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information of prudential relevance 2012

10.4. Information on the connection between the remuneration of the Identified Staff and the performance of the Group

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As specified above, the amount of variable remuneration received by BBVA Identified Staff is determined by the following factors:

  • The Group's financial results.
  • The financial results and strategic projects in each business area.
  • The financial results and the unit's own indicators (not financial).
  • The individual's financial and non-financial targets.

The ordinary variable incentives of the executive directors depend on the Group's results, based on the recurrent EVA, net attributable profit and the recurrent efficiency ratio.

Similarly, the ordinary variable incentives of the Management Committee are linked to both the Group's results and those of their management area.

For the rest of the members of the Identified Staff, the amount of variable remuneration depends on individual performance, results in the area in which they provide their service, and the Group's results overall.

In 2012, the Group's earnings (net attributable profit and recurrent EVA without one-offs) determined 50% of the final incentives for the Management Team in 2012. The other 50% is determined by Total Shareholder Return (TSR), which as indicated for the incentive for 2013 will be measured over a period of two years.

As indicated earlier, it is also worth noting that payment of variable deferred annual remuneration that is deferred and pending payment could be limited or even stopped in certain circumstances, including cases in which the bank obtained negative financial results.

However, any variable annual remuneration that is pending payment will always be paid, provided that such payment is sustainable in terms of the situation of the BBVA Group as a whole.

By using the selection of indicators and calculation method explained above, BBVA has brought the remuneration system for its management team into closer alignment with shareholder interests; it strengthens prudent risk management by incorporating recurrent EVA as an indicator; and it determines a direct relationship between the variable remuneration of its executives and the Bank's long-term results, by taking into account the multi-year calculation of TSR and applying recurrent EVA.


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