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Telefónica carries out the report on the remuneration of its directors with a rejection of 42.9% | Economy

The shareholders of Telefónica -which has 9.4% of the shares of PRISA- have given a flat approval to the report on the millionaire remuneration received by the directors of the company in 2021. Only 53.3% of the shareholders represented in The General Meeting that took place on the 8th voted in favor of the tenth item on the agenda regarding the remuneration of the directors. 42.9% voted against and another 3.8% abstained. A strong rejection if one takes into account that the rest of the points put to the vote were approved by more than 99% of the votes.

The main reason for this rejection was the plan by which a group of 156 managers shared an extraordinary bonus of 22.6 million euros in 2021 for the achievement of various operations such as the merger of O2 with Virgin Media in the United Kingdom, the sale of the Telxius towers to American Tower and the fulfillment of other strategic objectives. Asked about this by this newspaper, a spokesman for Telefónica declined to make any comment.

The president of the company, José María Álvarez-Pallete, was the main beneficiary because he received 1.92 million for this concept (8% of the total plan) while the CEO, Ángel Vila, received 1.6 million (7 % of the total).

Pallete’s compensation for all concepts in 2021 amounted to 8,725 million, including the 1.9 million of that extraordinary bonus, compared to the 5.19 million he earned the previous year. It is the highest remuneration for him since he assumed the presidency of Telefónica. Of the total, 1.9 million correspond to his fixed salary, which has not changed since 2016 and will not change in 2022. Another 3.8 million are short-term variable remuneration, which the previous year was 3.1 millions. As a long-term incentive he received 0.9 million shares.

The previous year, Pallete renounced the 0.6 million in shares that would have corresponded to him, “as a gesture of responsibility after the effects of covid-19”, as explained by the company. Added to this are the 1.9 million extraordinary variable remuneration already mentioned. In addition, he received 132,000 euros in contributions to savings systems and 37,000 euros in insurance premiums. If the long-term incentive that he did not receive is added to last year’s remuneration and the extraordinary bonus that he has received is subtracted from this year’s, the rise would be 15.7%. If what is actually earned each year is taken into account, the increase is 68%. In the remuneration report, the telecommunications company indicated that Pallete renounced the payment of 240,000 euros as chairman of the board of directors and 80,000 euros as chairman of the executive committee. Telefónica contributed another 541,000 euros in savings systems that do not count in the total of 8.7 million because they are not consolidated, with which it accumulates 10.6 million in said plan.

In turn, the CEO, Ángel Vilá, received 6.62 million euros, compared to 3.87 million the previous year. Of this amount, 1.6 million are for salary, a stable amount compared to previous years; 2.64 million in variable remuneration, 668,000 euros of long-term incentive in shares (the previous year he also renounced it) and 1.6 million for the aforementioned extraordinary bonus.

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The remuneration received by the board of directors of Telefónica as a whole in 2021 amounted to 16.6 million euros, compared to the 12.06 million they received a year earlier. Among the directors, Javier de Paz received 572,000 euros, 495,000 euros from Javier Echenique, 302,000 from José María Abril, 283,000 from Peter Erskine and 280,000 from Isidro Fainé.

It is not the first time that the shareholders of Telefonica have rebelled against the high remuneration of the directors. Already under the presidency of César Alierta, 34% of the shareholders voted against the remuneration of the board in 2014. Telefónica announced that in order to guarantee that a greater number of employees benefit from the good performance of the company, it will propose to the next general meeting of shareholders the launch of a new global share plan to reach an even higher percentage of employees, which currently reaches 25% of the Telefónica workforce. This extension of benefits for employees will take place in all countries where the company is present, and regardless of their category and responsibility, according to the company.

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