NEW YORK (NYTIMES) - Andrea Orcel is Europe's most famous investment banker, a suave, brash and fabulously wealthy deal maker who counts many of the Continent's chief executives as his longtime clients.
Last autumn, he agreed to become one of those CEOs. He accepted a job running the day-to-day operations of Banco Santander, a sprawling European and United States lender whose ruling Botín family is one of Mr Orcel's oldest patrons.
On Tuesday (Jan 15), that deal unravelled - doomed by an extraordinary public spat over who would pay Mr Orcel the more than US$50 million (S$67.8 million) in deferred compensation he was owed by his previous employer, the Swiss bank UBS. It leaves Mr Orcel without a job and leaves his once-high-flying career in limbo.
Mr Orcel, who did not respond to requests for comment, was scheduled to become Santander's chief executive early this year, working hand in hand with the bank's executive chairman, Ms Ana Patricia Botín. Mr Orcel had spent the past seven years at UBS, heading investment banking, but he resigned after Santander said it was hiring him.
Ms Botín said in a statement on Tuesday that the bank had underestimated how much it would cost to hire him. She said Santander 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".
At a time when executive compensation is under growing scrutiny all over the world, Santander's decision represents perhaps the highest-profile instance of a corporation rescinding a job offer because it was worried about the blowback from a rich payday.
If it had gone ahead, Santander would have had to seek shareholder approval for Mr Orcel's compensation package. Senior executives feared that its eight-figure size would set off an investor uproar, especially among the bank's large contingent of individual stockholders, according to a person familiar with executives' thinking.
When Santander announced it was hiring Mr Orcel last September, analysts said the move could augur another round of acquisitions by the Spanish bank.
UBS, however, was not thrilled to lose a top executive. The Swiss bank enforced a provision in Mr Orcel's contract that required him to take a six-month break, known as garden leave, before defecting to a rival business. The move angered Santander executives, who viewed the manoeuvre as a needless jab at a longtime client of UBS.
But money turned out to be the bigger problem. During his seven years at UBS, Mr Orcel racked up well over US$50 million in deferred compensation, which the bank promised to pay him in the coming years.
When Santander hired Mr Orcel, it agreed to pay him whatever amount UBS didn't. Santander executives and board members figured that UBS would pay most of the deferred compensation and that Santander's share would be relatively small, according to people familiar with Santander's deliberations.
UBS, however, balked. After months of negotiations, executives at the Swiss bank informed Santander last week that they would not pay anything.
"This is a matter between Andrea Orcel and Santander," said Mr Dominik von Arx, a UBS spokesman. "UBS applied the compensation plan rules relevant in such cases and made them transparent to all parties before any decisions were made."
That left Santander and Mr Orcel with a choice. Either he could waive some of his deferred pay or Santander could make him whole.
Mr Orcel wouldn't give up the money. Santander wouldn't pay.
"What UBS did is quite predictable," said Mr C. Evan Stewart, a partner at the law firm Cohen & Gresser who specialises in financial services, "and it's surprising that Orcel thought that they would just sit back and give him his deferred compensation."