A judge in Madrid has reduced Santander’s compensation to Andrea Orcel by € 16.4 million over the Spanish bank’s failed attempt to appoint the Italian chief executive.
An amended ruling on Friday ordered Santander to pay Orcel € 51.4 million, less than the € 68 million decided last month. The ruling also said that, rather than receiving the full amount in cash, Orcel would receive € 18.6 million of the total in Santander shares over seven years, based on the bank’s standard criteria for long-term incentive plans.
Last month’s ruling in Madrid court brought a long-running dispute between Orcel, one of Europe’s best-known investment bankers and now head of UniCredit, and Spanish lender Santander, his former client when he worked at UBS and Merrill Lynch.
The case, brought by Orcel, centered on Santander’s decision to withdraw an offer it made to him in 2018 when he managed UBS’s investment bank.
The original sentence charged Orcel € 10 million “for moral and reputational damage”, as well as contractual items including € 5.8 million for two years’ salary, a € 17 million sign-up bonus and € 35 million compensation for the loss of long-term incentives at UBS.
But lawyers on both sides pointed out that it did not take into account payments that Orcel had already received from UBS and therefore the judge increased the amount awarded for the loss of long-term incentives from € 35 million to € 18.6 million, according to court documents seen by the Financial Times. The judge’s revised ruling was first reported by Reuters.
Last May, Orcel halved its claim for compensation from Santander, after originally seeking € 112 million.
Orcel claimed that the bank’s withdrawal of the decision it took in September 2018 constituted a breach of contract. In arguments that were eventually rejected by the court, Santander claimed Orcel’s offer letter did not amount to a contract under Spanish law.
“We welcome this explanation and will resume the appeal process in due course,” Santander said, but the bank continues to dispute the judge’s findings.
Orcel was not immediately available for comment.