February 26, 2021

BBVA’s leadership waives its 2020 variable remuneration


MADRID

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The president of BBVA, Carlos Torres Vila, and the CEO of the entity, Onur Genç, will not charge the variable remuneration for 2020. In a note sent to the media, the bank assures that it is a “Gesture of responsibility in a year marked by the Covid-19 pandemic and as a sign of its commitment to customers, shareholders, employees and the whole of society”. This is stated in the annual report on directors’ remuneration. In addition, the bank has updated its remuneration policy for the next three years, until 2023, and will submit the new measures for approval by the General Shareholders’ Meeting.

In total, 330 BBVA employees, including the chairman, the CEO and the rest of the people who run the bank at a global level have voluntarily waived, totally or partially, the 2020 variable remuneration. In the case of the chairman , This decision entails a 44% reduction in their remuneration generated in 2020; and for the CEO it represents 45% less.

Total, Torres Vila earned 2.45 million euros in 2020, amount that corresponds exclusively to their fixed remuneration. Vila also generated remuneration in kind of 228,000 euros and maintained an annual contribution for his retirement of 1.6 million euros.

For his part, the CEO, Onur Genç, collected 3.4 million euros; of that amount, 2.17 correspond to fixed remuneration and 1.25 million for his status as “senior international executive”, an amount that replaces the retirement benefit plus a mobility supplement. Genç, who has also not entered his bonus corresponding to 2020, had 132,000 euros of remuneration in kind, and has accrued 45% less than a year before.

New remuneration policy

The remuneration report also details a new remuneration policy that will come into effect this year and will be applicable for the 2021-2023 triennium once it is approved by the Shareholders’ Meeting, and which is adapted to the new features included in the Code of Good Governance of the listed companies of the CNMV, the guidelines of the European Banking Authority (EBA) and the community directives.

Among its novelties is the express incorporation of the principle of equal pay for men and women, the inclusion of metrics related to sustainability in the variable remuneration scheme for executive directors and a change in the calendars for the deferred payment of the variable – 60% of the remuneration will be charged in portions of 20% throughout five years-.

It also includes «malus» and «clawback» clauses in the variable of executive directors, that will allow to reduce and recover the amounts paid in case of significant reputational damage to the bank. And among the changes there is also a modification of the social security system of Carlos Torres, which will be reduced to almost a third, almost entirely offsetting this decrease in an increase in his fixed remuneration and the target variable.

Specific, The bank will contribute 439,000 euros to the piggy bank for his pension compared to the 1,642 million that he entered since 2017, which represents 15% of their fixed salary compared to the previous 67% and that is thus aligned with the contributions to the pension plans of the rest of the senior management. The difference will be divided between his fixed remuneration, which will rise from 2,453 to 2,924 million, and his target variable remuneration – will increase to 3,572 million. Torres has waived, in any case, 157,000 euros per year coinciding with these changes, which represents a 25% cut in the amount that is integrated into the fixed remuneration. Thus, and as detailed by the bank, the president’s total compensation calculated with the sum of fixed and variable income and pension will be reduced with this measure by 2%, at the same time that the levels of coverage for death and disability of the President.

The fixed remuneration of the CEO remains in turn at the same 2,179 million from last year and the variable at 2,672 million. In all cases, the collection of the variable depends on obtaining the strategic objectives to which it is linked financial and non-financial.

As a novelty, for the payment of the bonus This year the bank has set a target related to mobilizing sustainable financing, which will weigh 10% in the payment of the variable remuneration of executive directors.

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