ANNUAL REPORT ON THE REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS OF LA SEDA DE BARCELONA, S.A. 31 March 2013

Transcription

1 ANNUAL REPORT ON THE REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS OF LA SEDA DE BARCELONA, S.A. 31 March 2013

2 INTRODUCTION In accordance with the provisions of Article 61ter of the Securities Market Act 24/1988, of 28 th July, introduced by Sustainable Economy Act 2/2011 of 4 th March, the Board of Directors of La Seda de Barcelona, S.A. (the Company or La Seda de Barcelona ) agreed in its meeting held on 31 st March 2013, to present to the Shareholders this Annual Report on Directors Remuneration. In accordance with the aforementioned Section 61ter of the Securities Market Act, the Board of Directors of Spanish listed companies must prepare, together with the Annual Corporate Governance Report model, an annual report on the remunerations of their directors, including complete, clear and understandable information on the Company s remuneration policy approved by the Board for the year in progress, as well as, if applicable, the policy envisaged for future years. The report must also include an overall summary of how the remuneration policy was applied during the previous year, as well as the details of the individual remuneration earned by each of the directors. Taking into account that to date the content and structure of the Annual Report on Directors Remuneration (based on the delegation, provided for by the Sustainable Economy Act, to the Ministry of Economy and Finance, with the possibility of express authorisation of the Spanish Securities Market Commission, CNMV by its initials in Spanish) have not been determined, the structure and content of this report, therefore, do not follow any official model for this purpose. In accordance with Section 61 ter.2 of the Securities Market Act, this Annual Directors Remuneration Report shall be published and submitted to an advisory vote, as a separate item on the Agenda at the next Annual General Shareholders Meeting to be held before 30 th June Lastly, despite the fact that the task to be performed, where applicable, by the Nomination and Remuneration Committee of listed companies in the preparation of this report, in accordance with the provision set forth in the Sustainable Economy Act, has still not been developed by the Ministry of Economy and Finance or, with its express authorization, the CNMV, it is considered appropriate that the Nomination and Remuneration Committee evaluate this report. Following its analysis during their meeting held on 31 st March 2013, this Committee notified the Board of Directors of the approval of this Report. 1. REMUNERATION POLICY FOR THE CURRENT YEAR 1.1. The Remuneration Policy The scheme applicable to the remuneration of the members of the Board of Directors is governed by the Company s Articles of Association, in Article 34, which literally reads as follows: Article 34 - Remuneration: All the members of the Board of Directors shall receive a fixed annual amount as remuneration. The Board of Directors itself shall determine the exact amount to be paid within the limit approved by the General Meeting and its distribution among the different Directors, taking into account the position and functions carried out by each Director within the Board itself and its Committees. All the Directors shall also receive an allowance for attending each Board meeting that is held throughout the year during the time that they hold their post. The remuneration of the Directors shall be determined for each year by a resolution of the General Meeting. Page 2 of 9

3 Executive Directors may also be paid a variable amount within the limits authorized by the Meeting, as well as through the awarding of Company shares or bonds or the granting of option rights over these, the application of which shall require a resolution of the General Shareholders Meeting as provided for by law. For those members of the Board of Directors who have an employment relationship (ordinary or special senior executive) or service provision relationship with the Company, the remuneration set forth in the previous sections shall be compatible and cumulative with salaries, remuneration, indemnities, pensions and compensation of any kind, established generally or exceptionally. These relationships shall be compatible with the status of member of the Board of Directors, notwithstanding that such remunerative items must be included in the Notes to the Annual Accounts in the terms set forth by law. In addition, Articles 24 to 26 of the Regulations of the Board of Directors regulate the application of Article 34 of the Articles of Association with respect to remuneration concepts by type of director and also establish the preparation of this Annual Report to be submitted to an advisory vote as a separate item on the Agenda at the Company s General Shareholders Meeting. As a result, the post of Director, irrespective of the type or position in the Board may be remunerated as follows: 1. By receiving a fixed annual amount as determined based on the responsibilities and functions carried out by the Directors in each case; and 2. By receiving an allowance for their attendance at the different Board meetings. In addition, Executive Directors may be remunerated with a variable amount and through share awards, bonds or other option rights. The foregoing is notwithstanding any other remuneration items that correspond in view of the executive functions that they carry out. In any case, notwithstanding the provisions of the Articles of Association that so empower them, during 2012 no resolution has been passed to pay any remuneration or allowance to Directors for attending each of the Board meetings. The above-mentioned policy is summarized as follows: Executive Directors Other Directors Annual fixed amount Attendance allowance Variable amount Share awards, bonds, etc. Fees/Salaries, etc. It should be mentioned that by decision of the Board of Directors, the Directors and/or Executives of La Seda de Barcelona, S.A. who become members of certain governing bodies of subsidiaries and/or investee companies of La Seda de Barcelona, S.A. shall not receive any addition remuneration for carrying out this task. In addition, it must be considered that in order to determine the amount to be paid to the Directors, the Board of Directors ensures, at all times, that the Director s remuneration is in accordance with that which is paid in the market of companies of a similar size and activity. Page 3 of 9

4 Thus, this has been the framework within which the Board of Directors has limited its actions related to the remuneration of its members Procedures in determining the Remuneration Policy The Nomination and Remuneration Committee (hereafter the Committee ) is entrusted, among other functions, with recommending to the Board the system and the amounts of the annual salary of the Directors, Senior Executives and Managers of the companies belonging to La Seda de Barcelona, S.A. (LSB Group). According to the Regulations of the Board of Directors, the Committee will meet every time the Board or its Chairman requests a report or a proposal, and in any event whenever considered advisable, in the Chairman s opinion, so that the Committee can carry out its duties properly. In any case, the Committee should meet at least four times a year, once every quarter. The Committee should prepare the information about the remuneration of the Directors and the Senior Executives that requires Board approval and inclusion in the document to be published on an annual basis. The Committee has engaged the services of Egon Zehnden and PricewaterhouseCoopers for advice on the definition of the criteria, the system and the amounts of Directors remuneration. It is also worth mentioning that both the Committee and the Board of Directors have agreed to put in practice the Hay method for determining performance and defining the remuneration policy of its senior executives and managers. In this context and on the basis of the different job positions, and considering the different geographical locations where the LSB Group is present, the Board of Directors has agreed that the remuneration package should evolve towards a fixed salary scheme around the median - according to the Hay method-. With respect to the fixed annual salary, the target is the mean value according to the Hay method, and with regard to variable remuneration and total remuneration for all concepts, these should progressively reach the third quartile, for more demanding targets. During 2012, the Nomination and Remuneration Committee met on six occasions, at which it deliberated on the remuneration structure for senior executive personnel and the uniform bonus plan for executive personnel, analysed expectations for accrual of the 2012 bonus plan and defined the items for the 2013 bonus, established its area of operation and implemented self-assessments actions, the results of which were subsequently debated at the last meeting of the year, held in December Furthermore, the meetings of the Committee included an analysis of the LSB Group s remuneration policies taking into account the trends and developments at EURopean level in relation to salaries and remuneration, according to the report submitted by Hay consulting, and agreements were reached on particular cases relating to promotions and appointments Amount and nature of the fixed components of the remuneration As explained in paragraph 1.1. above, the Directors receive a fixed annual gross amount, determined by taking into account the functions and roles carried out by each director within the Board and the committees thereof. In light of the current market situation and the particular circumstances that affect La Seda de Barcelona, S.A., for 2013 these amounts will be frozen, so that the Directors remuneration in 2013 will be the same as they have received in 2012, as detailed below: : A fixed annual amount for belonging to the Board: EUR 30,000 per Director, except for Mr. Van de Walle and Mr. Trautz, who will receive the sums of EUR 100,000 and 80,000, respectively. The differentiated remuneration of Mr. Van de Walle and Mr. Trautz is due to the fact that, as independent directors, they carry out special control, assessment and supervision functions within the Board, independently of and in conjunction with their participation in the committees. Page 4 of 9

5 With regard to the director LIQUIDAMBAR, INVERSIONES FINANCIERAS, S.L., it resigned on 18 th February 2013, and therefore the total amount it is to receive for 2013 for all items deriving from its functions as a member of the Board of Directors of La Seda de Barcelona, S.A. and its committees is EU 3,337. Fixed annual amount for taking part in one of the following Committees: Audit Committee: a. Chairman: EUR 60,000 b. Member: EUR 20,000 Nomination and Remuneration Committee: a. Chairman: EUR 20,000 b. Member: EUR 10,000 It should be noted that Mr. José Luis Morlanes Galindo, the only Board member who is an Executive Director, shall receive an annual fixed salary of EUR 430,000 in consideration of the employment relationship he has with the Company; which excludes the EUR 30,000 to which he is entitled as a member of the Board of Directors of La Seda de Barcelona, S.A Amount and nature of the variable components of the remuneration. The variable remuneration system which applies to executive directors only was approved by the Board of Directors on 12 th May 2011 and is described in the Annual Report on Remuneration of Directors of La Seda de Barcelona, S.A. drawn up by the Board of Directors on 28 th February 2012 and approved by the Ordinary General Shareholders Meeting held on 3 rd May Mr. José Luis Morlanes Galindo, the only member of the Board of Directors who is an executive director, will receive, by virtue of his employment relationship with the company and according to his responsibilities in the non-core business: A variable amount, which accrues over 3 years, depends on the weighted average evolution of the consolidated ROE and on the achievement of certain Key Performance Indicators (KPIs) over the period from 1 st January 2011 to 31 st December The aforesaid variable amount totals EUR 1,000,000 in a scenario of compliance with all targets. This amount could total a maximum of EUR 1,300,000 in the event that the targets are achieved to the highest possible extent, which is not foreseeable at this time, but is reflected in this Report in compliance with the accountancy principle of prudence. The variable amount approved by the Board is a deferred bonus system, which will be paid over a period not less than 3 years and is related to the evolution of the results of the LSB Group in the medium term. Mr. Morlanes is included in the La Seda de Barcelona Pension Plan, the contributions to which are determined according to the Plan Regulation. Until 2012, the Company s contribution to that Pension Plan amounted to 2.7% of the gross annual salary of each participant, after completing one year of service as an employee of the Company. This percentage is currently being negotiated with the representatives of the employees of La Seda de Barcelona, S.A., and the percentage finally determined in the context of these agreements will be applicable to Mr. Morlanes. In any case, contributions cannot exceed the limits established by law. None of the other members of the Board have an established system of variable remuneration or any pension plan funded by the Company. Page 5 of 9

6 Furthermore, none of the Board members have received short-term variable remuneration or have been granted a remuneration plan that includes the granting of Company shares or options or other financial instruments linked to the Company s share value. Lastly, none of the Directors have received remuneration in the form of monies advanced or loans, nor has the Company granted guarantees on their behalf, nor they have golden parachute agreements to be triggered in the event of dismissal or upon termination of their term as Directors. Although it is not a matter specific to this report, due to the fact that Mr. Carlos Moreira da Silva is BA PET BV s representative and at the same time, the Company s CEO, it is worth clarifying that by virtue of the latter position, he receives the following remuneration in consideration for his employment relationship with the Company: A fixed amount of EUR 500,000 (gross) per year; A variable amount, accruing over 5 years, which is subject to and weighed in line with the evolution of the consolidated ROE and the total value created for the shareholders between 1 st January 2011 and 31 st The variable amount indicated is EUR 6,000,000 if 100% of the targets are met, which is not foreseeable at this time but is reflected in this Report in compliance with the accountancy principle of prudence; and Mr. Moreira da Silva is included in the La Seda de Barcelona, S.A. Pension Plan, the contributions to which are determined according to the Plan Regulation. Until 2012, the Company s contribution to that Pension Plan amounted to 2.7% of the gross annual salary of each participant, after completing one year of service as an employee of the Company. This percentage is currently being negotiated with the representatives of the employees of La Seda de Barcelona, S.A., and the percentage finally determined in the context of these agreements will be applicable to Mr. Moreira da Silva. In any case, contributions cannot exceed the limits established by law. 2. REMUNERATION POLICY IN FUTURE YEARS The Remuneration Policy for future years, including the policy for 2013, will be in line with the policy for 2012 which is described in the following paragraphs. 3. SUMMARY OF HOW THE REMUNERATION POLICY WAS APPLIED IN THE YEAR ENDED 31 DECEMBER 2012 The remuneration received by the Board members during the year 2012 was made in accordance with the Remuneration Policy approved by the Board on 28 th March 2012 and submitted for advisory vote in the Annual Shareholders Meeting held on 3 rd May 2012 and was approved by a majority of the shareholders present and represented. It should be noted that the Directors remuneration for 2012 did not undergo any increase whatsoever compared to the previous year, in light of the market conditions and the particular circumstances of La Seda de Barcelona, S.A. Total remuneration in 2012 amounted to EUR 2,446 thousands for the various cash concepts and EUR 14 thousands in other benefits. The Directors received a fixed annual remuneration, determined based on the position and duties carried out by each one of them on the Board and its committees. The amounts received in 2012 are as follows: Page 6 of 9

7 Fixed annual amount for belonging to the Board: EUR 30,000. Messrs. Van de Walle, Jesi and Trautz received EUR 100,000, EUR 70,834 and EUR 80,000, respectively. Fixed annual amount for belonging to one of the following Committees: Audit Committee: a. Chairman: EUR 60,000 b. Member: EUR 20,000 Nomination and Remuneration Committee: a. Chairman: EUR 20,000 b. Member: EUR 10,000 Furthermore, Mr. José Luis Morlanes Galindo, the only Board member who is an Executive Director, received an annual fixed salary of EUR 430,000 in consideration of the employment relationship he has with La Seda de Barcelona, to which the sum of EUR 30,000 should be added in consideration of his status as member of the Board of Directors. In addition, in accordance with the Policy explained in paragraph 1.4 above, Mr. Jose Luis Morlanes Galindo received the amounts accruing under the Variable remuneration system, including EUR 10,000 as contribution to the Pension Plan. 4. DETAILS OF THE INDIVIDUAL REMUNERATION OF EACH OF THE DIRECTORS The following table shows the remuneration accruing to each of the Company s directors who held office during the fiscal year 2012, taking into account the functions, responsibility and posts carried out in the Company s Board, as well as their membership of and attendance at the different committees and, in general, considering the dedication of each of the Directors to the Company s management: Page 7 of 9

8 Amount in thousands of EUR BOARD MEMBER REPRESENTATIVE TYPE SALARY FIXED AMOUNT VARIABLE REMUNERATION LONG TERM REMUNERATION FOR TAKING PART IN ONE OF THE COMMITTEES OTHER TOTAL 2012 TOTAL BA PET BV Mr. JOSE LUIS MORLANES GALINDO Mr. Carlos Antonio Rocha Moreira da Silva Representative Executive CAIXA CAPITAL SOCIEDADE DE CAPITAL DE RISCO, S.A. LIQUIDAMBAR, INVERSIONES FINANCIERAS SL Mr. JOSE LUIS RIERA ANDRES Ms. SANDRA MARIA SOARES SANTOS Mr. CARLOS SORIA SENDRA Mr. Goncalo Vaz Gago da Cámara de Medeiros Botelho Mr. José Antonio Garcia-Albi Gil de Biedma Mr. MARCO JESI - Representative Representative Other External Representative Independent Independent Mr. PHILIPPE LESLIE VAN DE WALLE - Independent Mr. VOLKER TRAUTZ - Independent Mr. JORGE ALEXANDRE TAVARES FERREIRA Total - Representative (*) It should be noted that the Long-term Variable amounts have not yet been paid by the Company to the Directors, but solely accrued for in the annual accounts assuming that all targets will be achieved, which it is not possible to foresee at this time. The Company is disclosing this fact for the purpose of transparency and in compliance with the accountancy principle of prudence. The remuneration accrues from 1 st January to 31 st December 2012, except for: (a) the amounts received by Mr. Jesi, which accrue from 1 st January to 6 th November 2012, when he tendered his resignation to the post of Director. (b) the remuneration received by Ms. Soares Santos, which accrues from 1 st January to 22 nd June 2012, when she tendered her resignation to her post of Director; (c) the remuneration received by CAIXA CAPITAL SOCIEDADE DE CAPITAL RISCO, S.A., which accrues from 1 st January to 25 th February 2012, when it tendered its resignation to the post of Director; and (d) the remuneration received by Mr. Tavares Ferreira, which accrues from 17 th July (date on which he was appointed as a Director) to 31 st December Page 8 of 9

9 Although it is not a matter specific to this report, the table above includes the remuneration of Mr. Carlos Moreira da Silva, representative of BA PET BV and the Group s CEO, as explained in paragraph 1.4 above. The compensation for Other items include benefits in kind received during the year 2012 totalling EUR 14 thousands. Other benefits Year 2012 Year 2011 Pension Life insurance contributions premium Pension Life insurance contributions premium Board member D. CARLOS ANTONIO ROCHA MOREIRA DA SILVA, Representing BA PET BV D. JOSE LUIS MORLANES GALINDO As previously indicated, Mr. Jose Luis Morlanes Galindo, Executive Director is included in the La Seda de Barcelona, S.A. Pension Plan. The Company s contributions thereto during 2012 amounted to EUR 10 thousands. Mr. Carlos Moreira da Silva, representative of BA PET BV and CEO of the LSB Group is included in the La Seda de Barcelona, S.A. Pension Plan as from October 2011, his first anniversary as Company employee. The Company s contributions thereto during 2012 totalled EUR 12 thousands. This Annual Report was approved by all the members of the Board of Directors of the Company at their meeting held on 31 st March La Seda de Barcelona, S.A. El Prat de Llobregat (Barcelona) Page 9 of 9