Bankia SA - AGM 27 March 2020
In item 4, the Board asks the authorization to increase the share capital and in item 5 to issue convertible securities. The aggregate limit to increase the share capital may not exceed 50% of the existing one, with the authority to exclude pre-emptive rights up to 20% of the issued share capital. The proposals exceed the ECGS guidelines limit of 10% for general capital increases without pre-emptive rights. Hence, we recommend opposition.
In item 11, shareholders are called to an advisory vote on the 2019 Remuneration Report. The quality of disclosure is in line with Spanish market practice, and overall remuneration amounts are reasonable (€500,000 for the executives' base salary and aggregate variable remuneration capped at €300,000), due to the fact that Bankia received financial support from the State and it is still controlled by the Government. Severance payments are capped at 2 years of fixed remuneration, in line with best practices in Spain. We regret that the variable remuneration depends more on annual than long-term results (the annual bonus represents 62.5% of aggregate variable remuneration at on-target performance). However, in our opinion the overall structure of variable remuneration schemes is adequate to align the interests of executives and shareholders in the long term (all incentives are paid 50% in shares and after a deferral period of at least 3 years). Therefore, we recommend approval.
Bankia is a financial institution based in Spain. Co. is primarily engaged in operations in the banking sector. Co.'s business operations are structured into seven areas: Retail Banking, Business Banking, Private Banking, Asset Management and Bancassurance, Capital Markets and Holdings. Co. offers financial products and services to various customer segments, such as individuals, small and medium enterprises, large corporations, as well as public and private institutions. As of Dec 31 2014, Co. had total assets and total customer deposits of Euro233,648,603,000 and Euro106,806,698,000 respectively.
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