Investors at UniCredit have endorsed a new term for CEO Andrea Orcel and have also supported a pay increase for him.

Investors at UniCredit have approved a new term for CEO Andrea Orcel and have also agreed to a pay raise for him. This endorsement reflects confidence in Orcel's leadership and the direction in which he is steering the company.

UniCredit shareholders have approved CEO Andrea Orcel for another three-year term and have also endorsed the bank's remuneration policy, which positions Orcel as one of Europe's highest-paid bankers. At the meeting, attended by shareholders representing 68.8% of the bank's capital, major investors like U.S. asset manager BlackRock and German insurer Allianz were present. Orcel expressed his gratitude to shareholders, emphasizing his commitment to continually earning their trust and support.

"I don't take my position for granted. I see it as something that you have to continually earn," Orcel said in written remarks to shareholders. 

"We have made excellent progress in the last three years, but our transformation journey is not over ... We will be relentless in our determination to improve. This is the culture I want to spread across all levels of our group during my second term as CEO," he added.

UniCredit announced that CEO Andrea Orcel and other board candidates proposed by the bank's outgoing directors received 91.5% of the votes. Subsequently, in a board meeting held later on Friday, the bank appointed Italy's former Economy Minister Pier Carlo Padoan as the chair of the board, and academic Elena Carletti as the deputy vice chair.

At the meeting, shareholders holding 88% of the share capital entitled to vote expressed their support for UniCredit's 2024 remuneration policy, which had faced scrutiny from prominent proxy adviser Glass Lewis. After seeking clarification from the European Banking Authority regarding the calculation of share prices allotted as part of compensation packages to the bank's 800 "material risk takers," UniCredit decided to raise the CEO's fixed pay by 10.8%, to be paid in shares.

Now, the CEO's fixed pay has been adjusted to 3.6 million euros, while the overall target pay has been raised to 8.6 million euros from 7.5 million euros. Additionally, the maximum pay, applicable when targets are exceeded, has increased to 10.8 million euros.

Former investment banker Orcel has advocated for a significant cash return to investors as a means to boost UniCredit's share price. When Orcel assumed the CEO position in 2021, the share price was trading at nearly a 70% discount to its book value.

Orcel, recognized as Europe's most seasoned banking dealmaker, has refrained from pursuing significant deals thus far. He has expressed that he would only consider such moves if they can maintain current shareholder returns while simultaneously increasing profitability by a minimum of 10%.

Source: Reuters