MILAN, March 17 (Reuters) – UniCredit (CRDI.MI) has instructed proxy advisers that their suggestion to reject the Italian financial institution’s new remuneration coverage would lead to increased fastened pay for CEO Andrea Orcel with out a more difficult framework.
UniCredit has proposed a brand new remuneration construction for its CEO that may enhance his pay package deal by 30% if he beats a brand new set of targets for 2023, whereas penalising underperformance greater than up to now.
Hitting the targets would see Orcel’s pay unchanged at an general 7.5 million euros, with a discount within the variable part offsetting a 30% enhance within the fastened half to three.25 million euros.
“The elevated quantum of fastened wage is the one aspect of this proposal that’s an act of the board and isn’t voted on on the AGM,” UniCredit mentioned in a letter to the advisors seen by Reuters.
“At the moment of battle for expertise, our organisation can not afford to have an incentive system for the CEO which isn’t aligned with the philosophy we apply to the remainder of the organisation,” it added.
Rejecting the remuneration proposal, UniCredit mentioned, would depart in place targets set up to now and take away proposed modifications comparable to paying the variable half all in shares, with out a 20% money part, in addition to spreading it over an extended time frame.
Orcel narrowly dodged a shareholder revolt over pay when he first arrived at UniCredit (CRDI.MI) as buyers took intention at a 4.8 million euro sign-on bonus and a 15 million euro severance cost.
“The 15 million euro max restrict is a theoretical cap and never a assured severance association,” UniCredit wrote within the letter including that it was “disappointing that the small print of this aspect have remained misunderstood … given the period of time spent with the proxy advisor to elucidate.”
UniCredit mentioned eight consecutive quarters of year-on-year development and “distinctive per-share worth creation” created “a formidable monitor file” that warranted the pay modifications.
Reporting by Valentina Za, modifying by Federico Maccioni, Kirsten Donovan
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