Gold salaries on boards, armored directors and millionaire pensions: this is how inequality in companies becomes chronic | Business

In the year 14 after Christ, at the height of the Roman Empire, a member of the Senate received 37,975 sesterces, a figure that was equivalent to 100 times the average payroll of that time, according to research by the Global Price and Income History Group, a collective of academics belonging to the University of California. 2,000 years of civilization have passed since then and the human being has made innumerable advances in multiple fields. However, in the fight to correct wage inequality between the economic elite and workers, the room for improvement is still very high. In 2021, the best-paid executive directors of the Ibex 35 companies received an average of 4.21 million euros, an amount that is 75.95 times more than the 55,484 euros received by the employees of the companies they direct.

Far from being corrected, salary inequality in the large listed groups is becoming chronic, as confirmed by the tenth edition of the remuneration report that EL PAÍS exclusively prepares with the data sent by the companies to the National Securities Market Commission (CNMV). The 2021 gap is slightly lower than that of 2020 —then the difference between the first businessmen and their workers was 79.7 times—, but it must be taken into account that two years ago the two executive directors of Acciona received a total of 57 million thanks to a bonus that included the delivery of a winery from the Entrecanales family. Without this distorting factor, the wage gap in the year of the pandemic would have been 62 times.

In capitalist democracy, those who have the last word on whether company directors and managers generate enough value to justify the remuneration they receive are the shareholders. And these begin to emit signs of being fed up. In the meetings of the Ibex 35 companies that were held last year, the remuneration reports received an average opposition of 10.62% of the capital present or represented in the assembly, almost two percentage points more than the punishment votes of 2020 Advised by the proxy advisors or proxy advisor, the large investment and pension funds show their dissatisfaction with salaries on an increasing number of occasions. This is a slow burning trend – it began in 2012 with the so-called “shareholder spring” – but it is taking shape year after year. In fact, in the meetings that have been held in 2022, the rejection of the remuneration report in companies such as Telefónica, Banco Sabadell or BBVA, among others, has grown significantly.

The salary improvement goes by neighborhoods

In a hyperinflationary environment such as the current one, the employers’ association (CEOE) has rejected the latest proposal from the unions to cushion the impact of the rise in prices on the purchasing power of workers. With a CPI bordering on double-digit growth, the noble plants of companies seem to have more room to mitigate the bite of inflation. In 2021, the average salary of senior managers of the 102 listed companies analyzed was 654,689 euros, 11.57% more than a year earlier; In the case of the members of the board of directors, an average of 400,933 euros was distributed, 2.3% more, while the salary received by employees fell by 1.28%, standing at 53,085 euros.

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The best paid executive director of the Spanish Stock Exchange in 2021 was José Ignacio Sánchez Galán. The president of Iberdrola received 13.2 million euros, 8.2% more than a year before. Second place on the salary scale went to Pablo Isla, president of Inditex until March 31, who received a total of 12.44 million. And third place went to Ana Botín, president of Banco Santander, who between salary and pension earned 12.28 million. Santander is the one with the most directors in the top ten: Along with Botín, there are also the CEO, José Antonio Álvarez (9.7 million), and the head of the entity in Brazil, Sergio Rial (8.04 million). Completing the top 10 positions are the CEO of Cie Automotive, Jesús María Herrera (9.51 million); the president of Telefónica, José María Álvarez-Pallete (9.26 million); the president of Acciona, José Manuel Entrecanales (8.28 million); the CEO of Telefónica, Ángel Vilá (7.11 million), and the president of BBVA, Carlos Torres (7.09 million).

Within the general salary gap there is another additional one that women suffer and that is also far from being closed, since the directives access command positions with a dropper. In the Spanish Stock Exchange there were 89 directors who received between salary and pension more than one million euros and only four of them were women: the aforementioned Ana Botín, María José García Beato (Banco Sabadell), María Dolores Dancausa (Bankinter) and Cristina Ruiz (Indra).

The most unequal company from the salary point of view of the Spanish Stock Exchange last year was Cie Automotive. The salary of its CEO (9.51 million, thanks to the payment of a bonus) represents a difference of 559 times with respect to the average salary of the staff of this company specialized in components for automobiles. The remuneration gap at Inditex was also relevant: the former president of the textile giant received 12.44 million, 541 times more than the 23,000 euros that employees received on average. Another example of high inequality occurred in Saycr. Manuel Manrique, president of the construction and services group, received 6.46 million euros for all concepts, 240 times more than the 27,000 euros on average that his employees received.

Great harvest for top management

Members of senior management form, along with executive directors, the salary elite of companies. Unlike the presidents and CEOs, their names hardly appear in the headlines, but they are the ones who lead the key areas of the business and are paid in proportion to those responsibilities.

The 2021 harvest was especially good for the payroll of these professionals, which includes key positions such as financial directors, human resources managers, operational managers… In the Ibex 35, according to corporate governance reports, as of December 31, there were 409 members of senior management (ArcelorMittal is not included in this calculation, as it does not send the supervisor homogeneous information to the rest of the companies) and received an average remuneration of 1.06 million euros last year, 18% more than a year before. This significant rise in managers’ salaries has been driven by the distribution of bonuses and, in some cases, by the severance payments received by some professionals when they leave their posts.

The highest paid senior managers are those of Banco Santander. In 2021, the 15 professionals included in this category received an average of 3.59 million euros, an amount that represents an increase of 24% compared to the 2020 payroll. Very close to this figure is the one distributed by the 23 senior directors of Inditex. On average, the professionals of the textile group earned 3.44 million, 160% more than the 1.32 million they received a year ago. Also relevant were the remunerations received by the senior managers of Iberdrola (2.25 million), Telefónica (1.76 million) and BBVA (1.58 million). Although the best paid managers are found in Ibex companies, outside the selective index there are also high remunerations, such as those received by OHLA professionals, who earned an average of 1.44 million euros.

The piggy bank for the bankers’ pension

Until a decade ago, the practice of allocating part of the remuneration to directors’ retirement was almost exclusive to the financial sector. The banks argued that their executives did not have an ironclad clause in the event of dismissal and that long-term savings systems were a way of compensating for this absence. However, in recent years the formula of fattening the piggy bank of managers in the face of their retirement has been extended to almost all sectors represented on the Stock Exchange (which has not made them renounce millionaire settlements in case of dismissal) .

In the 2021 financial year, listed companies allocated just over 35 million euros to the savings systems of their executive directors. In total, the 102 companies analyzed by EL PAÍS had pension commitments with their current administrators worth 392 million euros as of December 31.

Despite the generalization of this form of remuneration, the banking sector continues to lead the piggy bank for directors’ retirement. At the end of last year, the five large listed entities (Banco Santander, BBVA, Banco Sabadell, Bankinter and CaixaBank) accumulated commitments (consolidated or not) from their directors and former directors for a value of 260 million euros. Of this figure, the largest amount corresponds to the two main entities: Banco Santander and BBVA. Santander, as recognized by the CNMV in its latest corporate governance report, accumulates 66.89 million for the pensions of its current directors and 49.77 million for former members of the administrative body. In the case of BBVA, it has recognized rights amounting to 24.54 and 69.28 million, respectively.

From an individual point of view, the director who accumulates a higher pension is the president of Banco Santander, Ana Botín, with 48.08 million. The second largest piggy bank for retirement is that of the president of ACS, Florentino Pérez, who accumulates rights worth 46.59 million. Also noteworthy are the contributions made for the retirement of the president of BBVA, Carlos Torres, totaling 24.55 million, and those of the former CEO of Banco Sabadell Jaime Guardiola, who after leaving the entity consolidated the accumulated rights, which reach total of 24.31 million. Other outstanding pensions are that of José Manuel Entrecanales (Acciona), valued at 23.57 million, and that of the CEO of Banco Santander, José Antonio Álvarez, of 18.82 million.

937 armored directors

In 2021 there were 937 executive directors and managers on the Spanish Stock Exchange, four less than a year earlier, with redundancy clauses that guarantee them two annual payments (the maximum recommended by Brussels and the CNMV), although there are some cases that go further in the caliber of those also known as golden parachutes. The latter is the case of the president of Iberdrola, who would be entitled to the equivalent of three annuities for dismissal plus another two for a non-competition agreement.

The company that acknowledges the most shielding in its corporate governance report is Repsol. The oil company has 225 people with this type of clause in their contract. The cases of Siemens Gamesa (with 89 people), BBVA (61 people), Dia (55) and Grifols (50) also stand out.

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