Banco Santander - AGM 25 March 2021
In item 3.G, the Board proposes the re-election of the Lead Independent Director (LID) Mr. Bruce Carnegie-Brown. Even though he is deemed independent by the Bank, we have concerns over his annual compensation, above €690'000 on average over the past 5 years, an amount which may undermine his independent judgement as Director, which is crucial given his position as LID. Therefore, we recommend opposition.
In item 8, it is proposed to approve the 2021-2023 Remuneration Policy. Despite the quality of information being one of the highest in Spain (performance metrics and conditions are disclosed and quantified), concerns arise over the structure of variable remuneration, that is more-focused on short- than long-term performance. Furthermore, we consider that the Board’s discretionary power to adjust the final variable remuneration by 25% (up or down) risks to undermine the link between pay and performance. Moreover, the high termination benefits (€49.4 million accumulated funds to the pension scheme plus severance payments) represent golden parachutes and the pension contributions surpass our limit of 30% fixed remuneration. For all aforementioned reasons, we recommend opposing.
In item 9, it is proposed to set the maximum amount of annual remuneration to be paid to all Directors. We have concerns over the high fees paid to non-executive Directors and especially to the LID, that risk to undermine their independence. Hence, we recommend to oppose this resolution.
In item 13, shareholders are called on an advisory vote on the Annual Remuneration Report for FY 2020. We commend the Directors for deciding to reduce their annual salaries by 20% (50% for the Chairwoman and CEO) and destining the saved amount to fight against the health emergency. However, the non-executive fees are over double the median at European banks and 158% of the median in large Spanish companies. Furthermore, the executive fixed remuneration (upon which the variable compensation is based) is also over double of that of European peers. Therefore, we recommend opposing this resolution.
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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