They say that from love to hate there is only one step. And in business, too. And in the face of insurmountable disagreements if there is no "friendly" agreement … divorce before the judge. This is the relationship between the president of Banco Santander, Ana Botín, and what could have been her new CEO this year, Andrea Orcel. Difficult solution seems to have a separation between the two bankers who, after a long friendship of more than 20 years, began to forge practically a year ago, after a summer full of negotiations from you to you. Today, between lawsuits and crossing accusations to discredit the contrary, the ball is not on the roof of any of the protagonists. Each one tries to load himself of reasons in a lawsuit that is not at all clear, nor in favor of any. The defense of both is in the legal basis that each one gives to the contract of discord.
Because beyond the causes of the break-up latent distrust of some members of the bank council who feared "having put the fox to take care of the chickens" – the bulk of the lawsuit revolves around the letter-offer that Santander and Orcel They signed in September 2018, when the signing of the Italian banker was announced publicly and abruptly.
According to Botín's lawyers, Santander never materialized the hiring of Orcel as CEO. They assure that the appointment, as well as the main terms of the economic conditions included in the corresponding contract, was subject to the approval of the general meeting of shareholders set for April of this year. But Santander backed out. The board of directors of January 15 decided not to continue with the hiring of Orcel, once the pact with Botín was broken only one week before.
The Bank maintains that it acted at all times in good faith and that Orcel did not. The appointment was announced on September 25 after an exhaustive selection process. According to Santander, the manager, who was then at UBS and had a deferred compensation of 50 million euros, promised to negotiate with the Swiss group to take over part of his remuneration. At most he made it clear that he would pay 35 million.
The financial institution argues that, based on the Law, it was not a contract and that, for it to be, a series of conditions had to be met. Among these, that Orcel reduced the cost of up to 35 million that Santander was willing to compensate for the bonus that it would lose from UBS, and that this entity always pay 50% of this remuneration. That is, if UBS finally paid 20 million, Santander would put another 20.
But, as I pointed out, beyond the disputes over deferred compensation, the central point of Santander's response is that the contract never materialized. In this sense, the documentary evidence provided by Orcel, according to the bank's lawyers, is worthless. The entity argues that the offer letter is not the contract required by the Capital Companies Law and neither that appointment was effective nor the contract between the parties was perfected, as it was pending negotiation and agreement on one of its essential elements, such as it is that of deferred compensation, in addition to ratification by the shareholders meeting.
By the times managed, someone – Orcel? – will then think that others had bad faith because they did not have time to propose together a change to more in the top of the compensation of managers to make effective and perfect the contract. In addition, on January 7, to avoid reaching adults, Orcel was proposed to be part of the Santander family, more or less … but not in the promised place, presiding perhaps some subsidiary or company dependent on the group . Little grace made the banker such an approach, and suggested, even in good manners, without lawsuits in sight, that that was not what was spoken "among friends" in the middle of the New York Big Apple almost a year earlier.
Did you really think that an executive with the trajectory of the Italian was going to settle for a public degradation of gallons and here peace and then glory? His image and reputation has been damaged, he said.
Orcel, who does not want to hear about the famous legal saying of "better a good agreement than a lawsuit," says he was made a firm offer and therefore left his position at UBS. To do this, sources close to the process point out that the legal representatives of the manager will present to the judge said document that accredits him, will base his defense on the fact that it is a contract protected under the civil code, several crossed emails and several recordings with Botín that corroborate it. If it is lawful or not or taken into account, a judge will decide. The least for him – although, according to legal sources, more than one hundred million euros is outrageous – is compensation.
Perhaps the times were the wrong ones, and Botín had to first raise that change in the bank's remuneration policy and then announce the signing of a new CEO, once he was proposed to the board and weighing the opinion of all of them. Because having done things as they have done leaves an open wound in the entire waterline of the entity. Doubts about a coherent and solvent corporate governance capable of successfully and quickly resolving these types of decisions. The relevance of reputation as a competitive differentiator that generates value for companies is indisputable. And experience shows that crisis management in its first 48 hours clearly determines the difference between leaving unharmed, touched or sunk from the "disaster." The latency between reputation and solvency takes time to explode but when it does it is minimal.
Therefore, financial sources say, the leadership capacity of a questioned by some shareholders, president who has undervalued her opponent, may also be touched. Machiavelli said that "a battle won does forget all other bad actions, but if you lose it, all things that have been done well before will be useless."