By Pamela Barbaglia and Silvia Aloisi
LONDON/DAVOS (Reuters) – Andrea Orcel is awaiting a compensation offer from Santander to cover lost future earnings after the Spanish lender abruptly ditched the Italian banker’s appointment as chief executive, a source familiar with the matter told Reuters.
The former president of UBS’s investment bank, who was also a member of its executive committee, expects to receive an offer from Santander in early February after seeing his dream job evaporate, the source said.
Now that he is no longer joining Santander, Orcel will also try to recoup deferred pay from UBS, several other sources familiar with the situation said, adding that this would be payable as long as he retires from the world of finance.
“The fact that he is no longer joining a competitor changes the dynamic of the terms of his leaving,” one of the sources said. “No one has any desire for any more acrimony,” he added.
Santander, which declined to comment on Friday, had named Orcel as its next chief executive in September, only to ditch him in January, saying it had underestimated the deferred pay he had accumulated at UBS and could no longer afford to hire him.
Sources said Orcel’s deferred pay from UBS was estimated to be around 50 million euros (43 million pounds).
The 55-year old banker, who previously worked at Bank of America Merrill Lynch between 1992 and 2012, is on “gardening leave” until April 1, the source said, adding that he is in the process of appointing a lawyer familiar with Spanish law to advise him on his next steps.
UBS declined to comment on Orcel’s situation, but a spokesman for the Swiss bank said:
“If someone fulfils the requirements for career retirement at UBS, meaning mainly as long as they don’t work for another financial services organization following a certain amount of years with UBS, they receive their deferred compensation. It’s granted on the existing deferral schedule.”
Rome-born Orcel, whose most notable deal was the 2007 three-way purchase of ABN Amro by RBS, Fortis and Santander while he was at Bank of America Merrill Lynch, has taken up kickboxing during his enforced break and is spending more time with his eight-year-old daughter.
UBS Chief Executive Sergio Ermotti told Reuters on Thursday that a return by Orcel was not a “realistic option.”
Santander’s decision to drop him came as a surprise to Orcel, who went travelling in South America after beginning his gardening leave when he left UBS last October.
(Additional reporting by Andres Gonzalez in Madrid and Brenna Hughes Neghaiwi in Zurich; Editing by Alexander Smith)