Mapfre - AGM 13 March 2020
In item 5.1, the Board proposes to re-appoint Mr. Ignacio Baeza Gómez as executive Director. As we have concerns on the overall composition of the Board, comprising 5 executives (33%), 3 representatives of the controlling shareholder and only 7 independent Directors (47%), we recommend opposition.
In item 6, shareholders are called to a binding vote over the 2020-2022 remuneration policy for the members of the Board of Directors. No significant changes are proposed to the policy approved by the 2019 AGM, except for additional performance metrics used to calculate the annual bonus (only net profit was used until 2019) and the clarification of the rule used to calculate the maximum long-term incentive (if the fulfilment of the objectives exceeds 150%, 200% of the incentive will be paid). The overall remuneration amounts are reasonable, but we strongly regret that the maximum amount of the variable remuneration to be paid to each executive Director is not disclosed, and we consider excessive the annual pension contributions (on aggregate amounting to 57% of executive Directors' base salary). Also taking into account that the Board has excessive discretionary power in awarding severance payments, we recommend opposition.
In item 7, shareholders are called to an advisory vote on the 2019 Remuneration Report. The level of disclosure is low, as Mapfre does not disclose the maximum annual bonus and LTI to be granted to each executive Director (only the aggregate maximum cash incentive per year is disclosed: 150% of the fixed remuneration). Furthermore, we strongly regret that the Company has not disclosed the level of achievement of annual and long-term targets, and concerns may arise over the use of targets that are not challenging enough, considering that the bonus decreased by only 1.7% despite a 24.5% decrease in the sole KPI used to calculate the 2019 bonus. Also taking into account that pension contributions exceed our voting policy limit of 30% of fixed remuneration, we recommend opposition.
Mapfre is an insurance company based in Spain. Co. is the parent company of a group engaged in the underwriting and provision of insurance in Spain and abroad. Insurance policies provided include: life, non-life, accident, home-owner, general and health. Through its subsidiaries, Co. is also engaged in the provision of reinsurance, the management of investment funds, pension funds and pension plans, real estate and related services. On the domestic market, Co.'s activities include managing investment funds, pension funds and pension plans, real estate and other service businesses.
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