46. Administration costs

46.1 Personnel expenses

The breakdown of the balance under this heading in the accompanying consolidated income statements is as follows:

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Personnel Expenses	Notes	Millions of Euros
		2013	2012	2011
Wages and salaries		4,232	4,192	3,911
Social security costs		693	657	600
Transfers to internal pension provisions	26.2	70	54	51
Contributions to external pension funds	26.1	80	84	80
Other personnel expenses		513	480	411
Total		5,588	5,467	5,053

The breakdown of the average number of employees in the BBVA Group in the year ended December 31, 2013, 2012 and 2011, by professional categories and geographical areas, is as follows:

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Average Number of Employees by Geographical Areas	Average number of employees
	2013	2012	2011
Spanish banks
Executive managers	1,127	1,129	1,115
Other line personnel	22,375	21,970	21,103
Clerical staff	4,474	4,267	4,364
Branches abroad	794	886	846
Subtotal	28,770	28,252	27,428
Companies abroad
Mexico	28,309	28,187	27,108
United States	10,689	11,070	11,361
Venezuela	5,292	5,384	5,418
Argentina	5,229	5,147	4,844
Colombia	5,033	4,679	4,439
Peru	5,171	4,851	4,675
Others	5,056	5,777	5,620
Subtotal	64,779	65,095	63,465
Pension fund managers	2,181	5,505	5,255
Other non-banking companies	16,859	15,072	13,546
Total	112,589	113,924	109,694

The breakdown of the number of employees in the BBVA Group as of December 31, 2013, 2012 and 2011, by category and gender, is as follows:

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Number of Employees at the period end Professional Category and Gender	2013		2012		2011
	Male	Female	Male	Female	Male	Female
Executive managers	1,675	363	1,708	355	1,723	361
Other line personnel	24,375	21,828	25,733	23,218	24,891	21,920
Clerical staff	25,812	35,252	27,311	37,527	26,346	35,404
Total	51,862	57,443	54,752	61,100	52,960	57,685

The breakdown of the average number of employees in the BBVA Group in the year ended December 31, 2013, 2012 and 2011 is as follows:

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Average Number of Employees Breakdown by Gender	2013		2012		2011
	Male	Female	Male	Female	Male	Female
Average Number of Employees BBVA Group	53,325	59,263	53,815	60,109	52,664	57,030
Of which:
BBVA, S.A.	15,522	12,339	15,440	11,557	15,687	11,531

46.1.1 Share-based employee remuneration

The amounts recognized under the heading “Personnel expenses - Other personnel expenses” in the consolidated income statements for the year ended December 31, 2013, 2012 and 2011, corresponding to the plans for remuneration based on equity instruments in force in each year, amounted to €60, €60 and €51 million, respectively. These amounts have been recognized with a balancing entry under the heading “Stockholders’ funds – Other equity instruments” in the accompanying consolidated balance sheets, net of tax effect.

The characteristics of the Group’s plans for remuneration based on equity instruments are described below.

System of Variable Remuneration in Shares

The BBVA General Meeting, 11th March 2011, approved a system of variable remuneration in shares for the BBVA Management Team, including the executive directors and members of the Management Committee (the "System of Variable Remuneration in Shares for the Management Team" or the "System"), whose conditions for 2013 were approved by the BBVA General Meeting, 15th March 2013.

This system is based on a specific incentive for members of the Management Team (the "Incentive") comprising the annual allocation to each beneficiary of a number of units that provide the basis for determining the number of shares to which, where applicable, they will be entitled when the Incentive is settled. These depend on the level of delivery against indicators established each year by the General Meeting, taking into account the performance of Total Shareholder Return (TSR); the Group Economic Profit without one-offs; and the Group Attributable Profit without one-offs.

This incentive, plus the ordinary variable remuneration in cash to which each manager is entitled, comprises their annual variable remuneration (the "Annual Variable Remuneration").

After each financial year-end, the number of units allocated is divided into three parts indexed to each one of the indicators as a function of the weightings established at any time and each one of these parts is multiplied by a coefficient of between 0 and 2 as a function of the scale defined for each indicator every year.

The shares resulting from this calculation are subject to the following withholding criteria:

• 40% of the shares received will be freely transferrable by the beneficiaries from the time of their vesting;

• 30% of the shares received will become transferrable after one year has elapsed from the incentive settlement date; and

• The remaining 30% will become transferrable after two years have elapsed from the incentive settlement date.

Apart from this, the Bank also has a specific system for settlement and payment of the variable remuneration applicable to employees and managers, including the executive directors and members of the Management Committee, performing professional activities that may have a significant impact on the risk profile of the entity or perform control duties (hereinafter, the "Identified staff").

The specific rules for settlement and payment of the Annual Variable Remuneration of executive directors and members of the Management Committee are described in Note 56, while the rules listed below are applicable to the rest of the Identified staff:

• At least 50% of the total Annual Variable Remuneration of the members of the management team in the Identified staff will be paid in BBVA shares.

• Those in the Identified staff who are not members of the management team will receive 50% of their ordinary variable remuneration in BBVA shares.

• The payment of 40% of their variable remuneration, both in cash and in shares, will be deferred in time. The deferred amount will be paid one third a year over the following three years.

• All the shares delivered to these beneficiaries pursuant to the rules explained in the previous paragraph will be unavailable during one year after they have vested. This withholding will be applied against the net amount of the shares, after discounting the part needed to pay the tax accruing on the shares received. A prohibition has also been established against hedging with unavailable vested shares and shares pending reception.

• Moreover, circumstances have been defined in which the payment of the deferred Annual Variable Remuneration payable may be capped or impeded (malus clauses), and the adjustment to update these deferred parts has also been determined.

When the term of the Incentive ended on 31st December 2013, the multiplier applicable to the units allocated to each beneficiary was 0.4675. This resulted in a total number of 3,145,763 shares for the Management Team as a whole. This figure may vary in application of the settlement and payment system described above for the members of the Identified staff, which requires that at least 50% of their Annual Variable Remuneration should be paid in BBVA shares and that the necessary part of their ordinary variable remuneration be turned into shares in order to reach this percentage.

2010-2011 Multi-Year Variable Share Remuneration Programme

When the term of the Multi-Year Variable Share Remuneration Programme for 2010-2011 (hereinafter the "Programme" or the "LTI 2010-2011") approved by the General Meeting, 12th March 2010, ended on 31st December 2011, it was settled in application of the conditions established when it began.

However, with respect to those Programme beneficiaries who are members of the Identified staff described above, the Bank’s General Meeting, 16th March 2012, approved the modification of the settlement and payment system for the LTI 2010-2011 in order to align it with the special rules applicable to employees performing professional activities that may have a significant impact on the risk profile of the entity or perform control duties, including executive directors and members of the Management Committee, such that:

• The payment of 40% of the shares resulting from settlement of the Programme (50% in the case of executive directors and other members of the Management Committee) was deferred to vest in thirds in 2013, 2014 and 2015.
• The shares paid will not be availed during a period of one year as of their vesting date. This withholding is applicable to the net amount of the shares, after discounting the part needed to pay taxes on the shares received.
• The vesting of the deferred shares will be subject to the application of the circumstances limiting or impeding payment of the variable remuneration (malus clauses) established by the Board of Directors; and
• The deferred shares will be adjusted to reflect their updated value.

Thus, under the conditions established in the Programme, in the first quarter of 2013 the Identified staff vested a total of 351,905 shares, equivalent to the first third of the deferred part of the shares resulting from settlement of the Programme, plus €146,744 as an adjustment for the updated value of the shares vested. The payment of the remaining two thirds of the deferred shares resulting from the settlement of the Programme was deferred until the first quarter of 2014 and 2015.

The settlement and payment of the shares arising from this Programme for the executive directors and members of the Management Committee was carried out according to the scheme defined for such purpose, as described in Note 56.

BBVA Long-Term Incentive in BBVA Compass

When the term of the Long-Term Incentive 2010-2012 for the BBVA Compass Management Team ended on 31st December 2012, it was settled in application of the conditions established when it began.

During 2013, 106,268 shares have vested, those corresponding to BBVA Compass beneficiaries performing professional duties with a significant impact on the risk profile or performing control functions having been deferred to vest over a three-year period.

Additionally, the BBVA Compass remuneration structure includes long-term incentive programs in shares for employees in certain key positions that do not belong to the Management Team. These plans run over a three-year term. At 31st December 2013, there are three such programs in force (2011-2013, 2012-2014 and 2013-2015), and the maximum number of shares vesting under these programs as a whole is 656,325.

46.2 General and administrative expenses

The breakdown of the balance under this heading in the accompanying consolidated income statements is as follows:

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General and Administrative Expenses	Millions of Euros
	2013	2012	2011
Technology and systems	714	735	639
Communications	294	311	275
Advertising	336	359	355
Property, fixtures and materials	920	873	808
Of which: Rent expenses (*)	470	490	455
Taxes other than income tax	421	417	345
Other expenses	1,428	1,234	1,159
Total	4,113	3,929	3,581

(*) The consolidated companies do not expect to terminate the lease contracts early.