The Madrid Court sentenced Banco Santander to compensate Andrea Orcel 67.8 million euros, following the withdrawal of the offer made three years ago to appoint him as CEO of the institute. The Court regarded the offer letter as a binding contract. Orcel, current CEO of Unicredit, was at the time the head of UBS investment banking, from which he had lost the deferred bonuses for around 35 million euros by leaving; Orcel’s appointment had not been confirmed by the Santander board of directors, which had not approved the payment of compensation for lost bonuses.
The sentence
Judge Javier Sanchez Beltran declared the contract of 24 September 2018 between Santander and Andrea Orcel valid. The amount recognized to Orcel of 17 million as a signing bonus, 35 million to cover long-term incentives, 5.8 million for two years of remuneration and 10 million for moral and reputational damages. According to the judge, Santander’s breach of the contract was unilateral and unjustified. The Iberian institute now has 20 days to lodge an appeal. According to reports from the Spanish press, Santander will appeal against the sentence.
Failure to appoint
Orcel’s lawsuit against Santander starts in the summer of 2019 when the former UBS banker sues the Spanish giant chaired by Ana Botin who had renounced the appointment of the manager as CEO of the Spanish bank. Orcel’s initial request had been for 100 million euros, which was then reduced in the course of the civil trial. In September 2018, Santander announced an agreement to appoint Orcel as CEO except to turn around in January 2019. The very significant cost that Santander would have had to pay to insure Orcel’s performance, reimbursing him the bonuses accrued in Ubs and not perceived.
Weber’s testimony
Last October 20 at the hearing, the president of UBS, Axel Weber, testified. Connected via video, the banker explained that in September 2018 he expressed to Ana Botin, president of Santander, the strong belief that Orcel – surprisingly present at the hearing – would probably lose his deferred pay if he moved to the Iberian institution. .