Orcel takes public row with Santander over CEO job offer to court

One of the most public rows over a top job offer at Spain's Santander is heading to court next Wednesday, pitting the bank against Andrea Orcel just weeks before the renowned dealmaker takes the helm at Italy's UniCredit.
 

The case stems from Santander's decision two years ago to suddenly drop plans to make Orcel its CEO after a disagreement over his pay package.
 

The dispute has raised much interest in the financial community, not least for how public it has been, but also for the rare step to move to court, when such rows are generally dealt with behind close doors.
 

The Spanish court hearing is expected to be wrapped up in a day but the outcome could come weeks or even months later, meaning Orcel may well be already running UniCredit with the dispute still pending.
 

The disagreement is about whether a September, 2018 four-page offer letter was a binding job contract, as Orcel says, or a non-binding initial offer, as the bank says.
 

"It will be a trial where honour is expected to take centre stage," a source familiar with the case said.
 

There is, however, also money involved. Orcel is suing Santander, the euro zone's second-largest bank by market value for up to 112 million euros ($126 million).
 

The Italian, who was previously head of UBS Group's investment banking business, resigned from the Swiss bank when he was offered the Santander job.
 

NEW JOB
 

When Orcel's appointment was announced by Santander the bank promised to pay "up to" 35 million euros of a 55 million euro package that Orcel was due to receive in future years from UBS.
 

The offer letter said Orcel would make his "best efforts" to cap that cost by getting the Swiss bank to contribute, which according to Santander he did not do. UBS refused to pay and Orcel then told Santander he would not accept less than 35 million euros, eventually leading to the break-up.
 

Orcel demanded Santander honour its offer or pay compensation but he is expected to be appointed CEO at UniCredit after mid-April so may decide to drop his claim.
 

The source who is familiar with the situation told Reuters at the end of January that Orcel was open to reaching a settlement with Santander and would be ready to cut his claim to 60 million euros.
 

An out-of-court settlement between both parties can still be agreed before the ruling. If there is no deal, the ruling itself could be appealed, potentially extending the legal battle for months or even years.
 

Even if Orcel ends up winning he could opt for the ruling not to be executed to let him move on with his professional career in Italy, forgoing any compensation, the source said.
 

TESTIMONIES
 

Santander Executive Chairman Ana Botin will testify in court on Wednesday. UBS Chairman Axel Weber has been called as a witness but the bank declined to comment or say if he might be in court in person.
 

A source from the Madrid court said that Weber had requested to testify remotely but the judge had not taken a decision yet.

Orcel has not been called to testify but could be present in court, the source with knowledge of the matter said.
 

Santander declined to make comments ahead of the court case while Orcel did not immediately reply to a request for comment that Reuters submitted through UniCredit.