MILAN (Reuters) -Shareholders in UniCredit on Thursday approved the bank’s pay policy for this year and the last, shrugging off recommendations by leading governance advisers to reject the proposals.
Both Institutional Shareholder Services (ISS) and Glass Lewis had recommended UniCredit investors reject the remuneration policy for 2024 and 2025, deeming excessive the increase in the pay package of CEO Andrea Orcel.
A one-off share award lifted Orcel’s pay by around 30% last year to 13.2 million euros.
The one-off payment follows a regulatory clarification UniCredit received on how to calculate the price of shares in the stock part of the compensation packages of top executives.
UniCredit has said the award was necessary to offset the negative impact of the clarification.
Orcel, already one of Europe’s best-paid bank CEOs, stands to earn as much as 16.4 million euros in 2025 if he manages to exceed this year’s targets.
The policy for 2025 was backed by 66.5% of votes of shareholders present at the annual meeting. That is sharply down from an approval rate of 88% last year.
Similarly, the percentage of favourable votes at the meeting on the 2024 pay packages fell to 65.6% from 88%.
UniCredit has defended its remuneration policy saying it is designed to reward over-performance and necessary to retain an outstanding CEO such as Orcel.
Since the former UBS investment banker arrived at UniCredit in 2021, the total shareholder return has risen by nearly 750%, or almost four times the increase recorded at its European competitors, Orcel told shareholders on Thursday.
In defence of its policy, UniCredit also says peers on average pay only 65% of the variable part of remuneration packages in shares, against 100% at the Milanese bank.
(Reporting by Valentina Za, editing by Gianluca Semeraro and Angus MacSwan)
