The performance of a CEO is one of the most important factors in determining a company’s success. If a CEO is weak, it can have far-reaching implications for a business and its shareholders. With this in mind, it’s no surprise that companies go to great lengths to attract and retain top talent. Recently, the board of UniCredit proposed a substantial 30% salary increase for their CEO Andrea Orcel—one that has generated a lot of controversy within the financial sector. In this blog post, we will explore the merits of this proposal, whether or not it is deserved and what it says about the current state of executive compensation.
Who is Andrea Orcel?
Andrea Orcel is the current CEO of UniCredit, one of Europe’s largest banks. He was appointed to the role in 2012, and his current salary is €2.5 million.
The UniCredit Board has proposed a significant salary increase for Andrea Orcel, to €8 million. This is a raise of over 200%.
There are a number of reasons why the Board may feel that this raise is deserved. Firstly, under Orcel’s leadership, UniCredit has turned around its financial performance, returning to profit in 2017 after three years of losses. The bank has also been successfully implementing a major restructuring plan, which is on track to deliver €13 billion of cost savings by 2019.
In addition, Orcel has been widely praised for his handling of the aftermath of the Brexit vote last year. His quick decision-making ensured that UniCredit was one of the few European banks to escape serious damage from the UK’s decision to leave the EU.
However, there are also some valid criticisms of Orcel’s performance as CEO. One concern is that UniCredit continues to have a large amount of non-performing loans on its balance sheet – €28 billion at the end of 2017. This is partly due to the fact that UniCredit owns a number of troubled Italian banks, which have been slow to clean up their loan portfolios. Another worry is that UniCredit remains heavily reliant on wholesale funding markets, which makes it
What has he done for UniCredit?
In the wake of the coronavirus pandemic, UniCredit’s board has proposed a significant salary increase for its CEO Andrea Orcel. The move has been met with criticism from some shareholders, who argue that it is not deserved.
Orcel has been at the helm of UniCredit since 2016, and during his tenure, the bank has struggled. It has posted losses in three out of the four years Orcel has been in charge, and its shares have underperformed those of its peers.
The proposed salary increase would see Orcel’s total pay package jump from €7.5 million to €12 million. This is a significant sum, especially given the current economic climate.
UniCredit is not the only company to have come under fire for awarding large salaries to its executives. In recent months, there have been a number of high-profile cases where companies have faced criticism for awarding large payouts while ordinary workers are facing wage cuts or job losses.
Why are shareholders angry about the salary increase proposal?
Shareholders are angry about the salary increase proposal for several reasons. First, they believe that CEO Andrea Orcel does not deserve a raise after the bank’s disappointing performance in recent years. Second, they believe that the proposed salary increase is excessive and would further widen the gap between top executives and rank-and-file employees. Finally, some shareholders believe that the board should not be considering a salary increase for Orcel while the bank is still under investigation for its role in the 2015 Monte dei Paschi di Siena banking scandal.
How much would Orcel’s new salary be?
Orcel’s new salary would be €17.7 million, a significant increase from his previous salary of €9 million. This raise is controversial, as it comes at a time when the company is struggling financially. Some shareholders believe that Orcel is not deserving of such a large raise, and that the company should be investing its money elsewhere.
Is the salary increase deserved?
The board of directors at UniCredit has proposed a 6% salary increase for CEO Andrea Orcel, taking his total pay package to €8.4 million. This has sparked debate over whether the salary increase is deserved, considering the challenging conditions in the banking sector.
On one hand, it could be argued that Orcel deserves the salary increase as he has successfully steered UniCredit through a difficult period. The bank has reported strong financial results under his leadership, and he has been praised for his efforts to turn the bank around.
On the other hand, some would say that Orcel’s salary is already too high and that a further increase is unjustifiable. They point to the fact that many ordinary workers are struggling to get by on much lower salaries, and that bankers’ pay packages are often seen as being excessive.
What do you think? Is Andrea Orcel deserving of a 6% salary increase, taking his total pay package to €8.4 million?
Conclusion
Ultimately, it is impossible to make a definitive judgment on the issue of whether or not UniCredit Board’s proposed 30% salary increase for CEO Andrea Orcel is deserved. The decision must be based on an objective assessment of his performance and the overall financial situation of the company. That being said, this case highlights the need for increased transparency and accountability when it comes to executive compensation in large corporations. By allowing shareholders, employees, and other stakeholders to better understand how executive pay decisions are made, companies can work towards ensuring that their top leaders earn salaries that accurately reflect their efforts and contributions.
