Banco Santander announced this week that plans to hire a new chief executive officer have been cancelled.
The financial institution issued a press release on Tuesday (Jan. 15) advising that plans to appoint Andrea Orcel as CEO have been cancelled. Santander first announced last September that it had chosen Orcel for the role, but ultimately Orcel and the bank were unable to reach an agreement on his compensation package.
Santander noted that Orcel and the bank have held discussions over the last few months regarding his departure from UBS.
"It has now become clear that the cost to Santander of compensating him for his deferred compensation over seven years, and other benefits that corresponded to him for his previous position, would be a sum significantly greater than initially foreseen by the board at the time of the announcement of his appointment," Santander said in a translated announcement.
The bank's current CEO José Antonio Álvarez will remain in the position rather than move to president of Santander Spain in March, as he was previously expected to do. The current President of Santander Spain Rodrigo Echenique will also continue in his position until a successor is chosen.
In a statement, Banco Santander President Ana Botín said that while it was "a difficult decision, we have taken the correct one."
Separate reports in The Wall Street Journal said Orcel has already departed UBS, with reports adding that the rare walk-back from the bank highlights ongoing debate over compensation levels for executives across Europe.
Santander's executive reshuffling comes amid a push for corporate banking and payments innovation. In October, the FI announced that it would adopt Ripple's distributed ledger infrastructure for its OnePay FX cross-border payments platform. At the time, the bank also announced plans to expand its international payments services across Europe.
In addition to working with Ripple, Santander is also pushing global payments progress with SWIFT, having joined the SWIFT gpi service, also in October.