Conclusions of the CNMV report on directors’ remuneration in listed companies in 2020

On September 17, the Spanish Securities and Exchange Commission (CNMV) published its Report on the remuneration of directors of listed companies for the 2020 financial year.

The Report, which draws on the Annual Directors’ Remuneration Reports filed by listed companies for the 2020 financial year, offers an overview of the main features of remuneration policies and practices for executive and external directors in listed companies during 2020, and how they were applied.

Excluding the impact of the end of multi-year remuneration plans for one specific company on the Ibex 35, broadly speaking, average pay for directors dropped 7% in 2020, both for executives and non-executives.

Average remuneration for Ibex 35 executive directors, with that particular exception, dropped 18.2%. Remuneration of executive directors in remaining listed companies dropped 14.1% (to an average of EUR 705,000).

In terms of external directors, remuneration in Ibex 35 companies dropped 4.5% (to EUR 212,000), while dropping 1.1% (to EUR 88,000) in remaining listed companies.

The most important element of director remuneration packages was fixed salary, representing 45% in Ibex companies and 58% in all others, followed by bonuses. Long-term incentive plans feature in 64.9% of listed companies (78% in 2019) and are primarily hybrid, combining cash and stocks.

Aspects marked for improvement include the information provided by companies on (i) criteria and parameters to set bonuses, (ii) consolidation conditions for financial rights, and (iii) pension plans and other long-term savings schemes.

Lastly, we highlight that in 2020, the third year in which annual remuneration reports have been been allowed in an open format, accompanied by a statistical appendix, 22 listed companies opted for this format (17% of the total). Of those, 17 were Ibex 35 companies.