MADRID (Reuters) -A Madrid court has ordered Santander to pay Italian banker Andrea Orcel 67.8 million euros ($76.42 million) over an offer to make him CEO which the Spanish bank withdrew.
The court said the bank’s job offer letter to Orcel was a binding contract and Santander will have to pay him the compensation.
“The contract was unilaterally and arbitrarily rescinded by Banco Santander (MC:SAN),” the court said in its ruling, which can be appealed before a Madrid regional court.
“The situation created by Banco Santander caused Mr Orcel clear moral damage,” the ruling, dated December 9 but released on Friday, said.
Santander and Orcel’s legal team declined to comment.
The court said Santander has to pay Orcel 17 million euros for a sign-in bonus, 35 million euros for a buyout clause, 5.8 million euros for two years’ salary and 10 million euros for moral and reputational damage.
The court said that Santander would also have to pay legal interest since the date of filing.
Orcel sued Spain’s largest bank after it withdrew the job offer almost three years ago in a dispute over his pay package.
The case revolved around whether a four-page offer letter to Orcel in September 2018 was a binding contract or a non-binding initial offer, as Santander Chairman Ana Botin asserted in the first session of the Madrid court hearing in May.
In January 2019, Santander said the bank could not meet Orcel’s pay demands, which included covering up to 35 million euros ($41 million) of a 55 million euros compensation package he was due to receive in future years from UBS.
Orcel originally sought as much as 112 million euros from Santander for breach of contract and damage to his career for the bank’s sudden U-turn.
But in May he dropped the part of his legal claim that would require the Spanish bank to hire him. This was after he was appointed CEO of Italian bank UniCredit.
He also reduced his demand to between 66 to 76 million euros, according to sources close to the matter, a court document and Santander’s lawyer.
($1 = 0.8866 euros)