Orcel’s UniCredit Era Begins With Fuss Over His $9 Million Pay

Photographer: Francesca Volpi/Bloomberg

Before Andrea Orcel takes the helm of UniCredit SpA this week he’s already in the midst of controversy on a topic that’s followed him around in recent years: his pay.

The proposed 7.5 million euros ($8.9 million) in annual compensation for leading the Milan-based lender has drawn criticism from top investor advisers, which are advocating shareholders to vote against the pay package on April 15. Proxy firm ISS has pointed out that Orcel’s fixed remuneration is more than double that of his predecessor, Jean Pierre Mustier.

Two years after a prospective move to Banco Santander SA fell apart over disagreement on compensation, Orcel is finding that even pay packages less than what he made as the chief investment banker at UBS Group AG can bring scrutiny. As the region’s economy continues to suffer the effects of the coronavirus pandemic, regulators have pushed back against excessive banker rewards, and even rebuffed Deutsche Bank AG’s proposed bonus payout.

“The compensation of the new CEO raises significant concern,” ISS wrote to investors, adding that the package “clashes with the current global context,” recommendations from the European Central Bank and the “sobriety” of the Mustier era.

Yet even with the proposed package likely to be signed off on by the majority of investors, the 57-year-old will still probably miss out on tens of millions of dollars in deferred pay he’ll forgo from UBS in order to realize his ambition of becoming chief executive officer of a top European bank.

The Rome-born banker was set to receive as much as $50 million from UBS provided he stayed away from a competitor, and has already received around $20 million since leaving the Swiss bank. As UniCredit has said it won’t compensate him for the rest, the move will mean Orcel will walk away from around $30 million.

UniCredit’s 2021 remuneration policy to be voted on by shareholders proposes fixed pay for the CEO of 2.5 million euros and bonuses of up to 5 million euros, shifting the compensation into a range that outstrips most peers.

Read More: UniCredit Set to Make New CEO Orcel Better-Paid Than Predecessors