Red Faces as Top Bankers Get Their Math Wrong--Overheard
January 16 2019 - 9:35AM
Dow Jones News
By Paul J. Davies
Hiring chief executives is complicated, but rarely does it go so
wrong that an appointment is canceled months after the new boss has
publicly accepted and disappeared on gardening leave.
This is what happened at Europe's second-biggest bank Banco
Santander, when it hired Andrea Orcel, formerly head of UBS's
investment bank. Santander misjudged the cost of paying deferred
compensation from UBS that Mr. Orcel would lose, which turned out
to be more than $57 million.
It would take nearly five years for Ana Botín, the executive
chairman who actually runs the Spanish retail bank, to earn that in
fixed and variable pay and pension contributions at 2017's level.
She also has long-term share awards for the past six years, but
they are worth at most EUR8.5 million ($9.7 million) at today's
share price. Her current CEO's pay is much lower.
Balking at such a sum to hire Mr. Orcel is understandable, but
only realizing the cost now is an astounding error. Santander
should be deeply embarrassed.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
January 16, 2019 09:20 ET (14:20 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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