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Annual Report on the Remuneration of BBVA Directors |
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19 |
2.1.
Decision-making process for the approval of the Policy
In accordance with the Regulations of the Board of Directors of BBVA, one of the
Boards functions is to approve the directors remuneration policy so that it may be submitted to the General Shareholders Meeting.
Meanwhile, the Remuneration Committee assists the Board in remuneration matters, and is responsible for proposing to the Board of Directors the
directors remuneration policy, together with its corresponding report for its submission to the General Shareholders Meeting.
In
addition, as part of the decision-making process in remuneration matters, the Remuneration Committee works alongside the Risk and Compliance Committee, which is also involved in establishing the remuneration policy to ensure that it is
consistent with sound and effective risk management and does not provide incentives for risk-taking that exceeds the level tolerated by the Institution.
Likewise, the Remuneration Committee is also tasked with ensuring compliance with the remuneration policies established by the Company and reviewing
them periodically, proposing, where appropriate, any modifications that it deems necessary to ensure, inter alia, that they are adequate for the purposes of attracting and retaining the best talent, that they contribute to the creation of long-term
value and adequate risk management and control, and that they address the principle of equal pay.
In 2023, in compliance with the provisions of
article 529 novodecies of the Corporate Enterprises Act, once the last financial year foreseen for the application of the directors remuneration policy approved by the General Meeting on April 20, 2021 for financial years 2021,
2022 and 2023, had arrived, a new policy had to be submitted to the General Meeting for its consideration before the end of that financial year.
In
view of the above, during the 2022 financial year, the Remuneration Committee conducted a thorough analysis and an in-depth review of the previous policy and the remuneration system as a whole. For this
purpose, it relied on the support of the Banks internal services, as well as the independent advice of two leading external firms in the field of remuneration of directors and senior executives, namely WTW, for market analysis
and benchmarking and J&A Garrigues, S.L.P. for the legal analysis of the Policy.
In establishing the new Policy, the Remuneration
Committee took into account, among other matters, the suggestions received within the framework of the constant and constructive dialogue that BBVA maintains with its shareholders, investors and other stakeholders, as well as the results of the
votes in recent financial years on the proposals submitted to the General Shareholders Meeting on matters relating to remuneration, so as to continue to evolve in line with the expectations and latest market trends. Likewise, the Remuneration
Committee analyzed the remuneration schemes and, in particular, the variable remuneration models used for similar positions by the main comparable financial institutions comprising BBVAs peer group for remuneration purposes.
Lastly, pursuant to Articles 511 bis and 529 novodecies of the Spanish Corporate Enterprises Act, the Directors Remuneration Policy
was submitted, as a separate item on the agenda, to the approval of the Banks General Shareholders Meeting held on March 17, 2023, which approved it with a majority vote in favor (95.03%).
This English version is a translation of the
original in Spanish for information purposes only. In case of discrepancy the original in Spanish shall prevail.