Notes to the consolidated financial statements

Directors' remuneration

Directors' remuneration 

The Board of Directors has prepared a specific "Report on Remuneration" for 2007. This report addresses the following aspects:

  • Approval of the remuneration policy.
  • Criteria applied in the existing policy. 
  • Provisions of the Company's by-laws and applicable regulations governing Directors' remuneration.
  • Process for determining remuneration.
  • 2007 remuneration system.
  • New developments in the remuneration policy.
  • Policy envisaged for 2008 and following years.
  • Other matters of interest.

2007 Remuneration System for the Board of Directors

Remuneration provided by the Company by-laws (per diems and bonuses)

The Board remuneration system has not changed in structure terms since 2004. It provides a total fixed annual remuneration for all the Directors with respect to the per diems and bonuses, subject to a maximum of 3% of consolidated income for the year attributable to the company (as stipulated by Article 25 of the by-laws), following approval of the financial statements.

The fixed annual total for 2007 is 1,300,000 euros, entailing the first change to total remuneration since the system was implemented in 2004.

This total fixed amount is paid as follows:

  • PER DIEMS: Per diems are paid for attendance at meetings of the Board and its executive or advisory committees. The following amounts have not changed since 2004:

    • A gross sum of 3,250 euros for attending Board meetings;
    • A gross sum of 2,000 euros for attending Executive Committee meetings;
    •  A gross sum of 1,500 euros for attending meetings of the Audit and Control and Nomination and Remuneration Committees.
    • The per diems received by the Chairpersons of the three committees (Executive, Audit and Control and Nomination and Remuneration) are twice the above-mentioned amounts.
    • Per diems for 2007 totalled 562 thousand euro (596 thousand euro in 2006).

  • DISTRIBUTION OF THE SURPLUS. After deducting per diems paid, the agreed fixed remuneration of 1,300,000 euros was reduced to arrive at a surplus of 738 thousand euro. This surplus was divided into 13 parts by applying to the quotient the following factors to determine the allocation of individual amounts: Board Chairperson: *2; First Vice-Chairperson: *1.75; Second Vice-Chairperson: *1.25 and rest of Directors: *1.

The following table contains an itemised breakdown of Directors' remuneration stipulated in the by-laws for 2007 (*):

Breakdown of Directors' remuneration stipulated in the by-laws

(*) On a cash basis, gross Board remuneration paid for 2007 totalled 1,126 thousand euro.

(**) Mr Fernando del Pino y Calvo-Sotelo received the proportional part of the surplus for the months in which he held office (six months). The remainder was allocated to the rest of the Board members as explained above, although the divisor was adjusted to the number of Directors remaining following his departure.

The sum of the per diems and bonuses paid in accordance with the by-laws to all the members of the Board of Directors is equal to 0.18% of income attributed to the parent company.

  • APPLICATION OF DIRECTORS' REMUNERATION TO PURCHASE COMPANY SHARES: In 2007, the obligation to use Directors' remuneration (per diems and bonuses stipulated in the by-laws) to purchase company shares remains in force. Shares purchased during the same calendar year may only be sold once three full financial years have elapsed as from the year of purchase.
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