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DIRECTORS ARE KEY TO THE BANK’S OPERATION AND THE DEFENCE OF ITS STAKEHOLDERS’ INTERESTS.

ONE OF THE ESSENTIAL FEATURES OF THE BOARD OF DIRECTORS’ ROLE IS ITS INDEPENDENCE. FOR THAT REASON, RECOMMENDATION 17 OF THE CODE OF GOOD GOVERNANCE OF LISTED COMPANIES ADVISES THAT AT LEAST HALF THE DIRECTORS SHOULD BE INDEPENDENT.

This recommendation has been incorporated into article 38 of Bankia’s Bylaws.

In compliance with that article, between 1 January and 17 October 2017 the bank’s Board of Directors was made up of 11 directors, of whom three were executive and eight independent, which means that 72.73% of the Board members were independent. The proportion changed slightly on 17 October as result of the resignation of the independent director Álvaro Rengifo. From that date onward, independent directors accounted for 70% of the Board.

ASSESSMENT

Another fundamental factor in ensuring the proper functioning of the Board of Directors is the assessment of the Board’s work, which is performed each year by an independent expert appointed from among the top firms in the market.

Once a year, the Board of Directors assesses the performance of the Board’s chairman, taking the prior report issued by the Appointments and Responsible Management Committee as a reference. In addition, Bankia annually assesses the suitability of each member of the Board of Directors.

CONFLICTS OF INTEREST

Detecting and managing potential conflicts of interest is another of Bankia’s priorities in corporate governance. For directors the main obligations are as follows:

  • They must take the necessary steps to avoid finding themselves in situations in which their own interests or those of other persons conflict with the interests of the company and their duties to the company.
  • Directors must notify the Board of Directors of any direct or indirect conflict they or persons related to them may have with the interests of Bankia.
  • They must make an initial statement of potential conflicts at the time of assuming the post. That statement must be updated whenever circumstances change.

TRAINING AND INFORMING

Bankia has a training programme to help directors broaden their knowledge in economic and corporate matters. The content of this programme is adapted each year in the light of the directors’ needs and regulatory requirements. The 2017 training plan included monthly sessions with the following content:

  • Cyber security
  • Risks
  • Social action and sponsorship
  • MiFID II
  • Regulatory compliance update
  • Internal processes
Directors competency matrix
  José Ignacio Goirigolzarri José Sevilla Antonio Ortega Joaquín Ayuso Fco. Javier Campo Eva Castillo Jorge Cosmen José Luis Feito Fernando Fernández Antonio Greño
Status Executive Executive Executive Independent Independent Independent Independent Independent Independent Independent
Number of years on Bankia’s Board 5 5 3 5 5 5 5 5 5 5
Committee membership - (1) - (2) (3) (4) (5) (1) (3) (5) (6) (1) (4) (5) (6) (2) (4) (2) (1) (3) (4) (6) (2) (5)
Other directorships (A) (B) (A) (A) (C) (D) (E) (F) (G) (H) (I) (J) (G) (K) (L) (M) (M) (O)
Prior experience
Senior management experience in banks and financial institutions        
Senior management experience in other (non-financial) sectors  
Areas of experience/competence
Credit institutions
Financial markets
Risk management        
Auditing / Accounting
Strategic consulting            
Legal / Regulatory framework      
Public sector                
Technology sector            
Tourism / Transport              
Industry        
Consumer goods / Distribution                  
Real estate                  
Teaching / Research          

(1) Board Risk
(2) Audit and Compliance
(3) Appointments and Responsible Management
(4) Remuneration
(5) Bankia-BMN Merger Monitoring and Oversight
(6) Risk Advisory

(A) BFA, Tenedora de Acciones, S.A.U.
(B) Confederación Española de Cajas de Ahorros
(C) Cecabank, S.A.
(D) Ferrovial, S.A.
(E) Autopista del Sol, Concesionaria Española, S.A.
(F) Hispania Activos Inmobiliarios, S.A.

(G) National Express Group, Plc.
(H) Meliá Hotels International, S.A.
(I) Telefónica, S.A.
(J) Telefonica Deutschland, GMBH
(K) General Tecnica Industrial, S.L.U.
(L) Quintorge, S.L.
(M) Red Eléctrica Corporación, S.A.
(O) Liberty Seguros, Compañía de Seguros y Reaseguros, S.A. 

REMUNERATION

The remuneration system for Bankia’s directors and senior managers is governed by a number of principles, including a proper balance of remuneration types, results orientation, recognition of excellence, gender equality and internal fairness.

Remuneration at Bankia is made up of a fixed part, based on the person’s position and any supplements applicable in each case, and a variable part.

The variable part must be consistent with the interests of shareholders, prudent risk management and long-term value generation for the company. In any case, variable remuneration will be paid only if it is sustainable, based on Bankia’s overall situation, and if it is justified by the bank’s results.

In the bank’s current situation, the remuneration received by the Board of Directors is limited by law. This means, for example, that the remuneration of directors who have no executive functions is limited to 100,000 euros per year. Nor do directors receive attendance fees for taking part in Board meetings or the meetings of Board committees.

At the same time, the fixed remuneration of executive directors may not exceed 500,000 euros per year and their annual variable remuneration may not exceed 60% of their fixed remuneration.

Payment of the variable remuneration must be authorised by the supervisory authorities. Once approved, it does not vest until three years after the date of accrual, in accordance with regulations. In 2017, for the second year in a row, the executive directors José Ignacio Goirigolzarri, José Sevilla and Antonio Ortega each accrued a total of 300,000 euros of variable remuneration. This remuneration will be paid in 2021 (50%), 2022 and 2023, half in cash and half in shares.

BOARD OF DIRECTORS REMUNERATION
Surname(s) and first name Salary Fixed Short-Term Variable(2) Long-Term Variable (3) For board committee membership Indemnities Total 2017
Goirigolzarri Tellaeche, José Ignacio 500 -- 250 50 -- -- 800
Sevilla Álvarez, José 500 -- 250 50 -- -- 800
Ortega Parra, Antonio 500   250 50 -- -- 800
Ayuso García, Joaquín -- 100 -- -- -- -- 100
Campo García, Francisco Javier -- 100 -- -- -- -- 100
Castillo Sanz, Eva -- 100 -- -- -- -- 100
Cosmen Menéndez-Castañedo, Jorge -- 100 -- -- -- -- 100
Feito Higueruela, José Luis -- 100 -- -- -- -- 100
Fernández Méndez de Andés, Fernando -- 100 -- -- -- -- 100
Rengifo Abbad, Álvaro (1) -- 80 -- -- -- -- 80
Greño Hidalgo, Antonio -- 100 -- -- -- -- 100
Total Directors 1,500 780 750 150 0 0 3,180

Figures in thousands of euros. Does not include the three executive directors.

(1) On 17 October 2017 Mr. Álvaro Rengifo Abbad ceased to be a director. The amounts shown are for the period from 1 January to 17 October 2017.

(2) The target amount of annual variable remuneration for 2017 of the three executive directors was 250 thousand euros per director. The amount of annual variable remuneration accrued by the three directors in 2017 is awaiting final assessment and the authorisations and approvals required under applicable law.

(3) The target amount of long-term variable remuneration for 2017 of the three executive directors was 150 thousand euros per director, although this remuneration, together with the annual variable remuneration, may not exceed 60% of the fixed remuneration. The amount of long-term variable remuneration accrued by the three directors in 2017 is awaiting final assessment and the authorisations and approvals required under applicable law. 

MANAGEMENT COMMITTEE REMUNERATION
  Short-term remuneration (1) Long-term remuneration (2) Post-employment benefits Termination benefits Total 2017
Total Senior Management 2,357 302 123 -- 2,782

Figures in thousands of euros. 

SELECTION AND SUCCESSION PLAN

Bankia has a director selection policy and a Senior Management Succession Plan.

The director selection policy is designed to ensure that directors have the necessary experience, competencies and knowledge to deliver independent, professional oversight. Furthermore, any proposals for appointment or re-election must be based on an analysis of the Board of Directors’ needs. The bank’s policy favours gender diversity, as well as diversity of knowledge and experience.

The Senior Management Succession Plan (which includes the posts of chairman and CEO, the members of the Management Committee and the corporate general managers) is analysed by the Appointments and Responsible Management Committee.

The plan’s main goal is to identify successors for the bank’s top posts and to establish development and career plans which will ensure that candidates are properly prepared to take on the responsibility when the time comes.

The succession plans must be managed in a structured, proactive way and must meet the following criteria:

  • Combine the organisation’s present and future needs.
  • Be integrated in the Board of Directors’ functions (Appointments Committee and lead director).
  • Be reviewed annually to assess successors’ performance, add new candidates, define additional development actions, etc.
  • Foster job rotation to ensure effective learning and facilitate acquisition of the necessary professional experience.

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