Santander drops out of Orcel hire due to high costs

Last night banking giant Santander shocked the industry when it reversed its decision to appoint Andrea Orcel as its new chief executive, stating that the cost of compensating him for leaving his previous role was too high.

The bank had announced the appointment of Orcel in September. Orcel was previously the head of investment banking at UBS, and was expected to take over from current CEO Jose Antonio Alvarez early this year.

However, in a statement released yesterday, the Spanish lender cited that it had “now become clear that the cost to Santander of compensating Mr Orcel for the deferred awards he has earned over the past seven years, and other benefits previously awarded to him, would be a sum significantly above the Board’s original expectations at the time of the appointment”.

According to the Financial Times, three people familiar with the discussions that took place noted that Santander was facing a bill of as much as €50m to pay Orcel for the UBS stock, which would have been paid in the form of shares in the Spanish bank that would have vested over time.

Despite this, two of the people highlighted that this figure could have been lower, depending on how much Orcel was willing to sacrifice.

In light of the decision, Jose Antonio Alvarez, who has remained in the role since the announcement, will continue to serve in his current role without change, and will also fill the position of vice chairman of the board. As a result of this, Alvarez may not be able to take up the position of chairman of Santander Spain in March, with current chairman Rodrigo Echenique staying in the position until a successor is named.

Commenting on the decision, Santander executive chairman of the board Ana Botin said: “Santander is a retail and commercial bank with significant responsibilities to the societies in which it operates. In making this decision we have had to balance the respect we have for all of our stakeholders - the millions of people, customers and shareholders we serve - with the very significant cost of hiring one individual, even one as talented as Andrea, by compensating for the loss of a significant proportion of seven years of his past remuneration.

“The Board and I are certain that this decision, although difficult to take, is the right one.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.