53. Remuneration and other benefits of the Board of Directors and Members of the Bank’s Management Committee
- Remuneration of non-executive directors received in 2014
The cash remuneration paid to the non-executive members of the Board of Directors during 2014 is indicated below. The figures are given individually for each non-executive director and itemised:
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Thousands of Euros | ||||||
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| Non-Executive Director remuneration | Board of Directors | Executive Committee | Audit & Compliance Committee | Risks Committee | Remuneration Committee | Appointments Committee | Total |
| Tomás Alfaro Drake | 129 | - | 71 | - | 21 | 102 | 323 |
| 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 |
| Lourdes Máiz Carro (2) | 107 | - | - | - | - | - | 107 |
| José Maldonado Ramos | 129 | 167 | - | - | 43 | 41 | 379 |
| José Luis Palao García-Suelto | 129 | - | 179 | 107 | - | 20 | 435 |
| Juan Pi Llorens | 129 | - | - | 107 | 43 | - | 278 |
| Susana Rodríguez Vidarte | 129 | 167 | - | 53 | 21 | 41 | 411 |
| Total (3) | 1,395 | 500 | 464 | 588 | 278 | 244 | 3,469 |
Moreover, in 2014, €117 thousand were paid in health and casualty insurance premiums for non-executive members of the Board of Directors.
- Remuneration of executive directors received in 2014
The remuneration paid to the executive directors during 2014 is indicated below. The figures are given individually for each executive director and itemised:
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Thousands of Euros | ||||||
|---|---|---|---|---|---|---|---|
| Executive Director remuneration | Fixed Remuneration |
2013 Annual Variable Remuneration in cash (1) |
Deferred Variable Remuneration in cash (2) |
Total Cash |
2013 Annual Variable Remuneration in BBVA Shares (1) |
Deferred Variable Remuneration in BBVA Shares (2) |
Total Shares |
| Chairman and CEO | 1,966 | 797 | 682 | 3,445 | 88,670 | 122,989 | 211,659 |
| President and COO | 1,748 | 495 | 432 | 2,675 | 55,066 | 84,995 | 140,061 |
| José Manuel González-Páramo Martínez-Murillo | 800 | 48 | - | 848 | 5,304 | - | 5,304 |
| Total | 4,514 | 1,340 | 1,114 | 6,968 | 149,040 | 207,984 | 357,024 |
Moreover, the executive directors have received during 2014 benefits in kind and other remuneration for a total amount of €54,196; of which €13,527 correspond to the Chairman and CEO, €25,971 to the President and COO and €14,698 to Mr. José Manuel González- Páramo Martinez-Murillo.
The executive directors’ remuneration, that correspond to the model that apply to the management team of BBVA, is composed by a fix remuneration and a variable remuneration, constituted by an ordinary variable cash remuneration and a variable remuneration share-based incentive for the management team of the BBVA Group. (the "Annual Variable Remuneration").
During 2014, the executive directors have received the amount of the fixed remuneration corresponding to the year and the variable remuneration to be payable this year, to which they are entitled under the settlement and payment system resolved by the General Meeting (the "Settlement and 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 2014 executive directors have received the following variable remuneration:
1. Annual Variable Remuneration for year 2013
The amount corresponding to the 50% of the Annual Variable Remuneration (in cash and in shares) corresponding to 2013, as indicated in the chart above. The remaining 50% of the Annual Variable Remuneration for 2013 that has been deferred under the Settlement and Payment System will be paid, subject to the conditions described above, in thirds during the first quarter of 2015, 2016 and 2017, such that under this item the Chairman and CEO will receive €265,713 and 29,557 BBVA shares, the President and COO will receive €165,012 and 18,356 BBVA shares and Mr. José Manuel González-Páramo will receive €15,894 and 1,768 shares.
(*) Mr. José Manuel González-Páramo Martínez-Murillo was appointed executive director of BBVA by agreement of the Board of Directors on May 29, 2013, being his Annual Variable Remuneration for 2013 proportional to the time he has been on the charge.2. Deferred parts of the Variable Remuneration from previous years paid in 2014:
The Chairman & CEO and the President & COO, in application of the Settlement & Payment System, have received the following variable remuneration during 2014:
- Annual Variable Remuneration for the year 2012
The amount corresponding to the first third of the deferred Annual Variable Remuneration of 2012, both in cash and in shares, receiving, after the pertinent adjustments, the amount of €273,902 and 36,163 shares in the case of the Chairman and CEO, and €166,877 and 22,032 shares in the case of the President and COO.
The remaining two thirds of the deferred Annual Variable Remuneration corresponding to 2012 will be paid during the first quarter of 2015 and 2016, subject to the aforementioned conditions.
- Annual Variable Remuneration for the year 2011
The amount corresponding to the second third of the deferred Annual Variable Remuneration of 2011, both in cash and in shares, receiving, after the pertinent adjustments, the amount of €381,871 and 51,826 shares in the case of the Chairman and CEO, and €242,883 and 32,963 shares in the case of the President and COO.
The remaining third of the Annual Variable Remuneration corresponding to 2011 will be paid, during the first quarter of 2015, subject to the conditions mentioned above.
- Multi-Year Variable Share Remuneration Programme for 2010-2011 ("LTI 2010-2011”)
Lastly, the Chairman and CEO and the President and COO have received during 2014 the second third of the shares resulting from the settlement of the LTI 2010-2011 that were deferred, for which the Chairman and 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 €25,795 and the President and COO €22,110, being deferred until the first semester of 2015 the payment, under the aforementioned conditions, of the remaining third resulting from the settlement of the LTI 2010-2011.
- Annual Variable Remuneration of executive directors for the year 2014
Following year-end 2014, 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 2015 the executive directors will receive 50% of this remuneration, i.e., €865,644 and 112,174 BBVA shares for the Chairman & CEO; €530,169 and 68,702 BBVA shares for the President & COO; and €85,199 and 11,041 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 (2016, 2017 and 2018) the Chairman & CEO will receive the amount of €288,548 and 37,392 BBVA shares; the President & COO will receive €176,723 and 22,901 BBVA shares; and José Manuel González-Páramo Martínez-Murillo will receive €28,400 and 3,681 BBVA shares.
The payment of the deferred parts of the 2014 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 December 31, 2014.
- Remuneration of the members of the Management Committee received in 2014(*)
During 2014, the remuneration paid to the members of the BBVA Management Committee as a whole, excluding the executive directors, amounted to €8,764 thousand corresponding to fixed remuneration plus the variable remuneration indicated below, pursuant to the Settlement and Payment System described above:
(*) This section includes aggregated information for the non-executive members of the Board of Directors as of December 31, 2014 (13 members)1. Annual Variable Remuneration for year 2013
A total amount of €2,734 thousand and 304,579 BBVA shares, that corresponds to the part of the Annual Variable Remuneration of 2013 under the Settlement and Payment System applicable to each member of the Management Committee.
The remaining part of the deferred Annual Variable Remuneration for 2013 will be paid, subject to the conditions described above, in thirds during the first quarter of 2015, 2016 and 2017, such that under this item, this group as a whole will receive the amount of €911 thousand (*) and 101,098 BBVA shares each year.
(*) According to the average exchange rate as of December 31, 20142. Deferred parts of the Variable Remuneration from previous years
- Annual Variable Remuneration for 2012
The first third of the deferred Annual Variable Remuneration of 2012, corresponding for this item, after its updates, the amount of €765 thousand and 101,407 shares.
The remaining Annual Variable Remuneration corresponding to 2012 for this group has been deferred and will be payable in thirds during the first quarter of 2015 and 2016, under the conditions described above.
- Annual Variable Remuneration for 2011
The second third of the deferred Annual Variable Remuneration of 2011, corresponding for this item, after its updates, the amount of €989 thousand and 134,618 shares.
The remaining Annual Variable Remuneration corresponding to 2011 for this group has been deferred and will be payable during the first quarter of 2015, under the conditions described above.
- Multi-Year Variable Share Remuneration Programme for 2010-2011 (“LTI 2010-2011”).
The second third of the shares resulting from the settlement of the LTI 2010-2011 that were deferred, corresponding under this item a total of 89,998 shares for the Management Committee as a whole. A further €66 thousand was paid corresponding to the adjustment of these deferred vested shares.
The remaining two third of the deferred shares resulting from the settlement of the LTI 2010-2011 for these members will be paid during the first quarter of 2015, under the conditions described above.
Finally, in 2014, members of the BBVA Management Committee as a whole, excluding executive directors, received remuneration in kind amounting to a total of €1,084 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 2014 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 2013, are as follows:
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Theoretical shares allocated in 2014 |
Theoretical shares accumulated at December 31, 2014 |
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| Tomás Alfaro Drake | 6,693 | 43,159 |
| Ramón Bustamante y de la Mora | 6,807 | 69,512 |
| José Antonio Fernández Rivero | 8,497 | 69,013 |
| Ignacio Ferrero Jordi | 7,500 | 74,702 |
| Belén Garijo López | 4,437 | 7,957 |
| Carlos Loring Martínez de Irujo | 6,811 | 57,307 |
| José Maldonado Ramos | 8,402 | 36,268 |
| José Luis Palao García-Suelto | 9,181 | 29,658 |
| Juan Pi Llorens | 6,174 | 16,365 |
| Susana Rodríguez Vidarte | 6,817 | 53,919 |
| Total (1) | 71,319 | 457,860 |
- Pensions commitments
The provisions recorded as of December 31, 2014 to cover pension commitments for executive directors amount to €26,026 thousand in the case of the President and COO and €269 thousand in the case of José Manuel González-Páramo Martínez-Murillo. €2,624 thousand and €261 thousand were set aside in 2014 for the President and 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 December 31, 2014 for pension commitments for the members of the Management Committee, excluding executive directors, amounted to €89,817 thousand, of which, €8,649 thousand were provisioned during 2014.
- 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.