From Breakingviews - UniCredit finds costly fix for faulty CEO pay
of 2.5 million euros and a bonus worth twice that amount - the maximum allowed under European rules – if he hit certain targets. However, there was no extra perk if the bank exceeded its goals, as it did in 2022. Despite a war and an energy crisis, but helped by rising interest rates, Orcel delivered the bank’s best net profit in a decade and returned 5.25 billion euros to investors in share buybacks and dividends, 40% more than in the previous year.
To give Orcel an incentive to beat his goals again, and to keep the pay-conscious dealmaker happy, UniCredit tweaked the package. It hiked his fixed pay to 3.25 million euros but changed the way the bonus will be allocated. If Orcel hits new and more challenging targets he will earn a bonus of 4.25 million euros, lower than last year’s payout, paid all in stock. But if he overshoots again, he could get up to 9.75 million euros. Incentivising overperformance makes sense.
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