Italian banker Andrea Urcel won the first battle of the court war against Santander, but he still had to wait a long time, and could lose 68 million in damages awarded by the Madrid court.
The Spanish bank has 20 days to appeal a decision by the Madrid Court of First Instance, a term that the financial institution headed by Ana Putin has already confirmed its intention to use. Although the appeal confirms the lower court’s decision, Santander still has the option of appealing to the Spanish Supreme Court.
The “Orcel vs Santander” case shook the international press, bringing together three bank executives in a single room: Andrea Orcel, now CEO of Unicredit – as a procedural part – Anna Putin, leader of Santander, and Axel Weber, the head of UBS – both acting as witnesses. A court in the Spanish capital, Santander, has ordered compensation of € 68 million to the Italian banker, according to information provided by Effie.
The current CEO of Unicredit sued Santander in 2019 after the bank took a “step back” in hiring the banker in January of the same year after announcing the same offer in September 2018.
At that time, the Spanish bank justified its decline due to the fiscal deficit. Orcel was still director of the Swiss bank UBS and was earning around 50 million euros a year.
Then the Italian sued Santander and asked for € 112 million in compensation, in addition to its merger with the Spanish group.
However, one year after the filing of the lawsuit, Orcel was appointed CEO of Unicredit, reducing the value of the compensation claim to € 72 million.
The bank argued during the trial that Orcel had violated the agreement until his appointment as the group’s chief executive became effective.
The financial entity has confirmed that the offer sent to the banker includes a provision that Orcel must negotiate with UBS, paying up to 50% of its corresponding deferred remuneration for 2018, for the reduction. The amount Santander will pay him. This reward was around 35 million euros.
In May, Santander’s chief executive, Anna Botín, argued that Orcel’s appointment never took effect, because it was not approved by the board of directors or the shareholders’ meeting.
However, the Madrid Court of First Instance did not agree with this argument, stating that the contract was “valid and effective”.
According to the judge, the Spanish bank terminated the contract “unilaterally and unjustifiably”, contrary to the principles of the law, “with the consequences that this gesture entails”.
