Santander ordered to pay Orcel $76 million after losing court battle

Court hearing on Santander's withdrawn job offer for Orcel, in Madrid
FILE PHOTO: Italian banker Andrea Orcel attends a trial against Santander over the bank’s withdrawal of an offer to be CEO for him, at a high court in Madrid, Spain, May 19 5 year 2021. REUTERS / Juan Medina

December 10, 2021

By Jesus Aguado and Emma Pinedo

MADRID (Reuters) – A Madrid court ordered Santander to pay Italian banker Andrea Orcel 67.8 million euros ($76.42 million) after it withdrew its offer to appoint him as Chief Executive. executives, an expensive turn in a job dispute that has captivated the world of high finance. The controversy between Orcel and Santander president Ana Botin broke a close relationship with the profession – Orcel had previously been a Botin investment banker – and took Europe’s star trader by surprise. job loss.

Orcel and Botin ended up going to court after Spain’s largest bank rejected plans to make the former investment banker UBS CEO due to disagreements over his salary. Orcel has left UBS to prepare for a new role.

The court said Santander’s letter of employment for Orcel was a binding contract and Santander would have to compensate him.

“The contract was unilaterally and arbitrarily canceled by Banco Santander,” the court said in its ruling, which can be appealed in 20 days before the Madrid regional court.

Some court sources said the appeal could delay the final ruling for another year or two if the legal proceedings reach Spain’s Supreme Court.

“The situation created by Banco Santander has caused obvious emotional harm to Mr Orcel,” the ruling, issued Dec. 9 but published on Friday, said.

A spokesperson for Santander said the bank would appeal the ruling.

A spokesperson said: “The Santander Board of Directors is confident that we will successfully appeal as two criminal complaints have been reviewed by the court in relation to this matter.

Both Orcel’s legal team and a spokesman for the Italian bank declined to comment.

The court ruling limits a successful week to Orcel, who is now the CEO of UniCredit. He won widespread praise on Thursday when he announced a new strategy for the Italian bank, pledging to return 16 billion euros to investors, sending the bank’s shares to their highest since February. 2020.


The court said Santander must pay Orcel 17 million euros in sign-up bonuses, 35 million euros for a buyout clause, 5.8 million euros for two years’ salary and 10 million euros in moral and reputational damages.

Santander is also required to pay legal interest from the date of application.

Some in the industry see the ruling as a blow to Botin and the bank as she personally courted Orcel for the role in the summer of 2018.

Enrique Quemada, CEO of Spanish investment bank ONEtoONE, told Reuters when asked for comment on the court ruling.

Quemada and his lawyers say Orcel’s compensation is in line with high compensation packages at top jobs in the industry.

“In a civil court, such an amount is not without. The amount may seem overwhelming, but he seems to be the Lionel Messi of banking,” said Eduardo Alonso, a lawyer for Spanish firm A&M Asociados.

The case revolved around whether a four-page letter of offer to Orcel in September 2018 was a binding contract or a non-binding initial offer, as Botin asserted in his first hearing. Madrid court in May.

In January 2019, Santander said the bank was unable to meet Orcel’s wage demands, which included paying out up to €35 million in compensation of €55 million he would receive over the coming years. from UBS.

Orcel had initially sought up to 112 million euros from Santander for breach of contract and damage to his career because of the bank’s sudden diversion.

But in May, he dropped his part of a legal complaint that would ask the Spanish bank to hire him. That was after he was appointed UniCredit CEO.

He also reduced his claim to between 66 and 76 million euros, according to sources close to the matter, a court document and Santander’s lawyer.

At the May hearing, Botin and Orcel, who were not called to testify, were seated just a few seats apart.

During the hearing, Botin testified that Orcel had also breached the terms of the invitation, which stated that he would make every effort to reduce the amount of deferred compensation Santander owed him.

She said he refused to deduct the 13.7 million euros that he would receive as a bonus from UBS for work completed in 2018 from the money he owed.

But on Friday, the court said that could not be seen as proving that Orcel did not make a good effort to try to reduce acquisitions.

In October, the court consulted the testimony of Axel Weber, the president of UBS, who said Orcel contacted him several times because he was unhappy with UBS’ decision not to increase his deferred payment. if he quits to join his Spaniards. end of 2018.

“Mr Orcel’s best efforts are considered unquestionable,” the court said in its 24-page ruling.

(1 dollar = 0.8866 euros)

(Reporting by Jesús Aguado and Emma Pinedo. Additional reporting by Valentina Za in Milan and Inti Landauro in Madrid and Pamela Barbaglia in London. Editing by Rachel Armstrong, Jane Merriman and Susan Fenton) Santander ordered to pay Orcel $76 million after losing court battle

Bobby Allyn

USTimeToday is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button