UniCredit backs CEO’s $2.7m payout after proxy disagreement

UniCredit SpA said the fixed remuneration package of 2.5 million euros ($2.75 million) for chief executive Andrea Orcel is in line with the remuneration of other comparable banks, and rejected a proposal from the agent of the Glass Lewis shareholders to vote against the executive compensation policy. Glass Lewis said he had “severe reservations” about the compensation policy, including the “lack of an explicit response” to concerns raised the previous year. UniCredit argued, in a letter to investors dated March 25 and seen by Bloomberg, that the assertions made by the proxy firm “are incorrect and may lead to the wrong conclusions.”

Orcel’s first pay deal after joining UniCredit last year raised eyebrows as it gave him the maximum amount of variable pay – 5 million euros – not subject to performance. The award was on the grounds that it could not be expected to be measured against results before he arrived, and the clause was changed to 2022.

UniCredit is offering a salary package for its executives in which Orcel is expected to receive fixed pay in line with last year, while variable pay will be linked to the achievement of performance targets set out in the bank’s plan.

UniCredit’s letter, signed by Chief People Officer Andrea Vintani, argued that Orcel’s deal is “between the median and third quartile of our benchmark European peers”. The bank also pointed out that it had substantially responded to a previous complaint from Glass Lewis.

UniCredit investors are due to vote on the compensation policy at the April 8 annual general meeting. Rival proxy firms Frontis and ISS have given their backing to the proposals. ISS, which advises more UniCredit shareholders, said “the company’s remuneration policy is well described and broadly aligned with best market practice.”

The letter was confirmed by a bank spokesperson.

Orcel supported investors with a better than expected performance last year and one of the most ambitious return on capital plans in Europe. Italy’s second-largest lender plans to distribute 3.75 billion euros in cash dividends and share buybacks from last year’s profits, as part of a wider plan to distribute around 16 billion euros by 2024.

The lender said it was considering leaving Russia after the invasion of Ukraine.

Summary of news:

  • UniCredit backs CEO’s $2.7m payout after proxy disagreement
  • Check out all the news and articles from the latest business news updates.
Disclaimer: If you need to update/edit this article, please visit our Help Center. For the latest updates, follow us on gohohgIand News