Spanish court cuts Santander’s payout to Andrea Orcel by €8mn

A Madrid court has cut the amount of money Santander has to pay to Andrea Orcel by €8mn, in the latest twist in the long-running battle between Spain’s biggest lender and one of Europe’s best-known bankers.

Santander will now have to pay €43.5mn to Orcel in compensation for its aborted offer for the Italian to become chief executive in 2018 after the bank appealed against a judge’s initial award last January.

The court’s decision, announced on Monday morning, can be appealed at Spain’s supreme court, leaving the possibility of one of the most hotly contested and personal feuds in European banking dragging on.

“From the outset this case was about securing the truth and establishing the importance of acting with honesty and integrity,” Orcel said in a statement. “I am pleased that today’s ruling vindicates truth and justice by proving incontrovertibly for the second time in a court of law that there was a fundamental breach of contract by Santander as we have always argued.”

Orcel brought the case in 2019 and initially sought €112mn, based on a combination of lost salary and bonus from Santander, lost long-term incentives from his previous employer, UBS, and compensation “for moral and reputational damages”.

He later halved his claim and was eventually awarded €51.4mn in January 2022. The five judges overseeing the appeal upheld Orcel’s claim over the validity of his employment contract but reduced his payout for moral damages from €10mn to €2mn.

Santander did not immediately comment on the ruling but a person with knowledge of the bank’s plans said it was considering whether to appeal against the latest decision.

The case relates to an offer Santander made to Orcel in 2018 to become chief executive, which the bank withdrew weeks later after the former Merrill Lynch dealmaker had resigned from his position as head of UBS’s investment bank.

Orcel alleged that the bank’s reversal of the decision it made in September 2018 constituted a breach of contract. In arguments ultimately rejected by the court, Santander claimed Orcel’s offer letter did not amount to a contract under Spanish law.

The long-running legal fight has proved an unwanted distraction for Ana Botín, executive chair of the Spanish lender, whose tenure since succeeding her father, Emilio Botín, has been marked by the decision first to hire Orcel, long a confidant of her family, and then to drop him.