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Santander Increases Executive Pay Amidst Record Profits and Policy Changes
Banco Santander increased executive compensation by 10.5% in 2024 to 33.9 million euros, driven by record profits (12.574 billion euros) and strong stock performance (23% increase). The bank altered its remuneration policy to include a greater emphasis on long-term incentives and shareholder returns after receiving less than ideal shareholder support in 2023.
- How did Banco Santander's 2024 financial performance and shareholder return influence the executive compensation increases?
- The policy changes respond to feedback from the bank's 16 largest shareholders (24% of capital) and proxy advisors ISS and Glass Lewis. Key adjustments include increasing bonus payments in bank shares from 50% to 60%, and aligning 40% of bonuses with long-term objectives (up from 36%).
- What are the long-term implications of Santander's revised remuneration policy for investor relations and executive behavior?
- The adjustments reflect a focus on long-term shareholder value and increased transparency, addressing concerns about executive compensation. The higher performance thresholds for bonuses suggest a stronger alignment between executive and shareholder interests, potentially improving investor confidence.
- What specific changes did Banco Santander make to its executive compensation policy following shareholder feedback, and what are the immediate implications?
- Banco Santander's board approved a modified remuneration policy, increasing variable pay components, long-term incentives, and the minimum shareholder return threshold for bonuses. This follows a lower-than-expected approval rating (74%) at the 2023 shareholder meeting, compared to over 90% in 2019 and 2022.
Cognitive Concepts
Framing Bias
The framing emphasizes the significant increases in executive compensation, highlighting the substantial amounts received by Ana Botín and Héctor Grisi. While the justification of these increases is included, the emphasis on the high figures might overshadow the bank's overall performance and other relevant factors. The headline (if any) would significantly influence the framing.
Language Bias
The language used is generally neutral, but the repeated emphasis on the high amounts received by the executives, and the use of phrases such as "historic profit" and "double-digit increase," might subtly influence the reader towards perceiving the increases as excessive.
Bias by Omission
The article focuses heavily on the compensation of top executives, particularly Ana Botín and Héctor Grisi. While it mentions the average salaries of Spanish and overall employees, it lacks detail on the compensation structure for other employee levels within the bank. This omission prevents a comprehensive understanding of the overall compensation picture within Santander.
Sustainable Development Goals
The article highlights significant pay increases for top executives at Banco Santander, while mentioning a 3% increase for employees in Spain and a 5% increase for all employees. This disparity in pay raises raises concerns about income inequality. The substantial increase in CEO Ana Botín's compensation (12%) to €13.7 million, compared to the relatively smaller increases for average employees, exacerbates this inequality. While the bank justifies these increases based on performance and market comparisons, the significant difference in pay growth between top executives and average employees widens the income gap, hindering progress towards SDG 10: Reduced Inequalities.