ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF …
Transcript of ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF …
1
ANNUAL REPORT ON THE REMUNERATION
OF DIRECTORS OF
LISTED COMPANIES
2015
DATA IDENTIFYING ISSUER
ENDING DATE OF REFERENCE FINANCIAL YEAR: 31/12/2015
TAX IDENTIFICATION CODE (C.I.F.): A28157360
Registered Name: BANKINTER, S.A .
Registered Address: PASEO DE LA CASTELLANA, 29 – 28046 MADRID
This English version is a translation of the original in Spanish for information
purposes only. In case of a discrepancy, the Spanish original will prevail.
2
A. COMPANY REMUNERATION POLICY FOR THE CURRENT FINANCIAL
YEAR (2016)
A.1. Explain the company’s remuneration policy.
The purpose of Bankinter’s remuneration policy is to establish the essential
principles and elements of a remuneration system fully compatible with the
Institution’s business strategy, objectives, values and long-term interests, and
with sound and prudent risk management, both in absolute terms and in
comparison with the sector, defining the Bank’s remuneration practices and
establishing monitoring and control mechanisms to ensure the Institution’s
soundness at all times, by not encouraging behaviour involving the
assumption of excessive risk, as well as by a remuneration structure
appropriate to the dedication and responsibility assumed by individuals,
attracting, retaining and motivating the most outstanding professionals.
Consequently, Bankinter’s remuneration policy is governed by the following
general principles, applicable to the remuneration of the entire workforce:
Prudent and effective risk management.
Alignment with long-term interests.
Appropriate balance between fixed and variable components.
Multiple elements.
Internal fairness and external competitiveness.
Supervision and effectiveness.
Flexibility and transparency.
Simplicity and customisation.
Attracting, retaining and motivating the most outstanding professionals.
Remunerating the dedication and responsibility assumed by individuals.
With regard to Directors, Bankinter’s remuneration policy provides for the
following types of remuneration, depending upon the duties performed:
i) Remuneration of directors in their capacity as such: as of 1 January 2015,
remuneration accrued by members of the Board of Directors for their
supervisory and collective decision-making duties consists of an annual fixed
amount that does not include variable components, provided that earning it is
not subject to achieving targets or indexed to profits, thus satisfying the
corporate governance recommendations.
Total remuneration received individually may be satisfied by means of one or
a combination of three of the following remuneration items, all included in
3
the institution’s corporate By-Laws: i) annual fixed amount for membership of
the Board of Directors and exercise of duties as chairmen of its committees; ii)
fees for attending meetings of the Board and its committees; and iii) delivery
of shares, options on said shares or remuneration indexed to the value of the
shares.
For financial year 2016, remuneration will include only the first two items.
ii) Fixed Remuneration of the Chairman of the Board of Directors for
performance since January 2013 of non-executive institutional duties (as
described in section A.3 below) additional to those duties performed in his
capacity as Chairman of the collective decision-making body, the latter
remunerated in accordance with the structure of the preceding point. The
Chairman of the Board of Directors shall receive no variable remuneration
whatsoever, for the same reasons as noted in the previous point for non-
executive directors.
iii) Remuneration of the Executive Directors for their executive duties: in
addition to the remuneration mentioned in point i), for the exercise of their
executive powers and as part of the commercial administration agreements
binding them to the company, the executive directors (Executive Vice-
Chairman and CEO) receive annual remuneration consisting of a fixed portion
and another variable portion, depending on the fulfilment of previously
established targets, aligned with prudent risk management and consistent
with the institution’s long-term interests. The executive directors are also
entitled to participate in long-term variable remuneration systems that the
institution resolves to implement at any time.
Bankinter’s remuneration policy clearly distinguishes between the criteria for
the establishment of:
Fixed-base remuneration, primarily reflecting professional experience and
responsibility within the organisation, and
Variable remuneration, reflecting a sustainable, risk-adjusted return.
The fixed and variable components shall be duly balanced for the executive
directors, with the fixed component constituting a sufficiently high portion of
total remuneration.
At its meeting of 20 January 2016, the Board of Directors adopted, among
other resolutions, the annual variable remuneration structure for 2016
applicable to both the executive directors for the exercise of their executive
duties and the institution’s Senior Management, with a new configuration of
relevant indicators, the features of which are described in section A.4 below.
The total annual variable remuneration that executive directors might receive
for the exercise of their executive duties in a scenario of 100% fulfilment of all
targets set by the Bank for financial year 2016 would amount to 30.23% of
the fixed remuneration set for their executive duties in the case of the Vice-
4
Chairman and 31.75% for the CEO, with said percentage being lower in any
case if total remuneration is considered as that which is accrued for the
supervisory and executive duties of directors.
At the same meeting of 20 January 2016, the Board of Directors also
approved a long-term incentive plan covering 60 beneficiaries, including both
the executive directors for the exercise of their executive duties and the
institution’s Senior Management and a portion of the members of the
identified group, with the features of said multi-year plan also described in
section A.4 below.
A.2. Information regarding preparatory work and the decision-
making process followed to determine the remuneration policy,
and any role played by the Remuneration Committee and other
control bodies in the configuration of the remuneration policy.
This information shall include, if appropriate, the mandate and
composition of the Remuneration Committee and the
identification of external advisers whose services have been used
to determine the remuneration policy. There shall also be a
statement of the nature of any directors who have participated in
the determination of the remuneration policy.
Bankinter’s general remuneration policy was proposed by the Appointments
and Remuneration Committee (currently the Remuneration Committee) at its
meeting of 20 January 2015 and approved by the Board of Directors at its
meeting of 21 January 2015.
Bankinter’s Board of Directors is responsible for establishing a control and
supervisory system for remuneration policy, to which end it may delegate
monitoring and supervision thereof to a committee.
In accordance with the above and with Article 35 of its By-Laws, on 21
January 2015 Bankinter established a separate Remuneration Committee, to
which it entrusted general powers to propose and report on remuneration
matters.
For its part, Article 37 of the Regulations of the Board assigns to said
Committee the following duties, among others:
Proposing for the approval of the board the remuneration policy for
directors and their individual remuneration, as well as the corresponding
annual director remuneration report, which the board shall submit to the
shareholders at the General Shareholders’ Meeting for a consultative vote.
Proposing to the board the individual remuneration of the executive
directors and, if applicable, the external directors, for performance of their
duties other than mere advising and other conditions of their contracts.
5
Proposing the remuneration policy for senior management, including
general directors or those who carry out their senior management duties
under the direct control of the board, the executive committees or the CEO,
as well as individual remuneration and other basic conditions of their
contracts.
The remuneration of members who, while not part of senior management,
receive significant remuneration, particularly the variable portions, and
whose activities may have a material impact on the assumption of risks by
the Group.
Overseeing the scope of application of the remuneration policy in general
during the financial year, and ensuring compliance therewith.
Periodically reviewing the remuneration programmes, considering their
suitability and returns and ensuring that director remuneration conforms
to criteria of moderation and adjustment to the company’s results.
Ensuring the transparency of the remuneration and its inclusion in the
annual report and in any other annual reports containing information on
director remuneration and to this end, submitting any applicable
information to the Board.
Reporting on incentive plans for officers or employees related to the
performance of the Bank’s shares or to other variable indices, as well as on
the remuneration systems of the institution’s management team based on
group insurance systems or deferred remuneration systems, if any.
With relation to their remuneration, in accordance with the same articles 35
of the By-Laws and 38 of the Regulations of the Board, the Remuneration
Committee consists of four directors, appointed by the Board of Directors, all
of them external and non-executive, in accordance with the provisions of the
Companies Act (Ley de Sociedades de Capital), all of them independent
directors, including the director chairing the Committee.
Such members of the Committee have an indefinite term of office, as it falls to
the Board of Directors to approve their replacement as stipulated in article 37
of its Regulations.
Taking the above into account, as at the date of approval of this report, the
composition of Bankinter’s Remuneration Committee was the following:
Chairman
Mrs Rosa María García García (independent external director).
Members:
Mr Jaime Terceiro Lomba (independent external director).
6
Mr Gonzalo de la Hoz Lizcano (independent external director).
Mr Rafael Mateu de Ros Cerezo (independent external director).
On 18 March 2015, Mr John de Zulueta Greenebaum, then an external
independent director of the Institution, ceased to chair the Remuneration
Committee after resigning as Director, for the reasons set forth in the Annual
Corporate Governance Report and also made available to the shareholders
upon the call to the General Shareholders’ Meeting that will be held in March
2016. Since 22 April 2015, Mrs. Rosa María García García, an external
independent director, has chaired the Remuneration Committee. Pursuant to
Article 31.1 of Royal Decree 84/2015 of 13 February, implementing Law
10/2014 of 26 June on the organisation, supervision and solvency of credit
institutions (hereinafter, “LOSS”), all directors have the appropriate level and
profile of training to perform their duties within the committee, particularly
in the areas of banking and financial services, and the practical experience
deriving from their previous occupations over sufficient periods of time.
In addition to the skills corresponding to the Remuneration Committee, the
Risk Committee’s duties in relation to remuneration policy include
collaborating to establish reasonable remuneration policies and practices
(article 42 of Royal Decree 84/2015, implementing the LOSS, and article 36 of
the Regulations of the Board of Directors). For such purposes, at its meeting
held on 19 January 2016, notwithstanding the duties of the Remuneration
Committee, the Committee confirmed that the incentives provided for in the
remuneration system take into consideration the risk, capital, liquidity and
probability and timeliness of earnings.
Finally, article 37 of the Regulations of the Board provides that the
Remuneration Committee must have access to all information and
documentation needed for the exercise of its duties, and may receive
assistance from advisors, consultants, experts and other dependent
professionals.
In this regard, in the process of adopting their respective decisions concerning
remuneration, the Remuneration Committee and the Board have been able to
use the comparative studies carried out by the consultant Towers Watson,
which compare the relevant remuneration data for the institution with those
of comparable markets and institutions, given the Bank’s scope,
characteristics and activities, including Abanca, Banco Mare Nostrum, Banco
Sabadell, Banco Santander, Bankia, BBVA, Caixabank, Evo Banco, Laboral
Kutxa, and Liberbank.
Further, the Remuneration Committee and the Board of Directors received
advice from the KPMG Abogados firm, as an independent expert witness in
preparing the Bankinter Group’s remuneration policy adjusted to the
requirements of Royal Decree 771/2011 of 3 June and Law 10/2014 of 26 June
on the organisation, supervision and solvency of credit institutions. Bankinter
has also received advice from the same firm for the preparation of this report.
7
A.3. State the amount and nature of the fixed components, with a
breakdown, if applicable, of remuneration for the performance by
the executive directors of the duties of senior management, of
additional remuneration as chair or member of any committee of
the board, of attendance fees for participation on the Board and
the committees thereof, or other fixed remuneration as director,
and an estimate of the annual fixed remuneration to which they
give rise. Identify other benefits that are not paid in cash and the
basic parameters upon which such benefits are provided.
As noted in point A.1 of this report, Bankinter has a remuneration system
that distinguishes between remuneration of directors for performing their
supervisory and collective decision-making duties, i.e., in their capacity as
such, remuneration of the Chairman for performing non-executive
institutional duties, and remuneration of the executive directors for
performing executive duties. The fixed components remunerating the various
types of duties to be exercised by directors are explained below:
i. Fixed remuneration of all directors in their capacity as such (supervisory
and collective decision-making duties):
Pursuant to articles 37 of the By-Laws and 23 of the Regulations of the
Board, directors shall be entitled to receive remuneration for their
appointment as members of the Board of Directors, the annual maximum
amount of which for all directors shall be set by the shareholders at the
general shareholders’ meeting and which may be satisfied by means of:
An annual fixed allotment.
Attendance fees.
Delivery of shares, option rights thereon or remuneration indexed to
the value of the shares.
Pursuant to sections 217 and 529 septdecies of the Companies Act (Ley de
Sociedades de Capital), the General Shareholders’ Meeting of 18 March
2015 resolved to set the maximum amount of the annual remuneration of
the directors in their capacity as such at the amount of 1,600,000 euros,
which amount shall remain in effect for so long as the shareholders do not
approve an amendment thereof.
The specific decision as to the amount corresponding to each director for
the items mentioned above is set annually by the Board of Directors, taking
into account the duties performed by each director in the collective
decision-making body itself and his or her membership and attendance at
meetings of the board and the various committees. In this regard, the
8
Board of Directors, at its meeting of 16 December 2015, approved the
following breakdown for 2016:
Annual fixed allotment:
Chairman: 175,950 euros annually.
The executive directors: 155,250 euros annually.
Other members of the Board: 87,975 euros annually.
Chairmen of some of the Committees: Additional 15,525 euros
annually.
Attendance fees, to be paid after each meeting:
Board of Directors: 2,070 euros per meeting to the Chairman of the
Board and 1,552.50 euros per meeting to the members.
Committees: 1,552.50 euros per meeting to the Chairman of the
Board and 1,035 euros per meeting to the members.
Delivery of shares, option rights thereon or remuneration indexed to
the value of the shares: not provided.
These amounts have been subject to an adjustment of 3.5% for 2015, in
line with the average increase in remuneration for the rest of the
workforce, and far below the Bank’s increased earnings in recent years.
In the event of death, it is established that all rights to sums pending
receipt but already accrued that correspond to the director shall be passed
on to his or her heirs or beneficiaries, taking such actions as may be
necessary to this end. The same shall occur in the event of disability of the
director in performing his or her duties.
In cases of resignation by the director for any reason other than those
indicated in the preceding section, with regard to the fixed annual amount,
it is established that the resigning director shall be entitled to the
proportional share corresponding to the number of days the director has
spent in the position.
It is also necessary to note that directors Mr Gonzalo de la Hoz Lizcano and
Mr Rafael Mateu de Ros, in their capacity as non-executive directors,
receive fees for attending Board of Directors’ meetings of other group
companies. The breakdown of the aforementioned fees and their amounts
are specified in sections C and D of this report, respectively.
ii. Fixed remuneration of the Chairman of the Board for non-executive
institutional duties.
9
Pursuant to articles 26 of the By-Laws and 24 of the Regulations of the
Bank’s Board, the Chairman of the Board of Directors is ultimately
responsible for the effective functioning of the Board of Directors. The
Chairman’s duties include the following:
1. Duties of the Chairman of the Board of Directors in his capacity as
such
The Chairman of the collective decision-making body is responsible for the
following duties, among others, in his capacity as such:
a) Ensuring the effective functioning of the Board;
b) Convening and chairing the Board;
c) Leading the Board and its discussions and ensuring their coverage;
d) Preparing and submitting to the board of directors the schedule of
dates and issues to be discussed;
e) Promoting discussion of the institution’s strategic objectives;
f) Maintaining relations with directors, facilitating their exercise of their
duties;
g) Organising and coordinating the periodic assessment of the board as
well as that of the company’s top executive, if applicable; and
h) Approving and reviewing the knowledge refresher programmes for
each director, which the circumstances so require.
2. Institutional representation duties to the institution’s benefit
In addition to the duties corresponding thereto as Chairman of the
collective decision-making body and notwithstanding the institution’s legal
representation, which in each case corresponds to the individuals
appointed for that purpose, the Chairman performs specific duties within
the scope of institutional relations, which under no circumstances involve
the exercise of management or any other executive powers, which
correspond exclusively to the directors appointed as such by the Board.
Within this scope, the Chairman performs the following activities, among
others:
a) Maintaining institutional relations with domestic and international
supervisory bodies and sectoral bodies, establishing periodic contacts
with them, if applicable;
b) Contributing to the institution’s relations with domestic and
international investors, credit rating agencies, etc., maintaining
contact with them for such purpose in coordination with the areas
responsible for the institution’s institutional relations;
c) Contributing to the strengthening of institutional relations with
domestic and international bodies representing sectoral interests;
d) Maintaining institutional relations with the leading institutions in the
markets, clearing houses and other similar institutions; and
10
e) Assisting the various business units of the institution and of its
subsidiaries, at their request, in their institutional relations with
customers, suppliers or any other commercial partners.
3. Duties relating to Corporate Social Responsibility
Within the scope of Corporate Social Responsibility and in accordance with
Bankinter’s Policy, the following duties correspond to the Chairman:
a) Ensuring coordination [of] the activities of the Innovation Foundation
with the Bank’s various departments, setting targets and assessing its
Director and proposing his or her remuneration to the Board
[Patronato];
b) Chairing the Sustainability Committee;
c) Proposing, coordinating and overseeing the Sustainability Committee’s
activities with regard to:
i) Changes in the Sustainability Policy and in the resulting Plans,
Lines and Programmes, ensuring their dissemination and
seeking the involvement of all BANKINTER interest groups,
particularly strategic groups (employees, shareholders,
customers, etc.).
ii) The Sustainability Strategy and its Master Plan, their planning
and the monitoring of their corresponding initiatives.
iii) The effective integration of the principles contained in the
Sustainability Policy and Strategy into the management of each
company business unit, both consistently and integrated into
the Bank’s overall Strategy.
iv) Ensuring the availability of the resources and tools needed to
implement and improve Sustainability Management in the
Institution, promoting innovation and the use of the best
available technologies.
v) Managing the information needed to extend and maintain
management systems, thus contributing to improving the
Institution’s economic, social and environmental efficiency.
vi) Preparing the Sustainability Report and reviewing it prior to its
presentation to the Board of Directors through the
Appointments and Corporate Governance Committee.
vii) Analysing the repercussions of possible organisational changes
for Sustainability Management, and establishing appropriate
measures to ensure the continuity and efficiency of the
management system.
viii) Participating in the review of progress and performance of
Sustainability Management to ensure its proper functioning.
11
d) Periodically informing the Board of Directors, through its
Appointments and Corporate Governance Committee, of the
Sustainability Committee’s monitoring of the Sustainability Strategy
and its main points of progress.
e) Any other points that the Board may agree to assign thereto.
4. Duties concerning the Internal Audit Division
According to article 36 of the Regulations of the Board of Directors, the
Bank’s Audit Division, reporting to the Audit and Regulatory Compliance
Committee, functionally reports to the Chairman, pursuant to which its
duties are the following:
a) Proposing the targets and remuneration of the Internal Audit
Director for approval by the Audit and Regulatory Compliance
Committee; and
b) Performing ordinary monitoring of the Division’s activities without
prejudice to the exclusive competence of the Board’s Audit and
Regulatory Compliance Committee, to which it directly reports.
In view of the above, and in accordance with articles 37 of the By-Laws and
23 of the Regulations of the Board, in view of the responsibilities assigned
thereto and other objective circumstances, upon the prior proposal of the
Remuneration Committee, the Board of Directors at its meeting of 16
December 2015, without the presence of the Chairman, awarded the
following amount of additional fixed remuneration to the Chairman of the
Board for 2016:
Chairman of the Board: 661,500 euros per year (receives no variable
remuneration).
This amount has been adjusted by 5% for 2015, due to the excellent
performance of the duties that have been assigned thereto, as
previously described.
iii. Fixed remuneration of executive directors
Pursuant to articles 37 of the By-Laws and 23 of the Regulations of the
Board, directors will be entitled to receive the remuneration (wages,
incentives, bonus, pension, insurance, severance payments) deemed
appropriate for performance of their duties other than those involving
supervision and collective decision-making as members of the board, upon
the prior proposal of the Remuneration Committee and by approval of the
Board of Directors.
12
Bankinter’s Board of Directors has two executive directors: (i) the CEO, Ms
María Dolores Dancausa Treviño, and (ii) the Executive Vice-Chairman, Mr
Alfonso Botín-Sanz de Sautuola y Naveda, representing Cartival, S.A.
Pursuant to article 27 of the By-Laws, the CEO has been assigned the
ordinary management of the business, with the highest executive duties,
as well as all the powers of the Board of Directors, except those which
cannot be delegated under law, the By-Laws themselves or the Regulations
of the Board.
In turn, the Executive Vice-Chairman’s duties include the following, among
others:
Chairing the Executive Committee;
Chairing the Assets and Liabilities Committee;
The delegated executive [duties] assigned thereto under the By-
Laws and the Regulations of the Board; and
Duties relating to risk and Investment Banking.
The fixed remuneration of the company’s executive directors is also based
on the level of responsibility of the position held and on the experience,
performance and training of the individual holding it. The remuneration
levels that have been established are adapted to the Bank’s values, giving
additional weight to teamwork over individual work, consistent with the
Bank’s culture.
Annually, applying the principle of market analysis, Bankinter participates
in sectoral remuneration studies to establish the market references against
which it is compared. These references are also taken into account, along
with other internal criteria, in developing the salary ranges that are
established for each position. Specifically, in setting remuneration for
financial year 2016, the Remuneration Committee and the Board of
Directors made use of a study performed by the consulting firm Towers
Watson on the analysis of the competitiveness of the chief executive’s
remuneration, which compares Bankinter to 12 IBEX35 companies,
namely: Amadeus, Abertis, Ferrovial, Red Eléctrica, Grifols, Enagas,
Mediaset, Acerinox, Día, Gamesa, Técnicas Reunidas and Indra. Said study
also includes a second comparison with the following group of Spanish
financial institutions: Santander España, CaixaBank, BBVA España, Banco
Sabadell and Banco Popular. The results of said study indicate that the
remuneration of Bankinter’s executive directors for the exercise of their
executive duties is significantly below the average of their peers.
In view of the above, at its meeting of 16 December 2015, without the
presence of the executive directors and at the proposal of the Remuneration
Committee, the Board of Directors awarded the following fixed
remuneration to them for 2016:
13
CEO: 785,333 euros annually.
Executive Vice-Chairman: 562,555 euros annually.
Said remuneration was subject to an adjustment of 12% in the case of the
CEO and of 8% in the case of the Executive Vice-Chairman for 2015, by
reason of their dedication and performance in recent years, while still
maintaining a significant difference from peers in other companies, as
shown by the abovementioned remuneration studies.
Fixed remuneration
2016
Fixed remuneration
2015
Non-Executive Chairman 661,500 euros annually 630,000 euros annually
Executive Directors:
- Vice-Chairman 562,555 euros annually 520,884 euros annually
- CEO 785,333 euros annually 701,190 euros annually
A.4. Explain the amount, nature, and main features of the variable
components of the remuneration systems.
As noted previously, the only directors who receive variable remuneration are
those who exercise executive duties: the Executive Vice-Chairman and the
CEO.
The purpose of this variable remuneration is to incentivise performance by
orienting it toward the targets set by the Institution, so as to ensure a proper
correlation between the resulting remuneration levels and the evolution of
the company’s results, directly indexed to overall banking activity targets
while at the same time promoting sound and effective risk management that
prevents the variable remuneration from creating incentives for individual
behaviour involving the assumption of excessive risk.
The remuneration plans from which the executive directors benefit are set
forth below.
i. Annual variable remuneration
Bankinter has not defined a specific variable remuneration structure for the
Executive Directors, but rather applies the same annual variable incentive
system to them as to the rest of the workforce that receives this type of
remuneration.
The purpose of the annual incentive is to ensure a proper correlation
between the resulting remuneration levels and the evolution of the results,
directly indexed to the Earnings Before Tax target of the group’s banking
activity, with a system of individual distribution based on assigned duty
and responsibility.
14
Furthermore, in the established target indicators, the annual variable
remuneration system includes, in addition to those referring to that year,
financial indicators defined to ensure proper correlation between the
resulting remuneration levels and the evolution of the group’s medium-
and long-term results, preventing excessive risks from being incurred.
To ensure the variable remuneration of the executive directors has these
characteristics, Earnings Before Tax (EBT), to contribute to the appropriate
management of risks and their association with medium- and long-term
management, and Gross Margin, a critical factor in medium- and long-
term business sustainability and in alignment with the institution’s risk
policy, have been set as financial indicators for financial year 2016.
Each of these indicators, EBT and Gross Margin, independently account for
60% and 40%, respectively, of variable remuneration. The variable
component accrues from the achievement of 90% and up to a maximum of
120% of the targets, potentially resulting in between 80 and 120% of the
variable amount assigned to each beneficiary, according to the
aforementioned achievement percentages. Pursuant to the foregoing, the
incentive to be received in the event of maximum achievement of the
targets is 120% of the target incentive. This information is broken down in
the following table:
Target Weighting % Compliance % Incentive
Accrual
EBT 60% 90% ≤ x ≤ 100%
100% < x ≤ 100%
80% ≤ x ≤ 100%
100% < x ≤ 120%
Gross margin 40% 90% ≤ x ≤ 100%
100% < x ≤ 100%
80% ≤ x ≤ 100%
100% < x ≤ 120%
Additionally, accrual of this variable remuneration is contingent upon
achieving a solvency indicator: the level of capital measured by “Core
Equity Tier One” (CET1) must be 10% to accrue 100% of the achieved
incentive. If this Capital Ratio is between 9% and 10%, 50% of the
achievement will be accrued, and below 9%, no amount whatsoever will be
accrued.
CET1 % compliance
x < 9% 0
15
9% ≤ x < 10% 50%
x ≥ 10% 100%
In light of all the foregoing, upon the proposal of the Remuneration
Committee, Bankinter’s Board of Directors has approved the following
amounts as variable remuneration for 2016, which the executive directors
will receive if they meet 100% of the defined targets:
For accrual of the variable remuneration for financial year 2016, if
applicable, the Vice-Chairman will receive 170,060 euros, subject to the
clauses described below.
The variable remuneration set for the CEO for financial year 2016 is
249,343 euros, subject to the clauses described below.
Variable remuneration
2016(*)
Variable remuneration
2015(**)
Non-Executive
Chairman
0 0
The executive directors:
- Vice-Chairman 170,060 euros annually 161,289 euros annually
- CEO 249,343 euros annually 228,038 euros annually (*)
Estimated amount for 100% achievement of the targets to which the 2016 variable
remuneration is indexed. (**)
Accrued amount according to a target-achievement percentage of 102.43%
This annual variable remuneration is subject to the following clauses:
Deferral: a substantial portion of the variable remuneration element,
specifically 40%, will be deferred over a period of three years, correctly
adjusted to the nature of the business units, their risks and the
activities of the members of the identified group.
This deferred remuneration shall be paid over the three years
immediately following receipt of the non-deferred portion, in thirds,
and thus the remuneration payable under the deferral provisions will
not be received more quickly than is proportionate, through annual
payments of the same amount.
Payment in shares: a substantial portion of the variable remuneration
element, specifically 50%, will be delivered in Bankinter shares.
16
The provisions of this section will apply both to the portion of the
variable component of deferred remuneration and to the portion of the
variable component of non-deferred remuneration.
Holding period: Bankinter shares delivered to the executive directors as
variable remuneration shall be subject to a one-year holding policy as
from the date of their delivery, during which the shares will not be
available and may not be traded.
The features of said share delivery are contained in the report
submitted by the Remuneration Committee to the Board of Directors
for this purpose. Said report also explains the conditions inherent to
the payment of variable remuneration, with respect to the share
holding period, the prohibition on hedging transactions on said share
deliveries, and ex-post adjustments to remuneration, among others.
Prohibition on hedging and ex-post adjustment: The information
concerning this clause is set forth in section A.13 below.
ii. Multi-year variable remuneration: It is also necessary to mention that at its
meeting of 20 January 2016, at the proposal of the Remuneration
Committee, Bankinter’s Board of Directors approved the implementation of
a multi-year incentive plan from which the executive directors, among
others, will benefit. The essential features of said plan are the following:
1.- Plan Objectives
To improve the level of commitment and loyalty of key employees.
To transmit a long-term view of the bank to key officers in order to
generate a culture of sustainability.
2.- Participants: Executive Vice-Chairman, CEO, Management Team,
Organisation Directors and other Key Individuals. In total, 60 persons.
3.- Duration: Three years to calculate the accrued amount and four years as
from the final accrual date (31 December 2018) for the full payment of the
accrued amount (applying the deferral clauses).
Accrual: One third each year (end of 2016, 2017 and 2018)
Settlement dates:
17
4.- Reference amount of Incentive:
Two annual instalments of gross annual fixed salary for 2015
received by the plan beneficiary.
In calculating the incentive amount, the items of remuneration in
kind and corporate benefits, as well as any other type of variable
remuneration received in 2015, are expressly excluded from the
calculation.
5.- Indicators and Adjustment Mechanism
One hundred per cent of the Incentive is subject to the following final
conditions:
Each year, the Bank’s ROE must be above the mid-point for the peer
group of institutions as at 31 December of each year. The peer group
for 2016 is made up of: Santander, BBVA, CaixaBank, Bankia,
Sabadell, Popular and Liberbank. The peer group of institutions will
be subject to review each year by the Remuneration Committee to
adapt it to variations in the market, thus ensuring that in the event
of market changes, the peer group continues to be representative.
% of Bank ROE
% of accrued incentive as
at
31 December 2016
% of accrued incentive as at
31 December 2017
% of accrued incentive as
at
31 December 2018
X => mid-point of the peer
group of institutions
100% of 1/3 of the total
incentive
100% of 1/3 of the total
incentive
100% of 1/3 of the total
incentive
X < mid-point of the peer 0% 0% 0%
18
group of institutions
The ROE for Customer Activity must also exceed 10% at 31 December
2018 in order to receive 100% of the accrued variable incentive,
according to the following accrual scale:
% Customer ROE % of accrued incentive
8% ≤ x < 9% 50% ≤ x < 75%
9% ≤ x < 10% 75% ≤ x < 100%
10% ≤ x < 11% 100% ≤ x < 125%
11% ≤ x < 12% 125% ≤ x < 150%
x ≥ 12% x = 150%
6.- Basic conditions for payment of the Multi-Year Incentive
This Incentive is in addition to the rest of the variable remuneration
plans existing now or in the future at the Bankinter Group.
Furthermore, the following shall be necessary and indispensable
conditions for payment:
a. Being part of and active in the group on the accrual dates.
Termination of the employment or commercial relationship prior
to the payment dates, for any reason, will automatically and
without need for any notification whatsoever result in termination
of the right to be paid this Incentive.
b. Retaining the functional level or current responsibilities.
The Malus and Clawback clauses will be applied according to the
Bank’s Remuneration Policy.
Share holding period of one year.
7.- Definitions:
Bank ROE: Return on Equity of the Consolidated Group as a ratio
between earnings after tax and average equity.
ROE for Customer Activity: Net return resulting from inventoried
banking activity involving Adjusted Net Equity, adjusted to the
requirement that the CET 1 Capital Ratio be 10%.
Its formulation would be:
ROE = EAT / Adjusted Net Equity
Where:
19
EAT = Earnings After Tax of Bankinter, S.A. and
Bankinter Consumer Finance, S.A., EFC. (excluding cash
transactions).
Adjusted Net Equity = Net Equity excluding Línea Directa
Aseguradora * (10.0% / CET 1 Capital Ratio)
A.5. Explain the main features of the long-term saving systems,
including retirement and any other survival benefit, either
wholly or partially financed by the company, and whether
funded internally or externally, with an estimate of the
equivalent annual amount or cost thereof, stating the type of
plan, whether it is a defined-contribution or benefit plan, the
conditions for the vesting of economic rights in favour of the
directors, and the compatibility thereof with any kind of
indemnity for early termination or severance of the contractual
relationship between the company and the director.
With respect to the members of the Board of Directors, Bankinter has
established no retirement system, nor does it maintain retirement
commitments for its directors.
As an exception to the above, in the case of the CEO, it is necessary to clarify
that as CEO of the Bankinter subsidiary Línea Directa Aseguradora S.A.
(hereinafter Línea Directa), in 2005 she was awarded a defined-contribution
retirement plan that Bankinter’s Board of Directors, at the proposal of its
Appointments and Remuneration Committee (currently Remuneration
Committee), resolved to maintain at the time she joined the Bank. The
amount contributed to the aforementioned plan was 600,000 euros and
covered normal retirement, death and disability contingencies, and being a
defined contribution plan there was no commitment by Línea Directa or
Bankinter to make new contributions. Thus, no new contributions have been
made for this item up to the date of approval of this report, nor is there any
commitment to do so in future years.
A.6. State any severance payments agreed to or paid in case of
termination of duties as a director.
In the case of the Chairman, the Executive Vice-Chairman and the other
directors, no severance payments whatsoever have been established in the
event of termination for any reason.
The Chairman, Vice-Chairman and CEO have entered into commercial service
agreements with the company to cover all principal and accessory conditions
and features of their respective relations with the company.
20
In the case of the CEO, the severance payments provided for in the agreement
signed with the company apply solely to cases similar to those established for
ordinary employment relations in the Workers’ Statute and are subject to a
severance limit that may not under any circumstances exceed the limit set in
labour regulations for all employees of the Institution. In any event, pursuant
to best corporate governance practices, the severance does not exceed twice
the amount of annual total remuneration.
In any case, there is no right to receive severance payments relating to
circumstances or situations of change of control at the institution.
A.7. State the conditions that must be included in the contracts of the
executive directors performing senior management duties.
Include information regarding, among other things, the term,
limits on severance payment amounts, continuance in office
clauses, prior notice periods and payment in lieu of prior notice,
and any other clauses relating to hiring bonuses, as well as
benefits or golden parachutes due to early termination or
severance of the contractual relationship between the company
and the executive director. Include, among other things, any
clauses or agreements on non-competition, exclusivity,
continuance in office or loyalty, and post-contractual non-
competition.
The Vice-Chairman and CEO entered into commercial service agreements
with the company on 25 October 2010 to cover all principal and accessory
conditions and features of the commercial administration relationship
binding on directors pursuant to the organic relationship deriving from the
performance of their executive duties, in addition to those corresponding to
their remuneration.
A description of the conditions of the executive directors’ agreements is set
forth below:
Obligation of exclusivity and non-compete agreement: The executive
directors may not enter into other commercial or service agreements with
other companies or institutions without express authorisation of the
board of directors, establishing in any case a non-compete obligation with
relation to companies and activities of a kind similar to those of the Bank
and its consolidated group.
Submission to the Code of Professional Ethics and the Bankinter Group
Securities Market Code of Conduct: The obligation is established to
comply with the Code of Professional Ethics and the Bankinter Group
Securities Market Code of Conduct.
21
Obligation of confidentiality and return of documents: A rigorous duty of
confidentiality is established during the lifetime of the relationship as
well as after its termination, at which point documents and personal
objects related to the executive director’s activities and that are in his or
her possession must be returned to the Bank.
Duration, Prior Notice Periods and Severance Payments for Termination
of the Agreement: The Agreement is in full force as of the date of the
appointment as Executive Director and remains fully valid so long as the
appointment with executive powers remains current. In the event that
resignation is presented for any reason whatsoever, written notice must
be given three months in advance in the case of the CEO and 15 days in
advance in the case of the Executive Vice-Chairman, with the company
having the power to discount from the Director’s settlement the amount
corresponding to the unsatisfied prior notice period, unless agreed
otherwise by the Board.
Section A.6 above establishes the severance payments, if applicable,
provided for in the aforementioned agreements.
Post-contractual obligations: The CEO assumes the post-contractual non-
compete obligations during the 18-month period after the termination
date of her commercial agreement, undertaking not to engage in
employment activities or provide professional services, on her own account
or on behalf of others, that compete with those of the Bank or entities of its
Group. Remuneration under the agreement consists of a sum equal to 50%
of the last total annual fixed remuneration approved by the Board of
Directors, to be paid after the lapse of the aforementioned 18-month
period.
A.8. Explain any supplementary remuneration accrued by the
directors in consideration for services provided other than those
inherent in their position.
Bankinter directors have accrued no remuneration whatsoever under
this item other than that mentioned above.
A.9. State any remuneration in the form of advances, loans, or
guarantees provided, with an indication of the interest rate,
main features, and amounts ultimately returned, as well as the
obligations assumed on their behalf as a guarantee.
The members of the Bankinter Board of Directors have received no sum
whatsoever in the form of advances, credits or loans from the Institution
22
or guarantees established by the same in favour of directors, in the form
of remuneration.
Nevertheless, Bankinter directors maintain risk positions in their name,
all of them consistent with the company’s ordinary course of business
and under market conditions, that is, pursuant to agreements with
standardised conditions and which are generally and customarily
applied to all other customers..
A.10. Explain the main features of remuneration in kind.
The Chairman and CEO of Bankinter are beneficiaries of health
insurance policies underwritten with the Bank. The Bank pays the
corresponding premiums, which are attributed to the directors as
remuneration in kind.
The Bank also compensates the aforementioned directors, as applicable,
with other remuneration in kind, such as leasing of vehicles and other
corporate benefits applicable to the other employees.
A.11. State the remuneration accrued by the director by virtue of
payments made by the listed company to a third party to which
the director provides services, if such payments are intended to
provide remuneration for the services thereof in the company.
Bankinter’s directors have accrued no remuneration whatsoever for
this item.
A.12. Any item of remuneration other than those listed above, of
whatever nature and provenance within the group, especially
when it is deemed to be a related-party transaction or when the
making thereof detracts from a true and fair view of the total
remuneration accrued by the director.
Bankinter’s directors have accrued no remuneration whatsoever for
this item other than that mentioned above.
A.13. Explain the actions taken by the company regarding the
remuneration system in order to reduce exposure to excessive
risk and align it with the long-term targets, values, and
interests of the company, including any reference to: measures
provided to ensure that the remuneration policy takes into
account the long-term results of the company, measures
23
establishing an appropriate balance between the fixed and
variable components of remuneration, measures adopted with
respect to those categories of personnel whose professional
activities have a significant impact on the institution’s risk
profile, recovery formulas or clauses giving the right to demand
the return of the variable components of remuneration based on
results if such components have been paid based on data that is
later clearly shown to be inaccurate, and measures provided to
avoid any conflicts of interest.
The variable remuneration structure established by the Bank is
consistent with the principles of the regulatory provisions and
European regulations governing it. Said regulations require that the
remuneration policy be compatible with appropriate and effective risk
management, promote this type of management and offer no
incentives to assume risks that exceed the level of risk tolerated by the
credit institution. Bankinter’s remuneration policy satisfies the
aforementioned principles based on the following:
The incentive plan targets that shape the variable remuneration
are not indexed to individual and/or short-term targets, but rather
to the bank’s overall earnings before tax, thus incorporating, as
achievement parameters, all those risk elements that the
Institution needs to take into consideration, as well as the
corresponding evaluation elements for units, departments and the
achievement of individual targets in the appropriate proportion.
Bankinter’s remuneration policy is compatible with the institution’s
business strategy, targets, values and long-term interests.
In terms both absolute and in comparison with the sector, and
resulting from the studies carried out by Towers Watson for
Bankinter, both fixed and variable amounts that have been
received may be classified as moderate and prudent and in any case
in proportion to the annual earnings generated by the Bank, the
remuneration offered annually to shareholders, and earnings
retained to strengthen share capital each year.
There have been no cases in which individual accrual targets for
variable remuneration might act as encouraging the assumption of
risks not consistent with the Bank’s general risk profile because,
among other reasons, the targets are always primarily set in
reference to fulfilment of the Bank’s overall earnings before tax
target and, where applicable, to the specific targets of each
department or business centre, and only partially, and not always,
based on the fulfilment of individual targets. In any case, there are
24
rigorous separate and independent controls with relation to the
areas of greatest involvement with the markets, such as Treasury,
to ensure adequate management of the risk assumed at any time
and compliance with the investment framework established each
year by the Board of Directors.
The criteria for accrual of the variable items take into account
expected losses from that activity. The losses resulting from the
risks incurred in previous financial years necessarily affect the
annual fulfilment of group and individual targets.
The Bank has adequate and sufficient tools for the measurement
and monitoring of fulfilment of the variable remuneration system
targets.
The control areas have no variable remuneration indexed to
fulfilment of the objectives of the areas they control.
The Bank has no golden parachutes for the executive directors.
Under no circumstances are they entitled to receive severance
payments associated with circumstances or situations of change of
control at the institution. There are neither “golden parachutes” nor
guaranteed bonuses.
The composition of the Bank’s balance sheet, its levels of
delinquency and risk incurred, and the extremely prudent risk
management culture constitute a clear and evident display of
alignment of the bank’s remuneration systems with its desired
level of risk.
The composition of the Remuneration Committee, its duties and its
role in defining and approving the variable contribution systems
satisfies not only the regulatory provisions but also the principal
national and international Good Corporate Governance standards.
Each year an internal, central and independent assessment is
performed of the application of the remuneration policy, with a
view to verifying fulfilment of the remuneration standards and
procedures adopted by the Committee itself and the Board in this
regard.
Bankinter has established certain appropriate ratios among the
fixed and variable total remuneration components for members of
the identified group, which includes the executive directors, with
the following principles applying to them:
- The variable component shall not exceed 100% of the fixed
component of each individual’s total remuneration.
25
- Nevertheless, the Institution’s General Shareholders’ Meeting
may approve a level higher than stipulated in the preceding
section, provided it does not exceed 200% of the fixed
component.
Deferral: Notwithstanding the application of the principle of
proportionality as explained in the Institution’s remuneration
policy, a substantial portion of the variable remuneration
component, specifically 40%, shall be deferred over a period of
three years, correctly adjusting to the nature of the businesses,
their risks and the activities of the members of the identified group.
This deferred remuneration shall be paid over the three years
immediately following that of the receipt of the non-deferred
portion in thirds, and therefore the remuneration payable under
the deferral provisions will not be received more quickly than is
proportionate.
Payment in shares and holding periods: Notwithstanding
application of the principle of proportionality as set forth in the
Institution’s remuneration policy, a substantial share of the
variable remuneration component, specifically 50% of any variable
remuneration component, shall be delivered in Bankinter shares.
The provisions of this section shall apply both to the portion of the
variable component of deferred remuneration and to the portion of
the variable component of non-deferred remuneration.
The resulting amounts in cash and shares shall be paid net of taxes
(or withholdings).
By application of this section, Bankinter shares delivered to
members of the identified group, which includes the executive
directors, shall be subject to a holding policy of one year from
delivery, which is considered an appropriate practice for the
incentives to be consistent with the Institution’s long-term
interests.
Ex-post adjustments: The variable remuneration, including the
deferred portion, shall be paid or consolidated only if sustainable in
accordance with the financial situation of the Institution as a
whole, and if justified based on the results of the Institution, the
business unit and the individual in question.
Bankinter has established the following malus and clawback
clauses that will apply to up to 100% of the total variable
remuneration. They establish specific criteria that particularly
cover situations in which the employee has participated in or is
26
responsible for conduct that resulted in significant losses to the
Institution and in which the relevant requirements of suitability
and adjustment were violated.
- Deferred variable remuneration in both cash and shares that is
pending payment shall be subject to reduction by Bankinter if
any of the following circumstances occur during the period until
its consolidation:
- A reformulation of annual accounts that does not result
from a regulatory change, and provided that according to
the aforementioned reformulation, it results in variable
remuneration to be paid that is lower than that initially
accrued, or no payment of any remuneration whatsoever
has been made in accordance with Bankinter’s variable
remuneration system.
- If the accrual of the variable remuneration was due to
certain targets the fulfilment of which was achieved as a
direct or indirect consequence of:
Fraudulent action by the member of the identified
group.
The occurrence of circumstances that result in the
disciplinary dismissal of the employee in accordance
with applicable labour regulation or, if involving a
director, the occurrence of circumstances that result in
his or her removal from the position of director due to
breach of his or her duties, any actions or omissions
that cause harm to the Institution, or the occurrence of
the necessary circumstances for the Institution to be
able to take corporate liability action against him or
her.
The member of the identified group causing serious
harm to the Institution due to fraud or negligence.
The member of the identified group having been
sanctioned for a serious and fraudulent breach of any of
Bankinter’s internal standards that may apply.
The member of the identified group having been
punished for a violation of the organisation and
discipline standards under Title IV, Law 10/2014 of 26
June on the organisation, supervision and solvency of
credit institutions, classified as serious or very serious.
- If, as a consequence of an action attributable to the member
of the identified group, any of the following circumstances
occur:
27
Failure to meet the capital ratios legally established at
any time by applicable regulation, for a continuous
period greater than three (3) months.
Failure to meet the liquidity ratios legally established
at any time by applicable regulation, for a continuous
period greater than three (3) months.
Significant negative changes occurring to the
Institution’s risk profile due to actions taken at the
margin of the policies and limits approved by the
Committee.
The gross margin or earnings before and after tax (EBT
and EAT, respectively), after deducting the variable
remuneration owed, are negative.
The Institution’s operating costs are not covered due to
significant deterioration in financial margins or due to
a significant increase in general or personal expenses.
Notwithstanding the provisions of this clause, the circumstances
for the application of a “malus” may be modified, broadened or
adjusted depending on the relevant regulation that may be
established at any time or if Bankinter’s Board of Directors deems it
to be appropriate.
The variable remuneration already paid in both cash and shares to
members of the identified group, which includes the executive
directors, whether deferred or not, will be partially or wholly
recovered by Bankinter if, during the two years immediately after
its payment, it is clearly shown that the payment and, therefore,
the non-application of the adjustment mechanisms, occurred
partially or wholly based on information the falsity or serious
inaccuracy of which has been clearly demonstrated a posteriori, or
risks materialising that were assumed during the contingent
period, or other circumstances not provided for or assumed by the
Bank that have a material negative effect on the income
statements for any of the financial years applying thereto.
A decision by the Board of Directors that circumstances have
occurred that must cause the triggering of this clause and the
percentage to be returned to the Bank, as well as the procedure by
which the Bank will be able to reclaim a proportional return of the
amount paid or even offset it against other remuneration of any
kind the individual is entitled to receive, as well as the latter’s
obligation to repay to the Institution part or all of the amount, will
be consistent with the remuneration return policy applicable to the
identified group that the Bank has approved for these purposes.
28
Prohibition on hedging transactions: No personal hedging or
insurance strategies may be used concerning remuneration and
liability that impair the effects of alignment with sound
management of risks that its remuneration systems encourage.
Specifically, members of the identified group may not engage in
hedging transactions of any kind nor contract any insurance on
deferred variable remuneration that is pending payment as set
forth in relation to the deferral clause in the Institution’s
remuneration policy.
Nor may they engage in hedging transactions involving Bankinter
shares already delivered that are subject to the holding period.
B. OVERALL SUMMARY OF THE APPLICATION OF THE
REMUNERATION POLICY DURING THE YEAR JUST ENDED
B.1. Summarise the main features of the structure and items of
remuneration from the remuneration policy applied during the
financial year just ended, which give rise to the breakdown of
individual remuneration accrued by each of the directors as
reflected in Section C of this report, and provide a summary of
the decisions made by the board to apply such items.
An overall summary of the application of the remuneration policy for the
last financial year (2015) is set out below.
i) Remuneration of directors for duties of supervision and collective
decision-making:
According to the report submitted to the shareholders at the 2015
Ordinary General Shareholders’ Meeting on a consultative basis and
approved by the same, total remuneration received on an individual
basis has been paid by means of the following remuneration items, both
established in the institution’s By-Laws: i) annual fixed allotment for
membership on the Board of Directors and performance of their duties as
chairs of their committees, and ii) attendance fees for meetings of the
Board and of the committees thereof.
No variable remuneration whatsoever has been received for the exercise
of these duties.
Thus, the amounts received for the remuneration items noted above are
as described below:
Annual fixed allotment:
29
- Chairman: 170,000 euros annually.
- The executive directors: 150,000 euros annually.
- Other members of the Board: 85,000 euros annually.
- Chairmen of any of the Committees: Additional 15,000 euros
annually.
Attendance fees, to be paid after each meeting:
- Board of Directors: 2,000 euros per meeting to the Chairman of
the Board and 1,500 euros per meeting to the members.
- Committees: 1,500 euros per meeting to the Chairman of the
Board and 1,000 euros per meeting to the members.
No shares, option rights thereon or remuneration indexed to the value
of the shares were delivered during 2015.
In 2015, the Independent Directors Mr Gonzalo de la Hoz Lizcano and
Mr Rafael Mateu de Ros received the sums of 25,500 euros and 15,000
euros, respectively, as fees for attending the meetings of the Board of
Directors of Línea Directa Aseguradora, S.A.. The sum received by Mr
Gonzalo de la Hoz Lizcano includes attendance fees as member of both
the Board of Directors and the Control Committee of Línea Directa
Aseguradora. Mr Gonzalo de la Hoz Lizcano is also Non-Executive
Chairman of Bankinter Global Services, S.A., a Group technology
services and operations company, and received fees in the amount of
7,200 euros for attending meetings of the Board of Directors in 2015.
As regards the remuneration of members of Bankinter’s Board of
Directors, the section on remuneration of the Board of Directors in the
legal note on Bankinter and its Group contains an individualised
breakdown of the remuneration accrued by all directors in 2015 (which
is included as an exhibit to this report).
At year-end 2015, the number of directors of Bankinter S.A. was the
same as at year-end 2014, that is, 10 directors.
ii) The fixed remuneration received by the Chairman of the Board of
Directors for performing the non-executive institutional duties (as
described in section A.3 above) additional to those he performs in his
capacity as Chairman of the decision-making body, the latter
remunerated according to the structure in the preceding point,,
amounted to 630,000 euros per year.
iii) Remuneration of executive directors for their executive duties:
30
In addition to the remuneration received for performance in their
capacity as mere directors, in 2015 the Executive Directors accrued
remuneration (for their executive services) in the following amounts:
As fixed remuneration:
- CARTIVAL, S.A., Executive Vice-Chairman of Bankinter, received a
total of 520,884 thousand euros as fixed remuneration.
- María Dolores Dancausa Treviño, CEO of Bankinter, received a total
of 701,190 thousand euros as fixed remuneration.
As variable remuneration:
The system of annual variable remuneration of the executive directors
is the same as that applied to the rest of the workforce of the Bankinter
Group receiving this type of remuneration.
As already indicated in the director remuneration report approved by
the shareholders at the General Shareholders’ Meeting of last year,
such annual variable remuneration is linked to the achievement of the
Group’s banking activity results target, in terms of earnings before tax,
as approved by the Board of Directors at the proposal of the
Remuneration Committee. Each of the executive Directors was
assigned an amount in the case of meeting 100% of the established
target. However, the accrual of this variable incentive occurs from the
achievement of 80% of the target and up to a maximum of 120%
thereof, it being possible to receive between 70% and 120% of the
variable amount assigned to each of the beneficiaries according to the
aforementioned achievement percentages. In 2015, the achievement
percentage was 102.43% (in 2014, it was 120%).
The annual variable remuneration accrued in 2015 was also directly
linked to other targets: i) the indicator of overall external quality
perceived by the customer (using the NPS, or Net Promoter Score,
which measures the preparedness of customers to recommend an
institution, rated on a scale from 0 to 10 as Promoters, Passives and
Detractors; and it is calculated by subtracting the percentage of
Detractor customers (scores between 0 and 6) from the percentage of
Promoter customers (scores 9 and 10), meaning the resulting amount
may vary between -100% and 100%), and ii) the solvency ratio (CET1)
of the institution. Each of these indicators independently accounted for
the payment of 10 per cent of the variable remuneration, varying
between zero and one hundred within this percentage of variable
remuneration subject to the achievement of such targets. In 2015, the
achievement percentage was 100% for both indicators, for which
reason the amount of variable remuneration to be received for the EBT
31
(Earnings Before Tax) target was not reduced, such that the final
achievement percentage was the aforementioned 102.43%.
The annual variable remuneration accrued in 2015 will be paid 50% in
cash and 50% in shares, part in 2016 and the deferred portion over
three years, as follows:
- 60% of the annual variable remuneration will be paid in 2016, in
halves and net of taxes, in cash and shares.
- The remaining 40% will be deferred in thirds and will be paid, if
applicable, in the following financial years (through 2019). The
corresponding amount will be paid each year net of taxes, half in
cash and half in shares.
In any event, in the case of Executive Directors, the deliveries of shares
are conditional upon their approval by the shareholders at Bankinter’s
General Shareholders’ Meeting to be held in 2016 (the year following
the year of accrual), as required by section 219 of the Companies Act.
A description of the amounts accrued during 2015 by the company’s
the executive directors is set out below:
At the end of financial year 2015, the achievement percentage was
102.43%, which led to the accrual of a variable incentive of 161,289
euros for the executive Vice-Chairman and of 228,038 euros for the
Chief Executive Officer, which will be paid in the form and over the
terms indicated below::
o In cash (the gross accrued amounts are set out below; such
amounts will be paid net of tax):
- 50% of the non-deferred variable remuneration accrued under
the variable incentive in 2015: 48,387 euros to the executive
Vice-Chairman of the Board and 68,411 euros to the Chief
Executive Officer.
- 50% of the deferred variable remuneration accrued under the
variable incentive in 2015 will be paid in shares:
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2017: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
Executive Officer.
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2018: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
Executive Officer.
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2019: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
32
Executive Officer.
o In shares (as stated above, conditional upon the approval of the
shareholders at the General Shareholders’ Meeting). The maximum
number of shares to be delivered is as set out below, calculated on
the gross accrued amounts:
o 50% of the non-deferred variable remuneration accrued under
the variable incentive in 2015: 7,844 shares to the executive
Vice-Chairman and 11,091 shares to the Chief Executive
Officer, at a price of 6.1680769 euros/share, this being the
average listing price of the Bankinter share at the close of
business for the trading sessions held between 4 January and
20 January 2016, both inclusive. If the shareholders at the
General Shareholders’ Meeting that is held in 2016 approve the
aforementioned delivery of shares, the shares will be delivered
within 5 trading days following the approval.
o 50% of the deferred variable remuneration accrued under the
variable incentive in 2015 will be paid in shares; taking into
account that the share reference price to obtain the amount of
shares to be delivered is the same as that stated above
(6.1680769 euros/share), the amounts to be received in the
coming years are broken down below:
Executive Vice-Chairman:
- 1,743 shares will be delivered in the month of January
2017, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 1,743 shares will be delivered in the month of January
2018, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 1,743 shares will be delivered in the month of January
2019, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
Chief Executive Officer:
33
- 2,464 shares will be delivered in the month of January
2017, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 2,464 shares will be delivered in the month of January
2018, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 2,464 shares will be delivered in the month of January
2019, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
In short, the sum of the amounts accrued by the executive directors (for
their executive duties) in 2015 was a total of 1,611 thousand euros. In
2014, it was 1,597 thousand euros.
During 2015, delivery was made to the executive Directors of the shares
corresponding to the deferred variable remuneration accrued in 2011,
2012 and 2013, as well as of the shares corresponding to the
immediate delivery of the remuneration accrued in 2014, according to
the resolutions approved by the shareholders at the General
Shareholders’ Meetings held in 2012, 2013, 2014 and 2015,
respectively. The section on director remuneration in the individual
legal note for Bankinter and for the consolidated Group for financial
year 2015 includes an itemised description of the deliveries made
during 2015:
C. BREAKDOWN OF INDIVIDUAL REMUNERATION ACCRUED BY EACH
OF THE DIRECTORS
Name Type Accrual period 2015
Pedro Guerrero Guerrero Other external From 01/01/2015 to 31/12/2015
CARTIVAL, S.A. Executive From 01/01/2015 to 31/12/2015
María Dolores Dancausa Treviño Executive From 01/01/2015 to 31/12/2015
Fernando Masaveu Herrero Proprietary From 01/01/2015 to 31/12/2015
Marcelino Botín-Sanz de Sautuola y Naveda Proprietary From 01/01/2015 to 31/12/2015
Rafael Mateu de Ros Cerezo. Independent From 01/01/2015 to 31/12/2015
Rosa María García García Independent From 18/03/2015 to 31/12/2015
Jaime Terceiro Lomba Independent From 01/01/2015 to 31/12/2015
Gonzalo de la Hoz Lizcano Independent From 01/01/2015 to 31/12/2015
María Teresa Pulido Mendoza Independent From 01/01/2015 to 31/12/2015
John de Zulueta Greenebaum Independent From 01/01/2015 to 18/03/2015
34
C.1. Complete the following tables regarding the itemised
remuneration of each of the directors (including remuneration
for the performance of executive duties) accrued during the
financial year.
a) Accrued remuneration at the company covered by this report:
i) Cash remuneration (thousands of €)
Name/Type/accrua
l period 2015
Salary Fixed
remuneration
Attend
ance
fees
Short-term
variable
remuneratio
n
Long-term
variable
remuneratio
n
Remuneration
for belonging
to committees
of the board
Termination
benefits
Others Total
2015
Total 2014
Pedro
Guerrero
Guerrero
0 800 34 0 0 0 0 3 837 817
CARTIVAL,
S.A.
521 165 35 161 0 0 0 0 882 859
María Dolores
Dancausa
Treviño
701 150 27 228 0 0 0 5 1,111 1,093
Fernando
Masaveu
Herrero
0 85 32 0 0 0 0 0 117 121
Marcelino
Botín-Sanz de
Sautuola y
Naveda
0 85 20 0 0 0 0 0 105 84
Rafael Mateu
de Ros Cerezo.
0 100 60 0 0 0 0 0 160 158
Rosa María
García García
0 75 17 0 0 0 0 0 92 0
Jaime
Terceiro
Lomba
0 100 59 0 0 0 0 0 159 156
Gonzalo de la
Hoz Lizcano
0 100 52 0 0 0 0 0 152 130
María Teresa
Pulido
Mendoza
0 85 18 0 0 0 0 0 103 39
John de
Zulueta
Greenebaum
0 25 15 0 0 0 0 0 40 127
ii) Share-based remuneration systems
35
iii) Long-term savings systems
Name/Type/total
accrual period in
years
Contribution for the year by the
Company (€ thousands)
Amount of accumulated funds (€
thousands)
Financial Year
2015
Financial Year
2014
Financial Year
2015
Financial Year
2014
María Dolores
Dancausa Treviño
0 0 600 600
iv) Other benefits (in thousands of €)
Remuneration in the form of advances, loans
Name/Type Interest rate for the
transaction
Main features of the
transaction
Amounts potentially
returned
Life insurance premiums Guarantees provided by the
company in favour of the directors
Name/Type Financial Year
2015
Financial Year
2014
Financial Year
2015
Financial Year
2014
Pedro Guerrero
Guerrero
1.19 0.49 0 0
María Dolores
Dancausa
Treviño
0.42 0.15 0 0
Name/Type/acc
rual period
2015
Name of Plan
and date of
implementatio
n
Ownership of options at beginning of 2015
Options allocated during 2015
Shares delivered in
2015
No. of
options
No.
shares
affected
Exercise
price (€)
Exercise
period
No. of
options
No. shares
affected
Exercise
price (€)
Exercise
period
Conditions
for exercise
No
.
Price Amo
unt
Options exercised during 2015
Options
expired
and not
exercised
Options at end of 2015
Name/Type/acc
rual period
2015
Name of Plan
and date of
implementatio
n
No. of
options No.
shares
affected
Exercise
price (€) Gross
Profit (€) No. of
options No. of
options No. shares
affected Exercise
price (€) Exercise
period Other
requireme
nts for
exercise
36
b) Remuneration accrued by directors of the company for belonging to
boards at other companies of the group:
i) Cash remuneration (thousands of €)
Name/Type/accrua
l period 2015
Salary Fixed
remuneration
Attend
ance
fees
Short-term
variable
remuneratio
n
Long-term
variable
remuneratio
n
Remuneration
for belonging
to committees
of the board
Termination
benefits
Others Total
2015
Total
2014
Rafael Mateu
de Ros Cerezo.
0 0 15 0 0 0 0 0 15 7
Gonzalo de la
Hoz Lizcano
0 0 33 0 0 0 0 0 33 19
ii) Share-based remuneration systems
iii) Long-term savings systems
iv) Other benefits (in thousands of €)
c) Summary of remuneration (in thousands of €): The summary must
include the amounts for all items of remuneration included in this
report that have been accrued by the director, in thousands of euros.
In the case of long-term saving systems, include contributions or
funding for these types of systems:
Name/Type
Accrued remuneration at the Company Accrued remuneration at companies of the group Totals
Total cash
remunerat
ion
Amount
of shares
provided
Gross profit
on options
exercised
Total
financial
year 2015
company
Total cash
remuneratio
n
Amount
of shares
provided
Gross profit
on options
exercised
Total
2015
group
Total
2015
Total 2014 Contribution
to savings
systems
during the
year
Pedro
Guerrero
Guerrero
837 0 0 837 0 0 0 0 837 817 0
CARTIVAL,
S.A.
882 0 0 882 0 0 0 0 882 859 0
María
Dolores
1,111 0 0 1,111 0 0 0 0 1,111 1,093 0
37
C.2 Report the relationship between remuneration obtained by the
directors and the results or other indicators of the institution’s
performance, explaining how any changes in the company’s
performance may have influenced changes in the remuneration
of the directors.
As noted throughout the report, only the executive directors receive
variable remuneration which is indexed to, among other factors, the
Bank’s earnings before tax. In this regard, note that there are no cases
in which the individual targets for accrual of variable remuneration
may act as encouraging the assumption of risks not consistent with the
Bank’s general risk profile because, among other reasons, the targets
are always set primarily in reference to fulfilment of the Bank’s overall
earnings before tax target.
Dancausa
Treviño
Fernando
Masaveu
Herrero
117 0 0 117 0 0 0 0 117 121 0
Marcelino
Botín-Sanz
de Sautuola
y Naveda
105 0 0 105 0 0 0 0 105 84 0
Rafael
Mateu de
Ros Cerezo.
160 0 0 160 15 0 0 15 175 165 0
Rosa María
García
García
92 0 0 92 0 0 0 0 92 0 0
Jaime
Terceiro
Lomba
159 0 0 159 0 0 0 0 159 156 0
Gonzalo de
la Hoz
Lizcano
152 0 0 152 33 0 0 33 185 149 0
María
Teresa
Pulido
Mendoza
103 0 0 103 0 0 0 0 103 39 0
John de
Zulueta
Greenebau
m
40 0 0 40 0 0 0 0 40 127 0
38
C.3 Report the results of the consultative vote of the shareholders on
the annual remuneration report for the preceding financial year,
indicating the number of votes against, if any:
Number % of total
Votes cast 657,537,786 73.16
Number % of votes cast
Votes against 143,329,194
21.80
Votes in favour 508,939,092
77.40
Abstentions 5,253,384
0.80
D. OTHER INFORMATION OF INTEREST
If there are any significant aspects regarding director remuneration
that could not be included in the other sections of this report, but
should be included in order to provide more complete and well-
reasoned information regarding the remuneration structure and
practices of the company with respect to its directors, briefly describe
them.
Extraordinary remuneration accrued in 2013:
In January 2013, at the proposal of the then Appointments and
Remuneration Committee, Bankinter’s Board of Directors approved
contingent extraordinary remuneration for a group of individuals (40 from
the institution) including the Executive Vice-Chairman and CEO, which it
reported at the General Shareholders’ Meeting of March 2013, through the
director remuneration report submitted for a consultative vote at the General
Shareholders’ Meeting.
This extraordinary remuneration was accrued in its entirety in 2013, with its
payment subject to the fulfilment of certain conditions. Upon confirming said
fulfilment, the beneficiaries of said remuneration, including the executive
directors, will receive the amount in cash or in shares during 2016, as
described below.
39
It is important to note that this does not involve any increase whatsoever in
the total annual remuneration accrued by its beneficiaries in 2015 and 2016,
as it is a payment that corresponds to an accrual that occurred in the last
financial year and is not consolidated in the annual remuneration for future
financial years.
Said extraordinary remuneration recognised and remunerated, on one hand,
the positive results of the group management carried out in the preceding
years, in a context of general crisis, with special recognition for Bankinter
overcoming the recent capital and solvency challenges, and on the other
hand, individual management during this period by a number of persons,
whose direct and indirect responsibility and contribution through their teams
was decisive for the Bank’s income statement. It further took into account the
prudence with which the institution was generally managed. Said dedication
and success in prudently managing the institution during the years of the
financial crisis permitted Bankinter to successfully pass the Spanish banking
stress tests without the need for capital increases or other ad hoc measures.
Thus, extraordinary remuneration was approved of twice the beneficiary’s
fixed salary as at 31 December 2012, which was accrued at the same time as
its approval. The amounts accrued by the executive directors in 2013 were the
following:
- Executive Vice-Chairman: 720,000 euros.
- CEO: 1,200,000 euros.
Although not long-term variable remuneration, but rather remuneration
accrued a single time only, that is, a one-off payment, a three-year deferral
was applied (“contingency period”) to ensure that at the time of its payment
no risks or losses had appeared that were not anticipated or acceptable under
other circumstances that, had they occurred prior to approval of the
remuneration, would have prevented its accrual.
Taking the above into account, the payment of said extraordinary variable
remuneration was subject to the following conditions:
- Earnings before Tax (EBT) Target: Thirty-five per cent of the
extraordinary remuneration was contingent upon exceeding 100% of the
EBT target (banking activity) proposed by the then Appointments and
Remuneration Committee and approved by the Board of Directors for
each year. The adjustment percentages according to the level of
achievement of this target were also set by the Board of Directors each
financial year, as shown in the table below:
40
% Compliance % Incentive
Accrual
100 50
102 60
104 70
106 80
108 90
110 100
The EBT-based adjustment mechanism was therefore independent each
year, and thus, after the application of any necessary adjustment, said
amount would be consolidated each year.
According to the EBT targets proposed by the Committee for each year as
shown below, the achievement and accrual percentages for this target
are as follows:
Year EBT Target
(in millions of
euros)
% final compliance
reached
% final incentive
accrual
2013 190 100 50
2014 230 121.7 100
2015 391 102.4 62.15
- ROE Target: Sixty-five per cent of the extraordinary remuneration was
contingent upon meeting the ROE (return on capital in banking activity)
target in the form set forth below:
Annually: ROE must be above the mid-point of the peer group at 31
December of each year. The annual adjustment is made to one third
of the 65% previously identified (annual ROE amount). In this
41
regard, it must be noted that over the past three years (2013, 2014
and 2015) ROE has successfully been above the mid-point for the
peer group, comprising Banco Sabadell, Banco Popular, La Caixa,
Unicaja and Kutxabank, and thus the annual adjustment was not
triggered by this mechanism.
Additionally: the minimum ROE at 31 December 2015 could not be
less than 10%. In this case, there would be an adjustment to 100% of
the 65% even if the annual targets had been met (total ROE
amount), and therefore if it had been below said 10%, no sum
whatsoever would have been received from this portion of the
extraordinary remuneration on the payment date. At 31 December
2015, ROE was 10.91%, above the target rate of 10%, and therefore
this adjustment mechanism was again not triggered.
As noted above, the percentages of payment of the extraordinary
remuneration for each of the years as well as the resulting final percentage
are below, taking into account that the ROE achieved at 31 December 2015
exceeded 10%.
Year 2013 2014 2015 % final
payment
EBT 5.83% 11.68% 7.23% 24.75%
ROE Payment
of 1/3 of
65%
Payment
of 1/3 of
65%
Payment
of 1/3 of
65%
65%
Total 89.74%
That is, each beneficiary of the plan will ultimately receive 89.75% of the
accrued value of this extraordinary remuneration.
Fifty per cent of this extraordinary remuneration will be delivered in
Bankinter shares. To that end, in March 2016 this delivery of shares to the
executive directors and members of the institution’s senior management who
are also beneficiaries of this remuneration will be submitted to a vote as a
separate item on the agenda of the General Shareholders’ Meeting.
42
The aforementioned agreement breaks down the number of shares to be
delivered and the value used to calculate them.
If applicable, Bankinter shares that are delivered to beneficiaries of the
extraordinary remuneration will be subject to a holding policy for one year
from their delivery, during which the shares may not be traded.
The Bank may also claim the proportional return of the amount paid or even
offset it against other remuneration of any kind that the beneficiary is
entitled to receive, if it is clearly shown that the payment (and therefore the
non-application of the adjustment mechanisms) occurred partially or wholly
based on information the falsity or serious inaccuracy of which has been
clearly demonstrated a posteriori, or risks materialising that were assumed
during the contingent period, or other circumstances not provided for or
assumed by the Bank that have a material negative effect on the income
statements for either of the two years of the clawback period. If applicable, the
Board of Directors shall determine whether any circumstances have occurred
that might cause the triggering of this clause, and the percentage that must
be returned to the Bank.
Finally, in order to be paid this amount it was an absolute condition to be part
of and active in the group on the payment date (31 December 2015) and not
to have lost the level of duties or responsibilities on which accrual of the
remuneration was based.
Breakdown of remuneration received by directors for membership on
boards of directors of Group companies:
With regard to the statements in section A.3 above, a breakdown of
remuneration to be received by the directors Mr Gonzalo de la Hoz Lizcano
and Mr Rafael Mateu de Ros for their membership on boards of other group
companies is set forth below:
In their capacity as non-executive directors, Mr Gonzalo de la Hoz
Lizcano and Mr Rafael Mateu de Ros will receive the sums of 25,000 euros
and 15,000 euros, respectively, as fees for attending meetings of the Board
of Directors of Línea Directa Aseguradora, S.A. The amount received by Mr
Gonzalo de la Hoz Lizcano includes fees as member of both the Board of
Directors and the Control Commission of Línea Directa Aseguradora. In
addition, Mr Gonzalo de la Hoz Lizcano is Chairman of Bankinter Global
Services, S.A., a group technology services and operations company, and
43
will receive the sum of 7,200 euros as fees for attending the meetings of
the Board of Directors.
In addition, as supplementary information and though it does not apply to
this report, by virtue of the Bank’s commitment to maximum
transparency, we note that Mr Alfonso Botín-Sanz de Sautuola y Naveda,
representing the corporate director CARTIVAL, S.A. on Bankinter’s Board of
Directors, is personally Executive Chairman of Línea Directa Aseguradora,
S.A. Compañía de Seguros y Reaseguros, a wholly-owned subsidiary of the
bank, and accrued 166,950 euros as fixed remuneration and 61,227 euros
as annual variable remuneration as remuneration for his executive duties
as Chairman of the aforementioned subsidiary in 2015. In addition, on 31
December 2015 he accrued a long-term incentive approved by the Board of
Directors of the subsidiary company three years previously, in the gross
amount of 236,100 euros.
This annual remuneration report was approved by the board of directors of
the company at its meeting of 16/02/2016.
State whether any directors voted against or abstained in connection with
the approval of this Report.
Yes No X
Individual or company name of the
members of the board of directors
who did not vote in favour of approval
of this report
Reasons (opposed,
abstained, absent)
Explain the reasons
44
Anexo.- Legal Note on Remuneration of and Balances Payable to Members of
the Board of Directors
Remuneration of the Board of Directors
On 18 March 2015, Bankinter submitted the director remuneration report,
with the structure established in Circular 4/2013, of 12 June, of the National
Securities Market Commission (Comisión Nacional del Mercado de Valores), to
its shareholders at its General Shareholders’ Meeting for a consultative vote,
which report included information on its general policy in this regard, its
application to financial year 2014 and the remuneration system applicable to
financial year 2015. While this practice has only been obligatory since 2014,
Bankinter has submitted this report to the shareholders at its General
Shareholders’ Meeting since 2008, following the recommendations of the
Good Governance Code of Listed Companies.
The director remuneration report was approved by 77.40% of the total share
capital represented in person and by proxy at the aforementioned General
Shareholders’ Meeting of 2015 (96.51% at the General Shareholders’ Meeting
of 2014) and contained, among other information, the director remuneration
for financial year 2015, which is described and broken down in this note.
i) Director remuneration for the performance of their duties in their
capacity as such:
According to the By-laws of Bankinter, the directors may be remunerated for
the performance of their duties as directors via the following items:
- Fixed annual amount,
- Fees for attendance at meetings of the Board of Directors and of the
Committees of the Board of Directors to which they belong,
- Delivery of shares, acknowledgement of share option rights or
remuneration linked to the value of the shares, upon the corresponding
prior approval of a resolution by the shareholders at the General
Shareholders’ Meeting regarding number, price and other items
established by law.
The shareholders at the General Shareholders’ Meeting of 18 March 2015
resolved, pursuant to sections 217 and 529 septdecies of the Companies Act
(Ley de Sociedades de Capital), to establish the maximum amount of annual
remuneration of the directors for the performance of their duties as such in
the amount of 1,600,000 euros, which amount shall remain in effect for so
long as the modification thereof is not approved by the shareholders at the
general shareholders’ meeting.
45
Upon a proposal of the Remuneration Committee, the Board of Directors
established the specific amount corresponding to each of the directors, in line,
when legally applicable, with the resolution of the shareholders at the
General Shareholders’ Meeting.
The total individual remuneration received for financial year 2015 was paid
via: i) a fixed annual payment for their membership on the Board of Directors
and the performance of their duties as chairmen of its committees; and (ii)
fees for attendance at the meetings of the Board and of its committees, such
that there was no delivery of Bankinter shares as remuneration during this
year.
The remuneration of the non-executive directors does not include variable
components, insofar as obtaining it is not subject to the achievement of
targets, thereby complying with corporate governance recommendations in
this respect.
At year-end 2015, the number of directors of Bankinter, S.A. remained at 10,
as at the end of the two previous years.
With regard to the remuneration of the members of Bankinter’s Board of
Directors, the individualised breakdown of the total remuneration received in
their capacity as directors (supervision and collective decision-making duties)
for financial years 2015 and 2014 is as follows:
In Euros
Directors 2015 2014
Pedro Guerrero Guerrero 204,000 206,800
María Dolores Dancausa Treviño 177,500 165,880
Cartival, S.A. 199,500 182,820
Marcelino Botín-Sanz de Sautuola y Naveda 105,000 84,275
Fernando Masaveu Herrero 117,000 121,141
Rosa María García García (1)
91,500 -
Gonzalo de la Hoz Lizcano 151,500 130,134
Jaime Terceiro Lomba 159,000 155,883
María Teresa Pulido Mendoza (2)
103,000 39,685
Rafael Mateu de Ros Cerezo 159,500 158,101
Ex-directors (3)
40,000 176,009
1,507,500 1,420,728 (1)
Rosa María García García was appointed external independent
director of Bankinter by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (2) María Teresa Pulido Mendoza was appointed director of Bankinter
on an interim basis on 23 July 2014, such appointment being
subsequently ratified by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (3) Within the category of ex-directors, the amounts included in the
table for financial years 2015 and 2014 correspond to those received
by Pedro González Grau, who ceased to be a director of Bankinter on
25 April 2014, and John de Zulueta Greenebaum, who ceased to be a
director of Bankinter on 18 March 2015.
46
The overall amounts set out in the above table corresponding to each director
in their capacity as such, as fixed remuneration and fees for attendance at the
meetings of the Board of Directors and of the Committees of the Board during
financial years 2015 and 2014, are broken down below in an individualised
form and by item:
In Euros
Directors
2015 2014
Fixed Remuneration
Attendance
Fees
Fixed
Remuneration
Attendance
Fees
Pedro Guerrero Guerrero 170,000 34,000 72,160 90,640
María Dolores Dancausa Treviño 150,000 27,500 54,120 78,760
Cartival, S.A. 165,000 34,500 54,120 95,700
Marcelino Botín-Sanz de Sautuola y
Naveda 85,000 20,000 36,080 26,195
Fernando Masaveu Herrero 85,000 32,000 36,080 63,061
Rosa María García García (1)
75,000 16,500 - -
Gonzalo de la Hoz Lizcano 100,000 51,500 36,080 72,054
Jaime Terceiro Lomba 100,000 59,000 36,080 97,803
María Teresa Pulido Mendoza (2)
85,000 18,000 16,400 13,600
Rafael Mateu de Ros Cerezo 100,000 59,500 36,080 100,021
Ex-directors (3)
25,000 15,000 49,200 92,298
Subtotals 1,140,000 367,500 426,400 730,132
Total 1,507,500 1,156,532 (1)
Rosa María García García was appointed external independent
director of Bankinter by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (2) María Teresa Pulido Mendoza was appointed director of Bankinter
on an interim basis on 23 July 2014, such appointment being
subsequently ratified by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (3) Within the category of ex-directors, the amounts included in the
table for financial years 2015 and 2014 correspond to those received
by Pedro González Grau, who ceased to be a director of Bankinter on
25 April 2014, and John de Zulueta Greenebaum, who ceased to be a
director of Bankinter on 18 March 2015.
As previously stated, since 1 January 2015 there have been no deliveries of
shares to directors as remuneration in their capacity as such, for which reason
the individualised breakdown of the deliveries of shares to directors in their
capacity as such for financial years 2015 and 2014 is as follows:
47
Directors
2015 2014
Amounts
Invested
No. of
Shares
Delivered
Amounts
Invested
No. of Shares
Delivered
Pedro Guerrero Guerrero 0 0 44,000 7,199
María Dolores Dancausa Treviño 0 0 33,000 5,399
Cartival, S.A. 0 0 33,000 5,399
Marcelino Botín-Sanz de Sautuola y Naveda 0 0 22,000 3,598
Fernando Masaveu Herrero 0 0 22,000 3,598
Rosa María García García (1)
0 0 - -
Gonzalo de la Hoz Lizcano 0 0 22,000 3,598
Jaime Terceiro Lomba 0 0 22,000 3,598
María Teresa Pulido Mendoza (2)
0 0 9,685 1,499
Rafael Mateu de Ros Cerezo 0 0 22,000 3,598
Ex-directors (3)
0 0 34,511 4,883
0 0 264,196 42,369 (1) Rosa María García García was appointed external independent
director of Bankinter by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (2) María Teresa Pulido Mendoza was appointed director of Bankinter
on an interim basis on 23 July 2014, such appointment being
subsequently ratified by the shareholders at the General
Shareholders’ Meeting held on 18 March 2015. (3) Within the category of ex-directors, the amounts included in the
table for financial years 2015 and 2014 correspond to those received
by Pedro González Grau, who ceased to be a director of Bankinter on
25 April 2014, and John de Zulueta Greenebaum, who ceased to be a
director of Bankinter on 18 March 2015.
ii) Fixed Remuneration of the Chairman of the Board of Directors for the
performance, since January 2013, of non-executive institutional duties
(described in section A.3 of the director remuneration report) additional
to those which he performs in his capacity as Chairman of the collective
decision-making body, the latter being remunerated as described in the
preceding item. The amount of this remuneration was 630,000 euros for
2015 (for 2014, the amount of such remuneration was 600,000 euros).
The Chairman of the Board of Directors does not receive any variable
remuneration, for the same reasons stated in the preceding item with
regard to non-executive directors.
iii) Remuneration of executive directors for their executive duties
During 2015, the executive directors accrued the following amounts as
remuneration for their activity, approved by the Board of Directors upon a
proposal of the then Appointments and Remuneration Committee
(currently the Remuneration Committee):
Fixed Remuneration:
48
- CARTIVAL, S.A., executive Vice-Chairman of Bankinter, received
a total of 521 thousand euros as fixed remuneration.
- María Dolores Dancausa Treviño, Chief Executive Officer of
Bankinter, received a total of 701 thousand euros as fixed
remuneration.
Variable Remuneration:
The annual variable remuneration system for the executive Directors is
the same as that applied to the rest of the workforce of the Bankinter
Group that receives this type of remuneration.
As already indicated in the director remuneration report approved by
the shareholders at the General Shareholders’ Meeting of last year,
such annual variable remuneration is linked to the achievement of the
Group’s banking activity results target, in terms of earnings before tax,
as approved by the Board of Directors at the proposal of the
Remuneration Committee. Each of the executive Directors was
assigned an amount in the case of meeting 100% of the established
target. However, the accrual of this variable incentive occurs from the
achievement of 80% of the target and up to a maximum of 120%
thereof, it being possible to receive between 70% and 120% of the
variable amount assigned to each of the beneficiaries according to the
aforementioned achievement percentages. In 2015, the achievement
percentage was 102.43% (in 2014, it was 120%).
The annual variable remuneration accrued in 2015 was also directly
linked to other targets: i) the indicator of overall external quality
perceived by the customer (using the NPS, or Net Promoter Score,
which measures the preparedness of customers to recommend an
institution, rated on a scale from 0 to 10 as Promoters, Passives and
Detractors; and it is calculated by subtracting the percentage of
Detractor customers (scores between 0 and 6) from the percentage of
Promoter customers (scores 9 and 10), meaning the resulting amount
may vary between -100% and 100%), and ii) the solvency ratio (CET1)
of the institution. Each of these indicators independently accounted for
the payment of 10 per cent of the variable remuneration, varying
between zero and one hundred within this percentage of variable
remuneration subject to the achievement of such targets. In 2015, the
achievement percentage was 100% for both indicators, for which
reason the amount of variable remuneration to be received for the EBT
(Earnings Before Tax) target was not reduced, such that the final
achievement percentage was the aforementioned 102.43%.
The annual variable remuneration accrued in 2015 will be paid 50% in
cash and 50% in shares, part in 2016 and part deferred over three
years, as follows:
49
- 60% of the annual variable remuneration will be paid in 2016, in
halves and net of tax, in cash and in shares.
- The remaining 40% will be deferred in thirds, and will be paid, if
applicable, in the following financial years (until financial year
2019). In each year, the corresponding amount will be paid, net of
tax, half in cash and half in shares.
In any event, in the case of Executive Directors, the deliveries of shares
are conditional upon their approval by the shareholders at Bankinter’s
General Shareholders’ Meeting to be held in 2016 (the year following
the year of accrual), as required by section 219 of the Companies Act.
The amounts accrued by the company’s executive Directors during
2015 are set out below:
At the end of financial year 2015, the achievement percentage was
102.43%, which led to the accrual of a variable incentive of 161,289
euros for the executive Vice-Chairman and of 228,038 euros for the
Chief Executive Officer, which will be paid in the form and over the
terms indicated below:
o In cash (the gross accrued amounts are set out below; such
amounts will be paid net of tax):
- 50% of the non-deferred variable remuneration accrued under
the variable incentive in 2015: 48,387 euros to the executive
Vice-Chairman of the Board and 68,411 euros to the Chief
Executive Officer.
- 50% of the deferred variable remuneration accrued under the
variable incentive in 2015 will be paid in cash:
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2017: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
Executive Officer.
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2018: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
Executive Officer.
1/3 of 50% of the deferred variable remuneration accrued
under the variable incentive in 2015 will be paid in
January 2019: 10,753 euros to the executive Vice-
Chairman of the Board and 15,202 euros to the Chief
Executive Officer.
o In shares (as stated above, conditional upon the approval of the
shareholders at the General Shareholders’ Meeting). The maximum
number of shares to be delivered is as set out below, calculated on
50
the gross accrued amounts:
o 50% of the non-deferred variable remuneration accrued under
the variable incentive in 2015: 7,844 shares to the executive
Vice-Chairman and 11,091 shares to the Chief Executive
Officer, at a price of 6.1680769 euros/share, this being the
average listing price of the Bankinter share at the close of
business for the trading sessions held between 4 January and
20 January 2016, both inclusive. If the shareholders at the
General Shareholders’ Meeting that is held in 2016 approve the
aforementioned delivery of shares, the shares will be delivered
within 5 trading days following the approval.
o 50% of the deferred variable remuneration accrued under the
variable incentive in 2015 will be paid in shares; taking into
account that the share reference price to obtain the amount of
shares to be delivered is the same as that stated above
(6.1680769 euros/share), the amounts to be received in the
coming years are broken down below:
Executive Vice-Chairman:
- 1,743 shares will be delivered in the month of January
2017, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 1,743 shares will be delivered in the month of January
2018, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.1,743 shares will be delivered in the month of
January 2019, corresponding to 1/3 of 50% of the deferred
variable remuneration accrued under the variable
incentive in 2015.
Chief Executive Officer:
- 2,464 shares will be delivered in the month of January
2017, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 2,464 shares will be delivered in the month of January
2018, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
- 2,464 shares will be delivered in the month of January
2019, corresponding to 1/3 of 50% of the deferred variable
remuneration accrued under the variable incentive in
2015.
51
In short, the sum of the amounts accrued by the executive directors (for
their executive duties) in 2015 was a total of 1,611 thousand euros. In
2014, it was 1,597 thousand euros.
During 2015, delivery was made to the executive Directors of the shares
corresponding to the deferred variable remuneration accrued in 2011,
2012 and 2013, as well as of the shares corresponding to the
immediate delivery of the remuneration accrued in 2014, according to
the resolutions approved by the shareholders at the General
Shareholders’ Meetings held in 2012, 2013, 2014 and 2015,
respectively. The section on director remuneration in the individual
legal note for Bankinter and for the consolidated Group for financial
year 2015 includes an itemised description of the deliveries made
during 2015:
Executive
Director
Delivery of shares
corresponding to
variable remuneration
accrued in 2011
(13.33%)
Delivery of shares
corresponding to
variable remuneration
accrued in 2012
(13.33%)
Delivery of shares
corresponding to
variable
remuneration accrued
in 2013
(13.33%)
Delivery of shares
corresponding to
variable
remuneration accrued
in 2014
(10.00%)
Unit price
assigned
to each
share1
In shares Unit price
assigned to
each share2
In
shares
Unit price
assigned to
each share3
In
shares
Unit price
assigned to
each share4
In
shares
CARTIVAL 3.1059855 8,628 2.605153847 7,179 5.46476923
3,663 6.56261538 2,840
María
Dolores
Dancausa
Treviño
3.1059855 8,628 2.605153847 9,572 5.46476923
4,884 6.56261538 3,876
1Average listing price of the Bankinter share at the close of business for each of the trading sessions held
between 2 January and 20 January 2012 (the initial price was 4.831533, but after the adjustment due to
the increase in capital by means of a scrip issue of April 2013, the new value is 3.1059855). 2 Average listing price of the Bankinter share at the close of business for each of the trading sessions held
between 2 January and 20 January 2013 (the initial price was 4.0524615, but after the adjustment due to
the increase in capital by means of a scrip issue of April 2013, the new value is 2.605153847). 3 Average listing price of the Bankinter share at the close of business for each of the trading sessions held
between 2 January and 20 January 2014 4 Average listing price of the Bankinter share at the close of business for each of the trading sessions held
between 2 January and 20 January 2015.
Bankinter does not have pension commitments to its external or
non-executive directors, nor does it have new or different
commitments to its executive directors other than those already
stated in the Remuneration Report for previous years. Bankinter
does not have new pension commitments or commitments other
than those already stated in the Director Remuneration Reports for
previous financial years for its executive directors or for the
members of Senior Management.
52
Bankinter has not agreed on any parachute provisions with any of its
executive directors in their commercial administration agreements, or
with the Chairman in his services agreement, which tie the accrual of
financial rights to situations of change of control at the bank (customary
provisions in this type of agreement in large companies), as is stated in
the director remuneration report that will be submitted to the
shareholders at the General Shareholders’ Meeting of 2016 for a
consultative vote, as in the past year.
Bankinter has not agreed on any parachute provisions with any of the
members of Senior Management in their Senior Management
agreements, or clauses that tie the accrual of financial rights to situations
of change of control at the bank (customary provisions in senior
management agreements and in fact provided for in Royal Decree
1382/1985, regulating the special employment relationship of senior
management).
Summary of remuneration, receivables and other benefits of directors
Remuneration by item
Thousand euros
2015(*) 2014(*)
Fixed remuneration (1) 1,852 1,766
Variable remuneration (2) 389 434
Fees (3) 368 730
By-law-mandated Benefits (4) 1,140 690
Share options and/or other financial instruments - -
Other - -
3,749 3,620
(*) Does not include remuneration in kind received by the Chairman and the Chief Executive
Officer (8 thousand euros)
(1) Fixed remuneration accrued in 2015, exclusively corresponding to
the executive directors in their capacity as executives and to the
Chairman of the Board of Directors for the performance of his
institutional non-executive duties.
(2) Variable remuneration corresponding solely to the executive directors in their
capacity as executives, deriving from the annual variable remuneration accrued in
financial year 2015. Each of the executive directors was assigned an amount that
they would receive in the case of meeting the established target, as has been
explained in the “Remuneration of executive directors for their executive duties”
section. Purely for purposes of clarification, the Chairman of the Board does not
receive variable remuneration.
(3) Fees for attending Board and Committee meetings (directors).
(4) Comprises fixed remuneration of the Board plus the free-of-charge
delivery of shares (for their duties as directors).
53
Remuneration by class of director, including all items
Thousand euros
2015 2014
Class of Director By Company1 By Group (**) By Company1 By Group (**)
Executive (*) 1,988 - 1,945 -
External Proprietary 222 - 205 -
External Independent 705 41 660 27
Other External (***) 834 - 810 -
3,749 41 3,620 27
1
Does not include the remuneration in kind
received by the Chairman and the Chief Executive
Officer (8 thousand euros)
(*) CARTIVAL, S.A., executive Vice-Chairman, and
María Dolores Dancausa Treviño, Chief Executive
Officer, have the classification of executive directors.
(**) During 2015, the directors Mr Gonzalo de la Hoz Lizcano and
Mr Rafael Mateu de Ros, classified as non-executive directors,
received the amount of 25,500 euros and 15,000 euros,
respectively, as fees for attending the meetings of the Board of
Directors of Línea Directa Aseguradora, S.A. Included in the amount
received by Mr Gonzalo de la Hoz Lizcano are fees as member of
both the Board of Directors and the Control Committee of Línea
Directa Aseguradora. Additionally, Mr Gonzalo de la Hoz Lizcano is
Chairman of Gneis Global Services, S.A., a technology services and
operations company within the Group, and received the amount of
7,200 euros as fees for attending the meetings of the Board of
Directors during 2015.
(***) The Chairman, Mr Pedro Guerrero Guerrero, is classified as
“other external”.
Other benefits Thousand euros
Advances -
Loans granted -
Pension Funds and Plans: Contributions -
Pension Funds and Plans: Contracted obligations 600
Life insurance premiums 1.6
Guarantees created by the company in favour of the directors -