodged a shareholder
revolt over his pay, which is double that of Mustier, with leading
investor advisory firms again raising concerns over his salary in
March.
Orcel's distribution promise lifted UniCredit shares to a four-year
high of 15.7 euros before the war, from 8.5 euros just before he
took over, giving the CEO ammunition for potential M&A deals paid
for in shares.
But the bank's large exposure to Russia, a business Orcel has so far
held on to, has seen its shares ease again, to close on Friday at
12.5 euros.
The Financial Times first reported UniCredit sought a pay hike for
Orcel citing people familiar with the matter.
(Reporting by Valentina Za; Editing by Kirsten Donovan)
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