UniCredit to boost bonus pool up to 20% after strong year

BLOOMBERG

UniCredit SpA is set to increase its overall bonus pool for 2022 by about 20%, after a year in which the Italian lender beat profit expectations and increased shareholder returns, people familiar with the matter said.
The Milan-based bank’s payout covers non-executive employees working at branches and offices and about 900 top managers with risk responsibilities, said the people, who asked not to be named discussing private information. UniCredit is set to increase the average bonus for the top managers, so-called “material-risk takers,” by 22%, compared with a 20% average raise for the entire group, they said.
In the last two years the total remuneration of non-executive employees working at branches rose by about 12%, with gains reaching 20% in central and eastern European countries, the people said.
UniCredit has already allocated a third of the €100 million ($106 million) it set aside in its strategic plan through 2024 to reduce the gender pay gap, they said.
UniCredit could also raise Chief Executive Officer Andrea Orcel’s total pay by between 20% and 40%, some of the people said, confirming a report from Il Sole 24 Ore.
While risk-takers will get on average more than their non-executive colleagues, the pool of funds set aside for them will be almost unchanged compared to last year, as there are about 100 bankers fewer than a year ago in this category.
A spokesman for UniCredit declined to comment.
UniCredit shares rose as much as 5% on Monday, ahead of the Stoxx Europe 600 banks index.
A bigger reward for staff would cap a year in which UniCredit posted a profit of €6.5 billion, cut total costs by 2% and increased shareholder remuneration by 40%, in an apparent vindication of Orcel’s strategy.
Since taking charge at Italy’s second-biggest bank almost two years ago, Orcel has exited businesses, cut jobs in non-core locations and sought to focus on more lucrative products and capital-light activities.
The increase is set to be one of the most generous among European banks which struggled with higher costs and mixed outcomes in trading through a volatile year. In Germany, Deutsche Bank AG is considering slightly higher bonuses for its traders while drastically shrinking those paid to staff who help issue bonds and stocks, reflecting the strong divergence in performance between the two businesses.
UniCredit has gained 43% this year, compared with a 19% increase in the 39-member STOXX Europe 600 Banks Index. Shares are up 4.3% at €19 as of 11:31 am local time.