Starting from a higher fixed salary of 3.25 million euros, the new system ties the higher overall pay of up to 9.75 million euros to the bank's ability to beat targets set for 2023, the people said. A lower variable component than in 2022, to be paid all in shares, ensures that hitting the targets would mean Orcel gets the same compensation as this year, they added. Orcel, who forfeited millions of euros in deferred compensation from UBS in joining UniCredit, narrowly dodged a shareholder revolt on his arrival over his pay, which was double that of his predecessor and included a 4.8 million euro sign-on bonus unrelated to performance. Since then, UniCredit's share price has more than doubled, adding nearly 20 billion euros to the bank's market value and ensuring its return this week into the euro zone's blue-chip index Euro Stoxx 50 after seven years . UniCredit has also increased capital distribution to shareholders by 40% in 2022 and is paying out 5.25 billion euros to shareholders as dividends and, mainly, share buybacks out of last year's profits. ($1 = 0.9369 euros) (Reporting by Valentina Za Editing by Keith Weir)
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By Valentina Za
MILAN, March 1 (Reuters) - UniCredit will ask
shareholders to approve a new pay structure for Chief Executive
Andrea Orcel which offers a 30% rise if the Italian bank beats a
wide set of targets this year, people with knowledge of the
matter told Reuters on Wednesday.
Orcel's current pay package of up to 7.5 million euros ($8
million) a year already makes the former head of investment
banking at Swiss lender UBS one of Europe's best paid
banking executives.
Orcel took the reins in April 2021 of a bank that had been
through years of restructuring to clean up its balance sheet and
rebuild capital reserves.
A hard-charging executive, he vowed to end an era of "active
retrenchment" and went on to de-centralise decision making to
speed up the response to clients' needs.
Helped like other lenders by higher interest rates but also
able to grow net fees slightly despite tough markets, UniCredit
posted its best net profit in a decade in 2022.
UniCredit shares are up 42% so far this year, against a 19%
rise in Europe's banking index .
UniCredit's board said last year it would review the CEO's
pay on the basis of 2022 earnings, noting that European Union
rules capping variable compensation at up to twice the fixed
salary made it impossible to reward outperformance.
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