56. Remuneration and other benefits of the Board of Directors and Members of the Bank’s Management Committee
- Remuneration of non-executive directors
The remuneration paid to non-executive directors who were members of the Board of Directors during 2012 is indicated below, broken down by type of remuneration:
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| Remuneration of Non-Executive Directors | Thousands of Euros | ||||||
|---|---|---|---|---|---|---|---|
| Board of Directors | Executive Committee | Audit Committee | Risk Committee Risk Committee | Appointments Committee | Compensation 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 (2) | 107 | - | 24 | - | - | - | 131 |
| Carlos Loring Martinez de Irujo | 129 | - | 71 | - | - | 107 | 307 |
| José Maldonado Ramos | 129 | 167 | - | - | 41 | 43 | 379 |
| Enrique Medina Fernández | 129 | 167 | - | 107 | - | - | 402 |
| Jose Luis Palao García-Suelto | 129 | - | 179 | 107 | - | - | 414 |
| Juan Pi Llorens | 129 | - | - | 107 | - | 43 | 278 |
| Susana Rodríguez Vidarte | 129 | - | 71 | - | 41 | 43 | 284 |
| Total | 1,523 | 667 | 488 | 642 | 265 | 278 | 3,863 |
- Remuneration of executive directors
The remuneration paid to executive directors of the Bank in 2012 is indicated below, broken down by type of remuneration:
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| Remuneration of Executive Directors | Thousands of Euros | |||
|---|---|---|---|---|
| Fixed Remuneration | Variable Remuneration (1) | Total Cash (2) |
Variable Remuneration in BBVA Shares (1) | |
| Chairman and CEO | 1,966 | 1,000 | 2,966 | 155,479 |
| President and COO | 1,748 | 636 | 2,384 | 98,890 |
| Total | 3,714 | 1,636 | 5,350 | 254,369 |
In 2012 the executive directors received the fixed remuneration corresponding to that year and 50% of the Annual Variable Remuneration in cash and shares for 2011, under the settlement and payment system agreed by the AGM held on March 11, 2011.
This settlement and payment system for the Annual Variable Remuneration (“Settlement and Payment System”) is applied to all categories of employees who carry out professional activities with a material impact on the Bank’s risk profile or who perform control functions. It also establishes the following conditions for executive directors and other members of the Management Committee:
- At least 50% of the total Annual Variable Remuneration shall be paid in BBVA shares.
- Payment of 50% of the variable remuneration, in both cash and shares, shall be deferred, with the deferred amount being paid over a period of three years.
- All shares awarded under the aforementioned rules shall not be available for one year from their award. This restriction shall be applied on the net value of the shares, after deducting the part necessary for the beneficiaries to meet their tax liabilities on the shares received.
- In addition, under certain circumstances payment of the Annual Variable Remuneration that is deferred and pending payment may be limited or even stopped, and it has been decided to update these deferred amounts.
- Deferred part of the Variable Remuneration for 2011
Under the Settlement and Payment System, payment of the remaining 50% of the Annual Variable Remuneration of the executive directors for 2011 has been deferred for a 3-year period, to be paid out in thirds during the first quarter of 2013, 2014 and 2015, under the aforementioned conditions. As a result, after the corresponding update, on 2013 the executive directors will be paid €364,519 and 51,826 shares in the case of the Chairman and CEO, and €231,848 and 32,963 shares in the case of the President and COO. Payment of the remaining two-thirds of the deferred part of the Variable Remuneration for 2011 has been deferred until the first quarter of 2014 and 2015, each third representing an amount of €333,244 and 51,826 BBVA shares in the case of the Chairman and CEO, and €211,955 and 32,963 BBVA shares in the case of the President and COO.
- Annual Variable Remuneration for 2012
At the close of 2012, the Annual Variable Remuneration for the executive directors corresponding to that year has been determined by applying the conditions established by the AGM. Thus, in the first quarter of 2013, the executive directors will receive 50% of this remuneration, amounting to €785,028 and 108,489 BBVA shares in the case of the Chairman and CEO and €478,283 and 66,098 BBVA shares in the case of the President and COO. Payment of the remaining 50% has been deferred for a 3-year period. In the first quarter of 2014, 2015 and 2016, the Chairman and CEO will be paid €261,676 and 36,163 BBVA shares, while the President and COO will receive €159,428 and 22,032 BBVA shares.
Payment of the deferred part of the Annual Variable Remuneration for 2012 is subject to the conditions set out in the Settlement and Payment System established in accordance with the resolution adopted by the AGM.
As of December 31, 2012, these amounts were recognized under the heading “Other liabilities - Accrued interest” of the consolidated balance sheet.
- Remuneration of the members of the Management Committee (*)
The remuneration paid in 2012 to the members of BBVA’s Management Committee amounted to a total of €8,563 in fixed remuneration and €3,142thousand and 485.207 BBVA shares in variable remuneration.
In addition, the members of the Management Committee received remuneration in kind and other items totaling €729 thousand, in 2012.
The amounts received as variable remuneration in 2012 amount to 50% of the Annual Variable Remuneration for 2011 for this group, under the Settlement and Payment System approved by the AGM in March 2011.
Payment of the remaining 50% of the Annual Variable Remuneration for 2011 has been deferred for a 3-year period, to be paid out in thirds during the first quarter of 2013, 2014 and 2015, under the aforementioned conditions. As a result, after the corresponding update, in 2013 the members of the Management Committee as a whole will be paid €1,120thousand and 158,214 BBVA shares. Payment of the remaining two-thirds of the deferred part of the Variable Remuneration for 2011 has been deferred until the first quarter of 2014 and 2015, each third representing the amount of €1,024 thousand and 158,214 BBVA shares.
(*) This section includes aggregate information on the members of the Management Committee who held this position as of December 31, 2012 ( 13 members, including the deferments pending for the members of the Management Committee who joined in 2012 ), excluding the executive directors.- Multi-Year Variable Share-Based Remuneration Program for 2010-2011
Under the Settlement and Payment System agreed by the 2012 AGM for the Multi-Year Variable Share-Based Remuneration Program for 2010-2011 (hereinafter “the Program” or “2010-2011 ILP”) approved by the AGM on March 12, 2010, in 2012 the executive directors and remaining members of the Management Committee received 50% of the shares due to them under the settlement of the Program, i.e. 105,000 BBVA shares for the Chairman and CEO, 90,000 BBVA shares for the President and COO and 329,000 shares for all the remaining members of the Management Committee.
The remaining 50% of the shares resulting from the settlement of the “2010-2011 ILP” corresponding to the executive directors and the rest of the members of the Management Committee have been deferred, to be paid out in thirds in 2013, 2014 and 2015. As a result, in 2013 the executive directors will be paid as follows: 35,000 shares for the Chairman and CEO and 30,000 shares for the President and COO, in addition to an amount in cash of €15 thousand in the case of the Chairman and CEO and €13,000 in the case of the President and COO as a result of the update. Delivery of the remaining two-thirds of the deferred part of the 2010-2011 ILP has been deferred, so that the Chairman and CEO will be paid 35,000 shares and the President and COO will receive 30,000 shares in the first quarter of 2014 and 2015.
The rest of the members of the Management Committee will receive 106,998 shares in 2013, in addition to €45 thousand resulting from the corresponding update. Delivery to this group of the remaining two-thirds of the deferred shares for 2014 and 2015 has been deferred.
- Scheme for remuneration for non-executive directors with deferred distribution of shares
BBVA has a remuneration system with deferred distribution of shares in place for its non-executive directors that was approved by the AGM held on March 18, 2006 and renewed for an additional 5-year period through a resolution of the AGM held on March 11, 2011.
This system consists in the annual allocation of a number of “theoretical shares” to the non-executive directors equivalent to 20% of the total remuneration received by each in the previous year. This is based on the average closing prices of the BBVA shares during the sixty trading sessions prior to the dates of the ordinary general meetings approving the annual financial statements for each year.
The shares will be delivered to each beneficiary, as appropriate, on the date he or she leaves the position of director for any reason except serious breach of duties.
The number of “theoretical shares” allocated in 2012 to the non-executive directors who are beneficiaries of the deferred share distribution system, corresponding to 20% of the total remuneration received by each in 2011, is as follows:
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|
|
Theoretical Shares assigned in 2012 |
Accumulated Theoretical Shares as of December 31, 2012 |
|---|---|---|
| Tomás Alfaro Drake | 8,987 | 28,359 |
| Juan Carlos Álvarez Mezquíriz | 10,061 | 57,534 |
| Ramón Bustamante y de la Mora | 9,141 | 54,460 |
| José Antonio Fernández Rivero | 11,410 | 50,224 |
| Ignacio Ferrero Jordi | 10,072 | 58,117 |
| Carlos Loring Martínez de Irujo | 9,147 | 42,245 |
| José Maldonado Ramos | 10,955 | 17,688 |
| Enrique Medina Fernández | 11,979 | 73,293 |
| Jose Luis Palao García-Suelto | 9,355 | 9,355 |
| Juan Pi Llorens | 2,712 | 2,712 |
| Susana Rodríguez Vidarte | 8,445 | 39,484 |
| Total | 102,264 | 433,471 |
- Pension commitments
Under rule 78 of IAS 19, at the close of 2012 the situation in the high-quality corporate bond markets required an update of the interest rates used by the entities to discount post-employment benefits. Without changing the commitments assumed by the Bank, this has resulted in an increase in the amount of the provisions needed to cover them and the amounts to be provisioned in 2012.
Thus, the provisions registered as of December 31, 2012 for pension commitments to the President and COO amount to €22,703 thousand. Of this amount, under current accounting regulations, €1,701 have been provisioned in 2012 against earnings and €4,307 thousand against equity in order to adapt the interest rate assumption used for the valuation of pension commitments in Spain. As of that date there are no further pension commitments with the executive directors.
As for the rest of the members of the Management Committee, the provisions registered as of December 31, 2012 for pension commitments amount to €80,602 thousand. Of this amount, under current accounting regulations, €13,077 thousand have been charged in 2012 against earnings and €17,347 thousand against equity in order to adapt the aforementioned interest rate assumption.
Also, €117 thousand in insurance premiums were paid on behalf of non-executive directors who are members of the Board of Directors.
- Termination of the contractual relationship
There were no commitments as of December 31, 2012 for the payment of compensation to executive directors.
In the case of the President and COO, the contract lays down that in the event that he lose this status due to a reason other than his own will, retirement, disability or dereliction of duty, he shall take early retirement with a pension, which can be received as a life annuity or lump sum equivalent to 75% of his pensionable salary if this occurs before he reaches the age of 55, or 85% after that age.
In 2012, one member of the Management Committee left the Group, as a result of which he received a payment of €1,302 thousand.