UniCredit says CEO’s Salary Would Rise if Pay Policy Gets Rejected
UniCredit has proposed a new compensation structure for the chief executive that would increase his pay package by 30% if he exceeds a new set of 2023 targets, while penalizing poor performance more than in the past.
UniCredit says CEO’s salary would rise if pay policy rejected
The Italian, only systemically important bank and the world’s 34th largest by assets, an international banking group headquartered in Milan, UniCredit says CEO’s salary would rise if pay policy get rejected
UniCredit has told proxy advisors that its recommendation to reject the Italian bank’s new remuneration policy would lead to higher fixed salaries for Chief Executive Andrea Orcel, without a more demanding framework.
UniCredit has proposed a new compensation structure for the chief executive that would increase his pay package by 30% if he exceeds a new set of 2023 targets, while penalizing poor performance more than in the past.
If the targets are met, Orcel’s total salary would remain unchanged at €7.5 million, with a reduction in the variable component offsetting a 30% increase in the fixed portion to €3.25 million.
“The increase in the fixed salary is the only element of this proposal that is an act of the board and will not be voted on at the annual general meeting,” UniCredit said in a letter to advisors obtained by Reuters.
“In this time of struggle for talent, our organization cannot afford to have an incentive system for the CEO that is not in line with the philosophy we apply to the rest of the organization,” it added.
UniCredit said If the compensation proposal got rejected, “the targets set in the past would be regularized and the proposed changes would be eliminated, such as paying the entire variable portion in shares, without a 20% cash component, and spreading it over a longer period.
Orcel narrowly escaped a shareholder revolt over his compensation when he took office at UniCredit in 2021. Investors had demanded an inaugural bonus of 4.8 million euros and a severance payment of 15 million euros.
“The cap of 15 million euros is a theoretical cap and not a guaranteed severance agreement,” UniCredit wrote in the letter, adding that it is “disappointing that the details of this element have remained misunderstood … given the time we spent with a proxy advisor on the statement.”
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