Italian banker Andrea Orcel has cut his claim against Santander over a rescinded offer to make him chief executive by tens of millions of euros, sources said and a court document seen by Reuters on the eve of a hearing show.
The case, which stems from Santander’s decision more than two years ago to ditch plans to make Orcel its CEO after a disagreement over pay, is due to be heard in a Madrid court on Wednesday after several earlier hearings were delayed.
The hearing will revolve around whether a four-page offer letter was a binding job contract or a non-binding initial offer as argued by Santander. It is expected to be concluded in a day but a verdict could take weeks or months.
Orcel, who quit his job as the top investment banker at UBS (UBSG.S) in 2018 to join Santander, had been seeking as much as 112 million euros for breach of contract and the damage to his career from the last minute U-turn.
But he has now dropped the part of his legal claim that would require the Spanish bank to hire him because he has since been appointed CEO of Italy’s UniCredit (CRDI.MI), a source with knowledge of the matter, who declined to be named, told Reuters.
Earlier on Tuesday, the source said that the Italian banker was now seeking slightly more than 45 million euros ($55 million) from Spain’s largest bank.
That claim includes 17 million euros related to a bonus and around two years’ fixed salary at Santander, estimated at around 11 million euros, and around 20 million out of a 55 million compensation package that he was due to receive in future years from UBS (UBSG.S), according to the source.
That figure does not include around 10 million euros for alleged damage to Orcel’s reputation or an additional 10 million euros relating to a tax equalization scheme, which brings the total claim to 67 million euros, the court document shows.
This tax scheme was part of the compensation package from his then employer UBS.
The source with knowledge of the matter said that the reputational damage was unlikely to be accepted by the Madrid court given Orcel had landed a new job at UniCredit.
The legal rationale for the case, which centred on defending Orcel’s integrity and honour, was unchanged, the source said.
Santander and a spokesman for Orcel declined to comment.
BOTIN IN COURT
The two sides will face off in front of judge Javier Sanchez Beltran in a hearing, which was twice postponed, that is expected to include testimony from Santander Chairman Ana Botin.
Orcel, who has been out of a job for more than two years, is expected to attend the court hearing in person though he has not been called to testify, the source said.
Botin surprised the banking world when she offered Orcel, her go-to investment banker for advice on deal-making and strategy, the top job at Santander in September 2018.
It is less common for investment bankers to go directly to a top position in commercial banking and hiring a highly-paid dealmaker to run the largest bank in Spain, still recovering from recession and negotiating job cuts, proved contentious.
Santander changed its mind the following January, saying it could not meet Orcel’s pay demands, which centred on paying up to 35 million euros of the compensation package from UBS.
In addition to Botin, Roberto di Bernardini, who was Santander’s head of human resources at the time, is also expected to testify at Orcel’s request.
Santander has only asked for its general secretary Jaime Perez Renovales, who signed the original job offer, to testify, but this could be dropped, two sources said.
One of parties had requested Renovales to be removed from the list because he should not be allowed under Spanish law to testify as a witness and be the bank’s legal representative.
A court spokesman said the judge would take a final decision on Renovales on Wednesday.
UBS Chairman Axel Weber and Mark Shelton, head of performance and rewards at UBS, will not testify due to health reasons, a Madrid court said.