UBS was so eager to keep its former top investment banker from defecting to Santander that it reportedly offered to anoint him as crown prince.
The Swiss bank suffered a body blow when Andrea Orcel, head of its investment bank since 2012, announced his departure for the CEO job at Santander. Famously, the Spanish bank cancelled the offer in January, leaving the veteran Italian dealmaker out of both jobs. Orcel is heading to court with Santander and Chairman Ana Botin following the hiring debacle last year.
UBS was so keen to keep Orcel on board that it offered to position him as the clear number-two, behind CEO Sergio Ermotti, if he turned down Santander, Swiss magazine «Bilanz» (in German) reported, without citing its sources. The outlet is traditionally used by people close to UBS' management to air their views.
UBS Counteroffer
The counteroffer was conceived by UBS Chairman Axel Weber and his nominating committee colleague, ex-Morgan Stanley finance chief David Sidwell. The two viewed Orcel as instrumental to stabilize the Swiss bank's stock, which has languished for months, during an eventual CEO change, according to the magazine.
Equally, UBS' board made clear to Orcel and to Botin that there would be no going back should the investment banker elect to leave the Swiss bank, «Bilanz» reported. The bank apparently feared setting a dangerous precedent if it made concessions to Orcel on his six-month leave or on bonuses held back over several years.
Lawsuit Looms
UBS backed up the threat: the bank held to both of the terms when Santander in January reneged on its plans to give him the CEO job. «Bilanz» reports that Santander balked after its influential regional heads successfully lobbied the bank's board after fearing they would lose power to the CEO, and Botin also grew apprehensive that Orcel could overshadow her.
A spokesman for UBS didn't comment. The hiring debacle reportedly cost Orcel upward of 50 million euros ($56.5 million) in UBS awards he relinquished in favor of the Santander job. The details of his planned lawsuit against Santander for reneging on the contract are expected this summer.
