The maxi-salary of 7.5 million euros for the first year agreed by the top banker Andrea Orcel for the position of CEO of Unicredit continues to be discussed. The appointment will take place at the shareholders’ meeting on April 15 together with the renewal of the board of directors which envisages the former Minister of the Economy Pier Carlo Padoan as the future president. If the name of the manager is not in question, however, the consultants of the market shareholders – the so-called proxy advisors – have contested Orcel’s remuneration not so much in the entity but because it would effectively make the variable component fixed, given that shares are immediately assigned to the manager regardless of the bank’s performance. Why? Unicredit on Monday 12 April responded in writing to the questions of the shareholders. The meeting will be held only virtually, without the direct participation of the shareholders due to Covid: a salary that serves to attract high-level talent, the substance of the institute’s responses.
The composition of the remuneration
The salary structure planned for 2021 for Mr. Orcel closely linked to the first year of his mandate and aimed at guaranteeing the right level of competitiveness and attraction for a high-level executive, the written answer to a member’s question. In this context, to replace the standard variable remuneration for 2021 and in order to favor the alignment of interests between the designated CEO and the shareholders through the dynamics of share prices (up and down), already in the first year in role, provided for a one-off share-based assignment, which will allow Mr. Orcel to satisfy the guidelines on the group’s shareholding structure, which require the CEO to maintain an equivalent value of 200% of the fixed remuneration in shares. Unicredit did not confirm the figure of 7.5 million euros – which emerged from a report by Jp Morgan – but specified that for Orcel a fixed remuneration defined between the market median and the top quartile of UniCredit’s European peer group, composed from 14 banks.
The acquisitions
Regarding possible extraordinary transactions – including an acquisition of Mps – the bank underlined that our portfolio of assets is constantly analyzed and evaluated in order to identify opportunities for optimization or growth. In the event of an extraordinary transaction, we will promptly inform the market in compliance with applicable laws and regulations.
A bank with 80% of foreign shareholders
To decide on Unicredit’s remuneration policies – to which Orcel’s remuneration is linked – will be the shareholders of a bank that is definitely a public company. UniCredit has approximately 287,000 shareholders. 19.28% of the capital held by subjects resident in Italy while 80.72% is owned by foreign shareholders, according to the data as of December 31, 2020 disclosed by Unicredit. The German Allianz just rose to 3.1% in the capital. The first Italian shareholder Leonardo Del Vecchio with 1.9%. The Cariverona and Cr Torino foundations follow, with approximately 1.7% each. I hope that the Unicredit shareholders’ meeting, which I am sure will recognize with broad consensus the value of the new CEO, will also include the opportunity for remuneration policies adequate to international standards and the global challenges that Unicredit will have to face. Basically, I think it is a controversy triggered for reasons that have nothing to do with the good of the bank and the country, said Fabrizio Palenzona, for years at the top of Unicredit, in an interview with Milan Finance.