Andrea Orcel demanded that Santander’s Ana Botín “empower” him in his role as chief executive of the Spanish lender days before the group abandoned its plans to hire him, according to correspondence seen by the Financial Times.
In a December 20 exchange on Signal, the encrypted messaging app, Mr Orcel told Ms Botín, Santander’s executive chairman, that he wanted to install a “cascade” system in which he answered to her, but all other executives answered to him: “My execution but your decisions,” he wrote.
He also said the bank had to “improve discipline and the efficiency of execution” if it was to raise its share price. The stock has fallen 17 per cent in the past year and is trading near a 10-year low.
The private messages between the two then friends play an important role in Mr Orcel’s lawsuit against Santander, in which he demands to be given the post of chief executive or, failing that, compensation of €112m.
Santander named Mr Orcel, former head of UBS’s investment bank, as its new chief executive in September last year before making a U-turn on his appointment four months later.
Mr Orcel’s case against the bank suggests that Ms Botín decided to drop him days after the December 20 messages because she had second thoughts about the power he was demanding and the public profile he would have as chief executive, as well as the goals he set out.
But the Spanish bank said it changed course, after a joint decision by the group’s remuneration and nomination committees, because of Mr Orcel’s demands over money and his alleged failure to make “best efforts” to reduce the cost to the bank of his package.
“This correspondence has nothing to do with the case and any connection to the board [of directors’] decision not to proceed with Mr Orcel’s appointment has no factual basis,” a Santander spokesman said.
“At the time the messages were sent the board and its committees had already raised serious concerns about the final cost of the appointment and the way Mr Orcel was conducting himself during negotiations. There was no reference at all in any of the board or committee meetings to his role or functions.”
Mr Orcel could not be reached for comment.
The case, which is likely to take months, revolves around whether an offer letter sent to the Italian banker constituted a contract. While the document was signed by both sides — and according to Mr Orcel’s case was binding — Santander has said that Spanish corporate law and its own rules required a separate contract approved by two-thirds of its board of directors.
In the December message to Ms Botín, Mr Orcel expressed unease about publicity over his proposed package of up to a maximum of €35m in Santander shares if UBS gave him less deferred pay than he was due — and a cash sign-on bonus of €17m.
He said he wanted to talk directly to Ms Botín about the decision of Santander’s remuneration committee and board of directors about his buyout and also about “the very negative effect that the publication of this buyout could have at the personal and institutional level”.
He added that he wanted to talk to her about “the perimeter and empowerment of my role, since I understand your perspectives (above all) and those of the country, business and area chief executives, but my [perspective] also exists relative to what is needed to carry out the work for which you have hired me.”
He noted that he had been told that Ms Botín had to sign off “on all the hirings I wish to do including my very reduced staff”.
His message called for more investment in Santander’s profitable businesses and cutbacks in “bad ones” as well as a revised strategy for the bank’s investment banking and wealth management arms.
Mr Orcel asked Ms Botín for “a call in the coming days, since these issues are time sensitive”. However, in her reply the Santander chair suggested a “halt to see where we are, and for that we should see each other and have a calm and frank conversation” in Madrid in January.
When that meeting took place, on January 7, Mr Orcel was told Santander was not proceeding with his hire.
Ms Botín’s brief message to Mr Orcel also addressed the issue of his package. While Santander had hoped that UBS would pay more of Mr Orcel’s deferred pay, she said that “on the subject of compensation [UBS chairman] Axel [Weber] is not moving at all. Basically 0 [zero].”