In a contentious paper released prior to the lender’s annual general meeting, top governance counsel Glass Lewis stated that UniCredit’s, opens new tab continued involvement in Russia exposes the Italian bank to reputational problems. 

Compensation Package

At their April 12 meeting, UniCredit shareholders will ratify the company’s full year’s financial performance and give Chief Executive Andrea Orcel a new three-year term.

Glass Lewis also targeted Orcel’s planned pay rise, which the bank intends to implement due to an adjustment in the method by which it determines the conversion price of shares allotted as part of compensation packages.

Friday’s closing gains in U.S. stocks came from a solid jobs report that supported the idea that the economy is still doing well, even as it also hinted that the Federal Reserve would postpone lowering interest rates.

UniCredit could not be reached for comment at this time. Glass Lewis urged shareholders to vote against the pay policy, citing Orcel’s increase as being excessive, in the proxy paper that was released before to the AGM.

His base pay will rise by 10.8% to 3.6 million euros under the proposal, which would be paid in shares.

Increased Stakeholders Scrutiny

This will increase the entire goal compensation from 7.5 million to 8.6 million, as well as the total maximum compensation from 9.75 million to 10.8 million if targets are exceeded.

Additionally, Glass Lewis reminded investors to “remember the company’s ongoing operations in Russia.”

According to the advisor, businesses that are still exposed to Russia should anticipate “increased stakeholder scrutiny of their approach,” which might result in “material reputational damage that may impact on shareholder value.”

“We believe that shareholders can reasonably expect companies that have decided to maintain material activities or operations in the region to provide extensive disclosure to the market,” it stated.