Banco Santander does not want to overlook the failed signing of Andrea Orcel as CEO last January. The hiring of the banker, who came from UBS, was frustrated because he demanded a payment of 50 million. Therefore, the entity chaired by Ana Botín will propose to the next meeting of shareholders to limit the bonuses or bonuses paid to the new executive directors for joining the entity.
The dust raised by the Orcel case and its repercussion in the media has caused Banco Santander to move the file and prevent it from happening again. "The hiring bonuses can only be agreed once with the executive directors, may be paid in cash or in shares and, in both cases, will not exceed the maximum variable remuneration that was delivered to all executive directors in the previous year," the bank in the annual report registered with the National Securities Market Commission (CNMV).
The variable remuneration accrued by the bank's three current executive directors in 2018 amounted to 10.4 million euros: President Ana Botín received 4,736 million; the CEO, José Antonio Álvarez, took 3,164 million, and the vice president, Rodrigo Echenique, 2,512 million. Of this total amount, 6.5 million were variable remuneration of immediate payment (half in shares) and 3.9 million deferred payment (also with 50% in shares).
As a whole, the council obtained a remuneration of 28.91 million in 2018, 9.4% less due to the absence of Matías Rodríguez Inciarte, who has retired. Top management is made up of 18 people and received 60.26 million, 8% less than in 2017 when it had one more member. Despite the new regulation, the bank maintains the compensation that the manager must receive for the loss of the bonuses accumulated in the entity from which it comes, called buy outs . "If the new director comes from an entity outside the Santander group, he could be the beneficiary of a buy out to compensate for the loss of variable remuneration that it would have received from its originating entity if it had not accepted the offer of hiring the group and / or could receive a bonus for hiring as an incentive to join Banco Santander ", is stated in the report annual of the entity.
On September 25, Santander announced that it had signed Andrea Orcel as CEO. But he backed down on January 15. And he announced that José Antonio Álvarez, who was to be relieved, will continue as CEO and vice president of the council. Santander said it would not hire the top executive of investment bank UBS because it would have "an unacceptable cost", as it should compensate with more than 50 million.
During the negotiation, the Spanish bank had taken for granted that UBS would pay Orcel those outstanding bonuses, for not considering Santander a competitor, but it has not been like that.
The annual financial report of Santander revealed that the appointment of Orcel was "subject to the obtaining of the pertinent authorizations, to the adoption by the general meeting of the opportune agreements in relation to his future remuneration and the termination of the contractual connection that linked him to your previous employer. "
He added: "Subsequently, as a result of the modification of the bases on which this decision was made and that the costs of compensating Mr. Orcel for his past remunerations exceeded those taken into account when agreeing his appointment, in January 2019 , the board of directors agreed to nullify the appointment. "