The Telefónica shareholders' meeting has voted this Friday in favor of abolishing the extraordinary and discretionary bonuses that until now top executives received as a reward for certain performances in the success of large-scale corporate operations, as included in the new remuneration policy proposed by the board.
The Board of Directors of the telecommunications company had included this item on the agenda, after the tension that the approval of these remunerations caused at the meeting last year. So, although it passed, it did so by a slim margin with 43% of the votes against.
Faced with the risk that a similar proposal this year could be rejected, the company's leadership has been working during the year with the voting advisors of the large shareholders, (companies specialized in representing the large world investors) and has decided to propose to the meeting to suppress this remuneration in order to guarantee peace with its shareholders, as has happened.
In 2022, José María Álvarez Pallete earned 6.78 million euros in 2022, an amount 22% less than in 2021 due to the absence of the extraordinary bonus of a fixed salary annuity that he received last year for the operations of Telxius and Virgin MediaO2. Those operations in 2021 had reported an extraordinary income of 1.92 million. In the case of the CEO, Ángel Vilá, the extraordinary ones for 2021 amounted to 1.6 million euros.
The company has decided to cut these extras for the salaries of the top executives in the same year in which it has agreed a salary increase to its employees of 7.8%.
Despite this remuneration change, the meeting with shareholders this 2023 has not been as relaxed as might have been expected. One of the shareholders gathered at the Las Tablas headquarters has vehemently criticized the work of José María Álvarez Pallete at the head of the main Spanish telecom to such an extent that he has come to raise his removal as part of the points to be voted on. According to the information, without detailing percentages, provided by the company, this proposal has been rejected and the executive president maintains his position.
In this way, he will be able to continue defending the banner of claiming the participation of the large technological multinationals in the cost of data infrastructures, as he claimed again yesterday at the meeting. Pallete used a comparative graph to highlight the contradiction of the current situation. "No one would understand that 60% of the capacity of highways, electricity networks, water or food was monopolized by 6 users, leaving the remaining 40% for the rest of the world."
The company's shareholders' meeting, which was held this Friday at the Las Tablas headquarters in Madrid, has once again heard their demand. “A new world requires new rules. Rules that get the best out of all actors. Rules that balance the playing field. Rules that encourage collaboration in this new world. Rules that encourage the responsible and equitable use of these new networks ”, she insisted.
During his speech, Pallete reviewed the balance sheet at the helm of the company in the seven years he has been in charge. “We have invested more than 55,000 million euros, generated more than 21,700 million in net profit and more than 32,000 million in free cash flow. We have allocated 17,300 million euros to remunerate our shareholders, increased our net worth by 9,300 million, and reduced our net debt by more than 23,000 million”, he assured.
After reviewing how Telefónica has managed to advance in the development of the strategic plan defined in November 2019, the manager stressed that Telefónica has ceased to be the company in which it was born 99 years ago to connect people by voice to become " another company". “We have transformed our revenue to be more relevant. Today, 73% of our service revenues derive from broadband and digital services, compared to 46% in 2015. This is revenue that comes from the new world. We are another company ”, he stated.
The shareholders' meeting has also approved a dividend of 0.30 euros per share on account of the year in two payments, together with the amortization of 0.43% of the capital, which means reducing the capital by 24.77 million euros.
