UniCredit to reassess CEO's pay ahead of 2023 meeting

A document on its website shows that the remuneration of CEO Andrea Orcel will be reassessed ahead of its 2023 general meeting to see if the results achieved by Italy's second biggest bank in 2021 -- 2022 warrant an increase.

In a statement on Friday, UniCredit Chairman Pier Carlo Padoan said that the bank's remuneration committee would make a recommendation to the board on the CEO's pay incorporating views of investors and wider stakeholders, adding that the CEO himself had not asked for a raise.

UniCredit's latest remuneration report said that the CEO's current pay structure and regulatory ceiling - caps variable pay at twice the fixed amount - prevented the bank from rewarding over-performance when targets were exceeded.

The report said the board examined Orcel's pay package in light of the important performance reached under his leadership in 2021. Orcel said he prefers to keep his fixed pay unchanged and his variable pay closely linked to performance goals, which is why he said he prefers to keep his fixed pay unchanged.

The board agrees and will reassess Orcel's pay ahead of the general shareholder meeting in 2023, based on results and progress made in 2021 and 2022, it concluded.

In April 2021, the former head of investment banking at UBS arrived at UniCredit and pledged to reverse a phase of active retrenchment under the risk-averse CEO Jean Pierre Mustier.

Orcel is turning the bank around from a commercial point of view, but he has so far failed to strike a merger and acquisition deal like his predecessor.

Orcel pledged to return more than 16 billion euros in dividends and buybacks to investors by 2024 after dropping the proposed takeover of smaller rival Monte dei Paschi. He said that the bank could hit the distribution goal even in a severe recession after the Ukraine war and energy crisis prompted banking supervisors to call for caution.

On his arrival at UniCredit, Orcel narrowly dodged shareholder revolt over his pay, which is double that of Mustier, with leading investor advisory firms raising concerns over his salary in March.

Orcel's distribution promise lifted UniCredit shares to a four-year high of 15.7 euro before the war, from 8.5 euros just before he took over, giving the CEO ammunition for potential M&A deals paid for in shares.

The bank's large exposure to Russia, a business Orcel has held on to, has seen its shares fall again, to close on Friday at 12.5 euros.

The Financial Times reported on the matter that UniCredit sought a pay hike for Orcel.