BBVA has a Remuneration Committee whose functions are set out in Article 36 of the Board of Directors' Regulations. They are as follows:
a. Propose, within the framework established in the Company Bylaws, the remuneration system for the Board of Directors as a whole, in terms of both items and amounts and the form in which they are paid.
b. Determine the extent and amount of the remuneration, entitlements and other economic rewards for the Chairman & CEO, the President & COO and, where applicable, other executive directors of the Bank, so that these can be reflected in their contracts. The Committee’s proposals on such matters will be submitted to the Board of Directors.
c. Issue a Report on the directors' remuneration policy each year. This will be submitted to the Board of Directors, which will in turn inform the Company's Annual General Meeting each year.
d. Propose to the Board the remuneration policy for senior officers, as well as the basic conditions of their contracts, and directly supervise the remuneration of senior officers responsible for risk management and compliance functions.
e. Propose a remuneration policy to the Board for employees whose professional activities may have a material impact on the institution's risk profile.
f. Oversee observance of the remuneration policy established by the Company and periodically review the remuneration policy applied to executive directors, senior officers and employees whose professional activities may have a material impact on the institution's risk profile.
g. Any others that may have been assigned under these Regulations or conferred by a decision of the Board of Directors.
As of the date of this report, the Committee was composed of five members, all of them external directors; four of them are independent, including its chairman, and therefore none of its members have executive positions in the entity.
| Name and surname(s) | Position | Status |
|---|---|---|
| Carlos Loring Martínez de Irujo | Chairman | Independent |
| Ignacio Ferrero Jordi | Member | Independent |
| José Maldonado Ramos | Member | External |
| Juan Pi Llorens | Member | Independent |
| Susana Rodríguez Vidarte | Member | Independent |
In compliance with its functions, the BBVA Remuneration Committee met eight times in 2012 to deal with such questions as were considered relevant to it.
Among the questions analyzed in determining the remuneration policy of the employees who carry out professional activities in the Group that may have a material impact on the Bank's risk profile, or who are responsible for the control function (the "Identified Staff"), are the following:
- Revision of the remuneration policy for Identified Staff, adapted to Royal Decree 771/2011 of June 3.
- Direct supervision of the remuneration of managers in the Risk and Compliance areas.
- Review of the application of the remuneration policy approved in 2011 for Executive Directors, the Management Committee, and the Identified Staff.
Finally, on January 31, 2013, BBVA's Board of Directors approved the report on the Board of Directors' remuneration policy that had been submitted by the Remuneration Committee. It also agreed to subject it to a consultative vote at the Annual General Meeting of Shareholders in March 2013. The report was approved by 96.46% of the votes cast and is available on the Bank's website (www.bbva.com).
The report on the Board's remuneration policy includes a description of the basic principles of the Bank's remuneration policy with respect to the members of the Board of Directors, whether executive or non-executive, as well as a detailed presentation of the different elements making up their remuneration. It has been prepared in accordance with BBVA's Bylaws and the Board of Directors' Regulations.
The report also includes the principles and basic elements of the Bank's general remuneration policy.
As already indicated, BBVA has a decision-making policy system for this matter in which the Remuneration Committee plays a key role. It is responsible for determining the amount of fixed and variable remuneration for the executive directors and the remuneration policy applicable to the Identified Staff, including the members of the Group's senior management; it then submits the corresponding proposals to the Board. To perform its functions, the Remuneration Committee has the support of the Bank's internal services and free access to any external advice it may consider useful.
Every year, the Remuneration Committee reviews the application of the remuneration policy approved by the Bank's Board of Directors.
In addition, all the decisions relating to share-based remuneration affecting the executive directors and members of the Group's senior management must be approved by the Annual General Meeting of Shareholders of the Bank. The AGM decides on the essential aspects of the corresponding share-based remuneration plans and receives the Board of Directors' report on remuneration policy.
This system ensures an adequate decision-making process on questions of remuneration.
It is worth noting here that the decisions on remuneration made by the Remuneration Committee and the Board of Directors in the exercise of their functions have been made on the advice of BBVA's internal services, as well as information provided by one of the leading global consultants on remuneration for board members and senior officers.
In 2012 the members of the Remuneration Committee received an aggregate total of €278,000 for their work on it. The Board of Directors’ report on remuneration policy includes a breakdown of the remuneration by item and committee member.