56. Remuneration and other benefits of the Board of Directors and Members of the Bank’s Management Committee
- Remuneration of non-executive directors received in 2013
The cash remuneration paid to the non-executive members of the Board of Directors during 2013 is indicated below. The figures are given individually for each non-executive director and itemised:
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| Non-Executive Director remuneration | Thousands of Euros | ||||||
|---|---|---|---|---|---|---|---|
| Board of Directors | Executive Committee | Audit & Compliance Committee | Risks Committee | Appointments Committee | Remuneration Committee | Total | |
| Tomás Alfaro Drake | 129 | - | 71 | - | 102 | - | 302 |
| Juan Carlos Álvarez Mezquíriz | 129 | 167 | - | - | 41 | - | 336 |
| Ramón Bustamante y de la Mora | 129 | - | 71 | 107 | - | - | 307 |
| José Antonio Fernández Rivero (1) | 129 | - | - | 214 | 41 | - | 383 |
| Ignacio Ferrero Jordi | 129 | 167 | - | - | - | 43 | 338 |
| Belén Garijo López | 129 | - | 71 | - | - | - | 200 |
| Carlos Loring Martínez de Irujo | 129 | - | 71 | - | - | 107 | 307 |
| José Maldonado Ramos | 129 | 167 | - | - | 41 | 43 | 379 |
| José Luis Palao García-Suelto | 129 | - | 179 | 107 | - | - | 414 |
| Juan Pi Llorens | 129 | - | - | 107 | - | 43 | 278 |
| Susana Rodríguez Vidarte (2) | 129 | 42 | 54 | - | 41 | 43 | 308 |
| Total (3) | 1,416 | 542 | 518 | 534 | 265 | 278 | 3,553 |
Moreover, in 2013, €132 thousand were paid in insurance premiums for non-executive members of the Board of Directors.
- Remuneration of executive directors received in 2013
The remuneration paid to the executive directors during 2013 is indicated below. The figures are given individually for each executive director and itemised:
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| Executive Director remuneration | Thousands of Euros | ||||||
|---|---|---|---|---|---|---|---|
| Fixed Remuneration |
2012 Annual Variable Remuneration in cash (1) |
Deferred Variable Remuneration in cash (2) |
Total Cash |
2012 Annual Variable Remuneration in BBVA Shares |
Deferred Variable Remuneration in BBVA Shares (3) |
Total Shares |
|
| Chairman and CEO | 1,966 | 785 | 379 | 3,130 | 108,489 | 86,826 | 195,315 |
| President and COO | 1,748 | 478 | 244 | 2,470 | 66,098 | 62,963 | 129,061 |
| José Manuel González-Páramo Martínez-Murillo (*) | 469 | - | - | 469 | - | - | - |
| Total | 4,183 | 1,263 | 623 | 6,069 | 174,587 | 149,789 | 324,376 |
The Annual Variable Remuneration of the executive directors comprises an ordinary variable remuneration in cash and a variable remuneration in shares based on the BBVA Group Management Team Incentive.
Moreover, during 2013 executive directors have received remuneration in kind and other remuneration amounting to a total joint sum of €37 thousand, of which €13 thousand correspond to the Chairman & CEO, €23 thousand to the President & COO and €1 thousand to José Manuel González-Páramo Martínez-Murillo.
During 2013, the executive directors have received the amount of the fixed remuneration corresponding to the year and, in the case of the Chairman & CEO and the President & COO, the variable remuneration for 2012 to which they are entitled under the settlement and payment system resolved by the General Meeting (the "Settlement & Payment System"), which determines that:
- At least 50% of the total Annual Variable Remuneration shall be paid in BBVA shares.
- The payment of 50% of the Annual Variable Remuneration shall be deferred in time, the deferred amount being paid in thirds over the three-year period following its settlement.
- All the shares vesting to these beneficiaries pursuant to the rules explained in the previous paragraph may not be availed during a period of one year after they have vested. This withholding will be applied against the net amount of the shares, after discounting the necessary part to pay the tax accruing on the shares received.
- Moreover, cases have been established in which the payment of the deferred Annual Variable Remuneration payable may be limited or impeded (malus clauses), and
- The deferred parts of the Annual Variable Remuneration will be adjusted to update them in the terms established by the Board of Directors.
Thus, during 2013 the Chairman & CEO and the President & COO have received the following variable remuneration:
- Annual Variable Remuneration for year 2012
During 2013 the Chairman & CEO and the President & COO have received 50% of the Annual Variable Remuneration (in cash and in shares) corresponding to 2012, as indicated in the chart above.
The other 50% of the Annual Variable Remuneration for 2012 that has been deferred under the Settlement & Payment System will be paid, subject to the conditions described above, in thirds during the first quarter of 2014, 2015 and 2016, such that under this item the Chairman & CEO will receive €261,676 and 36,163 BBVA shares and the President & COO will receive €159,428 and 22,032 BBVA shares.
- Deferred parts of the Variable Remuneration from previous years:
During 2013 the Chairman & CEO and the President & COO, in application of the Settlement & Payment System, have received the following variable remuneration:
- Annual Variable Remuneration for year 2011
During 2013 the Chairman & CEO and the President & COO, in application of the Settlement & Payment System, have received the first third of the 50% of their Annual Variable Remuneration, both in cash and in shares, corresponding to 2011, which was deferred to be paid during the first quarter of 2013. Under this item, after the corresponding adjustment, the Chairman & CEO received €364,519 and 51,826 shares and the President & COO received €231,847 and 32,963 shares.
The other two thirds of the 50% of the Annual Variable Remuneration corresponding to 2011 will be paid, respectively, during the first quarter of 2014 and 2015, subject to the conditions mentioned above.
- Multi-Year Variable Share Remuneration Programme for 2010-2011 ("LTI 2010-2011”)
Likewise, in application of the Settlement & Payment System for the LTI 2010-2011 approved by the General Meeting, 12th March 2010, during 2013 the Chairman & CEO and the President & COO have received under this item the first third of the 50% of the shares resulting from the settlement of the LTI 2010-2011 that were deferred, for which the Chairman & CEO received 35,000 shares and the President & COO 30,000 shares; and the cash amount resulting from the adjustment for the updated value of these deferred shares, for which the Chairman & CEO received €14,595 and the President & COO €12,510. The payments, under the aforementioned conditions, of the remaining two thirds resulting from the settlement of the Programme are deferred until the first quarter of 2014 and 2015.
- Annual Variable Remuneration of executive directors for year 2013
Following year-end 2013, the Annual Variable Remuneration for the executive directors corresponding to that year has been determined, applying the conditions established for that purpose by the General Meeting. Consequently, during the first quarter of 2014 the executive directors will receive 50% of this remuneration, ie, €797,139 and 88,670 BBVA shares for the Chairman & CEO; €495,037 and 55,066 BBVA shares for the President & COO; and €47,683 and 5,304 BBVA shares for José Manuel González-Páramo Martínez-Murillo (*). The remaining 50% of the Annual Variable Remuneration will be deferred over a three-year period, such that during the first quarter of each year (2015, 2016 and 2017) the Chairman & CEO will receive the amount of €265,713 and 29,557 BBVA shares; the President & COO will receive €165,012 and 18,356 BBVA shares; and José Manuel González-Páramo Martínez-Murillo will receive €15,894 and 1,768 BBVA shares.
(*) José Manuel González-Páramo Martínez-Murillo was appointed as a BBVA director under a Board of Directors resolution, 29th May 2013. His Annual Variable Remuneration for 2013 is proportional to the number of months during which he has held this position.The payment of the deferred parts of the 2013 Annual Variable Remuneration will be subject to the conditions of the Settlement & Payment System established pursuant to the resolutions adopted by the General Meeting.
These amounts are recorded under the item “Other Liabilities - Accrued interest” of the consolidated balance sheet at 31st December 2013.
- Remuneration of the members of the Management Committee received in 2013
During 2013, the remuneration paid to the members of the BBVA Management Committee as a whole, excluding the executive directors, amounted to €9,122 thousand corresponding to fixed remuneration plus the variable remuneration indicated below, pursuant to the Settlement & Payment System described above:
- Annual Variable Remuneration for year 2012
During 2013, members of the BBVA Management Committee as a whole, excluding the executive directors, received a total amount of €2,597 thousand and 344,460 BBVA shares corresponding to them under the Settlement & Payment System, corresponding to the Annual Variable Remuneration for 2012.
The deferred part of the Annual Variable Remuneration for 2012 will be paid, subject to the conditions described above, in thirds during the first quarter of 2014, 2015 and 2016, such that under this item, this group as a whole will receive the amount of €814 thousand (*) and 112,437 BBVA shares each year.
(*) According to the average exchange rate in force at 31st December 2013.- Deferred parts of the Variable Remuneration from previous years
- Annual Variable Remuneration for 2011
During 2013, payment was made of the deferred part of the Annual Variable Remuneration corresponding to 2011 to the members of the Management Committee. As a consequence, under this item in 2013, the members of the Management Committee as a whole, after its corresponding adjustment, received the amount of €1,046thousand and 149,850 BBVA shares.
The remaining Annual Variable Remuneration corresponding to 2011 for this group has been deferred and will be payable in thirds during the first quarter of 2014 and 2015, under the conditions described above.
- Multi-Year Variable Share Remuneration Programme for 2010-2011 (“LTI 2010-2011”).
Moreover, in application of the Settlement & Payment System, in 2013 the members of the Management Committee as a whole have received the shares resulting from the settlement of the LTI 2010-2011 that were deferred for payment during said year. These amounted to a total of 98,665 shares for the Management Committee as a whole. A further €41 thousand was paid corresponding to the adjustment of these deferred vested shares.
The payment of the remaining two thirds of the deferred shares resulting from the settlement of the Programme corresponding to the members of the Management Committee as a whole has been deferred and will vest in the first quarters of 2014 and 2015, under the conditions described above.
Finally, in 2013 members of the BBVA Management Committee as a whole, excluding executive directors, received remuneration in kind amounting to a total of €799 thousand.
- System of Remuneration in Shares with Deferred Delivery for non-executive directors
BBVA has a remuneration system in shares with deferred delivery for its non-executive directors, which was approved by the General Meeting, 18th March 2006 and extended for an additional 5-year period under a resolution of the General Meeting, 11th March 2011.
This System is based on the annual allocation to non-executive directors of a number of "theoretical shares", equivalent to 20% of the total remuneration in cash received by each of them in the previous year, according to the average closing prices of the BBVA share during the sixty trading sessions prior to the Annual General Meeting approving the corresponding financial statements for each year.
These shares, where applicable, will be delivered to each beneficiary on the date they leave the position as director for any reason other than dereliction of duty.
The number of "theoretical shares" allocated to the non-executive directors in 2013 who are beneficiaries of the system of deferred delivery of shares, corresponding to 20% of the total remuneration in cash received by said directors during 2012, are as follows:
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|
|
Theoretical shares allocated in 2013 |
Theoretical shares accumulated at December 31, 2013 |
|---|---|---|
| Tomás Alfaro Drake | 8,107 | 36,466 |
| Juan Carlos Álvarez Mezquíriz | 9,028 | 66,562 |
| Ramón Bustamante y de la Mora | 8,245 | 62,705 |
| José Antonio Fernández Rivero | 10,292 | 60,516 |
| Ignacio Ferrero Jordi | 9,085 | 67,202 |
| Belén Garijo López | 3,520 | 3,520 |
| Carlos Loring Martínez de Irujo | 8,251 | 50,496 |
| José Maldonado Ramos | 10,178 | 27,866 |
| Jose Luis Palao García-Suelto | 11,122 | 20,477 |
| Juan Pi Llorens | 7,479 | 10,191 |
| Susana Rodríguez Vidarte | 7,618 | 47,102 |
| Total (1) | 92,925 | 453,103 |
- Pensions commitments
The provisions recorded at 31st December 2013 to cover pension commitments for executive directors amount to €23,611 thousand in the case of the President & COO and €98 thousand in the case of José Manuel González-Páramo Martínez-Murillo. €1,070 thousand and €131 thousand were set aside in 2013 for the President & COO and for José Manuel González-Páramo Martínez-Murillo, respectively, to cover the contingencies of retirement, disability and death.
There are no other pension obligations in favour of other executive directors.
The provisions charged to 31st December 2013 for pension commitments for the members of the Management Committee, excluding executive directors, amounted to €91,129 thousand, of which, €8,697 thousand were provisioned during 2013.
- Extinction of contractual relationship.
The Bank does not have any commitments to pay severance indemnity to executive directors other than the commitment in respect of José Manuel González-Páramo Martinez-Murillo who is contractually entitled to receive an indemnity equivalent to twice his fixed remuneration should he cease to hold his position on grounds other than his own will, death, retirement, disability or dereliction of duty.
The contractual conditions of the President & COO determine that should he cease to hold his position for any reason other than his own will, retirement, disability or dereliction of duty, he will be given early retirement with a pension payable, as he chooses, through a lifelong annuity pension, or by payment of a lump sum that will be 75% of his pensionable salary should this occur before he is 55, and 85% should it occur after he has reached said age.