Shareholders of Telefónica – which owns 9.4% of PRISA shares – gave unqualified approval to the report on the millionaire bonus received by the company’s directors in 2021. Only 53.3% of the shareholders represented at the general meeting held on the eighth voted in favor of the tenth agenda item while Regarding the remuneration of the members of the board of directors. 42.9% opposed it and 3.8% abstained. A strong rejection given that the rest of the points put to the vote were approved by more than 99% of the vote.
The main reason for this rejection was the plan by which a group of 156 managers would share an extraordinary bonus of 22.6 million euros in 2021 to accomplish various operations such as the merger of O2 with Virgin Media in the UK, the sale of Telxius Towers to American Tower and the achievement of other strategic goals. When asked about it by this newspaper, a Telefónica spokesperson declined to make any comment.
The company’s president, Jose Maria Alvarez Ballet, was the main beneficiary because he received 1.92 million for the concept (8% of the total plan) while the CEO, Angel Villa, received 1.6 million (7% of the total).
Balletti’s compensation for all concepts in 2021 was 8,725 million, including 1.9 million of that exceptional bonus, compared to 5.19 million he received the previous year. It is the highest salary he has received since he took over Telefónica. Of the total, 1.9 million corresponds to his fixed salary, which has not changed since 2016 and will not change in 2022. Another 3.8 million is variable short-term wages, the previous year was 3.1 million. As a long-term incentive, he acquired 0.9 million shares.
The previous year, Pallete had given up 0.6 million shares that it would have matched, “as a liability gesture after the effects of COVID-19,” the company explained. In addition to this, the previously mentioned 1.9 million extraordinary variable bonuses. In addition, 132 thousand euros received contributions to savings schemes and 37 thousand euros insurance premiums. If the long-term incentive he did not receive is added to last year’s pay and the exceptional bonus he received is deducted from this year’s pay, the increase will be 15.7%. If what is actually gained is taken into account, the increase is 68%. The telecommunications company indicated in the bonus report that Balletti had given up paying 240,000 euros as chairman of the board and 80,000 euros as chair of the executive committee. Telefónica contributed another 541,000 euros to savings schemes that are not counted in the total of 8.7 million because they are unincorporated, with which they have accumulated 10.6 million in said plan.
In turn, the CEO, Angel Villa, received 6.62 million euros, compared to 3.87 million euros in the previous year, of which 1.6 million were salaries, a fixed amount compared to previous years; 2.64 million variable pay, 668,000 euros of long-term equity incentives (the previous year he also gave it up) and 1.6 million for the aforementioned exceptional bonus.
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The bonuses received by Telefónica’s board of directors as a whole in 2021 amounted to 16.6 million euros, compared to 12.06 million they received in the previous year. Of the directors, Javier de Paz received 572 thousand euros, 495 thousand euros from Javier Echnik, 302 thousand from Jose Maria April, 283 thousand from Peter Erskine and 280 thousand from Isidro Faini.
This isn’t the first time Telefonica’s shareholders have revolted over high board member bonuses. Already under the chairmanship of César Alierta, 34% of shareholders voted against the remuneration of the board of directors in 2014. Telefónica announced that in order to ensure that more employees benefit from the good performance of the company, it will propose to the next general meeting of shareholders the launch of a new global share plan to reach a ratio Higher than the staff, which currently amounts to 25% of Telefónica’s workforce. Employee benefits will be extended in all countries in which the company is located, and regardless of their category and liability, according to the company.
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