Banco Santander April 11th, 2019
In item 3. E, the Board proposes the re-election of the Lead Independent Director Mr. Bruce Carnegie-Brown. Even though he is deemed independent, we have serious concerns over his annual compensation from the Bank, above € 700'000 for the past 4 years, an amount which may undermine his independent judgement as Director. Therefore, we recommend opposition.
In item 9, shareholders are called to a binding vote on the bank's remuneration policy, unchanged from last year's, which will extend until 2021. The quality of disclosure is at the highest levels in Spain, as all performance conditions are disclosed and long-term conditions are quantified. However, in our opinion the variable remuneration is not sufficiently linked to long-term results, as 76% depending on annual performance, the Board has excessive discretionary power in determining the final variable remuneration (+/- 25%), and egregious remuneration and pension contributions are granted to both the Chairwoman and the CEO. Therefore, we recommend opposition.
In item 10, we recommend that shareholders oppose the maximum remuneration of Directors in their capacity as such, due to the excessive compensation of non-executive Directors (on average € 316'917 in 2018), and in particular of the Lead Independent Director (€ 732'000), which risks to undermine their independent judgement. Due to our concerns over the remuneration policy and the fixed remuneration of executive Directors, which is used to calculate their variable remuneration, we also recommend opposing the maximum ratio between fixed and variable remuneration (item 11), and the 2018 Annual Remuneration Report (advisory vote in item 14).
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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