Report
Expert Corporate Governance Service (ECGS)
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Banco Santander – AGM 2 April 2020

We have serious concerns over the concentration of powers on the Board of Banco Santander, as the Chairwoman is primarily responsible for the management of the Bank. Despite there being enough independent representation on the Board (53% as per ECGS guidelines), concerns may arise over the high remuneration of the Lead Independent Director (€700'000 in 2019), which may undermine his independent judgement. For these reasons, we recommend opposing the re-appointment of the executive Chairwoman in item 3.E, as well as the disproportionate fees paid by Banco Santander to non-executive Directors, in particular to the LDI, in item 10. 

We also recommend opposition to item 9, binding vote on the Directors' Remuneration Policy, due to the excessive executive and non-executive fixed remuneration, the egregious termination benefits (golden parachutes) and the high discretionary power of the Board in determining the final variable remuneration (+/-25%). Also due to the excessive executive fixed remuneration, we recommend to vote against item 11. For this reason and the short-term oriented variable remuneration structure, we advise shareholders to oppose the consultative vote on the Annual Report on Directors' Remuneration (item 14). 

Underlying
Banco Santander S.A.

Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.

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Proxinvest
Proxinvest

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Expert Corporate Governance Service (ECGS)

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