Banco Santander acts to protect your financial situation against the coronavirus. Despite the fact that the president of the bank, Ana Botín, recently downplayed the impact of Covid-19 on the results if the recovery was rapid, she should not have them all with her. The bank has announced that it is suspending its dividend against the 2020 financial year and that it cuts the fixed and variable salary of Botín itself and the CEO, José Antonio Álvarez, in half.
The bank has communicated its decision tonight to the National Securities Market Commission (CNMV) after a meeting of the board of directors that has analyzed the situation. The entity has waited for the closing of the New York Stock Exchange to make the announcement.
“Banco Santander’s board of directors has today made the decision to provide the bank with the greatest possible flexibility in order to increase credit and support the needs of companies and individuals affected by the coronavirus pandemic,” the bank said. “The board has stressed that the bank comfortably meets the capital requirements to maintain the dividend policy (payout of 40-50%) and is comfortable with the buffers it has with respect to the required regulatory minimums. However, has committed to reviewing the dividend to be paid in 2020 in order to have all the necessary resources to support companies and private customers who need it. Thus, the board has decided to consolidate a single final dividend, which will be submitted to the approval of the general meeting of shareholders in 2021. Therefore, in November 2020, no interim dividend payment will be made, “he adds.
In addition, the Banco Santander president, Ana Botín, and the CEO, José Antonio Álvarez, have decided to resign 50% of their compensation (fixed and variable) for 2020, while the compensation of non-executive directors will be reduced by 20 %. The Group Remuneration Committee and the corresponding bodies in each of the countries will propose to transfer this commitment to the rest of the management teams in the markets in which Santander operates. “The bonus policy will be reviewed to ensure that as many resources as possible are devoted to helping our customers,” says the bank.
Santander has created a fund to provide essential equipment and materials that will be financed with the reduction in the remuneration of the board and senior management of the group and with voluntary contributions from the bank’s employees. It is expected to be constituted with an amount of at least 25 million euros. The contributions will be used to cover immediate needs, such as the production and acquisition of medical equipment, protective clothing and other equipment that are necessary to treat patients infected with the virus, as well as making donations to the corresponding authorities and institutions.
In its statement, Santander includes a statement by Ana Botín: “For many of us, the coronavirus pandemic is the most important challenge that we have faced in our lives. The magnitude of the task ahead requires a huge collective effort, in which governments, central banks and other authorities, the private sector, charities and individuals work together to limit the spread and provide care to those affected, either directly or indirectly. Difficult months await us, but I am confident in our ability as a society to overcome it and the bank will live up to it. ”
Santander had previously announced other decisions also taken by the council. Thus, the bank has decided to move the general meeting of shareholders to Madrid and that it be held without the physical assistance of the partners, who may only participate electronically, and also will not do an ERTE in Spain for the coronavirus.