Sacyr – AGM 10 june 2020
It is proposed to re-elect two proprietary Directors in items 6.1 and 6.2, as well as to ratify the appointment of Mr. Luis Javier Cortés Dominguez as other external Director in item 6.3. ECGS has concerns over the lack of independence on the Board (46.2%), therefore we recommend that shareholders oppose these resolutions.
In item 7, shareholders are called for an advisory vote on the 2019 Directors'Annual Remuneration Report. Concerns may arise over the excessive power of the Board to increase all of the Chairman-CEO's remuneration components at their discretion, in particular his bonus and long-term incentive (LTI) from 130% to 200%, and we strongly regret that 30% of Mr. Manrique Cecilia's annual bonus depends on a qualitative assessment of the Board. Hence, we recommend opposition.
In item 8, it is proposed to amend the Remuneration Policy to accommodate one main change: Directors may receive part of their LTI paid in shares as well as cash. We welcome the change as it aligns the interests of executives with those of shareholders, but we regret that the Company has not disclosed a breakdown of the incentive.
Moreover, executive remuneration is not linked to any relative performance conditions, only financial markers, and we note that 50% of the bonus and 75% of the LTI depend on the same performance metrics. Also, considering that the severance payments largely exceed ECGS's voting policy limit of 2 years, we recommend opposition.
In item 9, a review of the 2018-2020 LTI Plan is proposed to include the payment of the bonus partly in shares. The Company discloses that up to 40% of the incentive may be made in shares but fails to explain the breakdown. However, since we welcome the changes as it helps align executive remuneration with the interests of shareholders, we recommend approval.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
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