Pursuant to Article 28 of the Regulations governing the board of directors, the appointments and remunerations committee was created by the board of directors of Abengoa, S. A. on 24th February 2003, for the purpose of incorporating the recommendations regarding the appointments and remunerations committee into the Financial Systems Reform Law 44/2002. Said board of directors also approved its Internal Systems Regulations.
The current composition of the committee is as follows:
The secretary was appointed during the appointments and remunerations committee meeting held on 28th January 2004 through a meeting by circular resolution; the chairman was however appointed during the appointments and remunerations committee meeting held on 23rd July 2012.
Consequently, the appointments and remunerations committee is presently comprised of one executive and four non-executive board members, in compliance with the requirements set forth in the Financial System Reforms Law. Likewise, in accordance with the provisions of Article 2 of its Internal Regulations, the post of committee chairman is compulsorily held by a non-executive board member.
The following are the duties and competencies of the appointments and remunerations committee:
To execute the duties listed above, the appointments and remunerations committee shall meet as many times as necessary and, at least, once every six months. They shall also meet on the behest of the chairman. Lastly, a meeting shall be deemed valid if all its members are present and they decide to hold a session.
The committee held two meetings during the 2012 financial year; the most relevant among the issues dealt with on the agenda were the proposals of appointment and renewal of the board of directors, as well as the verification that the conditions that were basis for the appointment of the board members and the nature or type thereof continued to be upheld.
The committee is considered validly constituted if the majority of its members are present. Only non-executive board members may act as representatives.
Decisions taken shall be deemed valid if favourably voted by the majority of the committee members, present or represented. Situations of tie shall be resolved by chairman’s vote.
The company’s head of remunerations shall act as secretary in the committee meetings.
2012 Financial year
This 2012 financial year board members’ remuneration policy report was prepared by the appointments and remunerations committee pursuant to the stipulations of Article 28 of the Regulations governing the board of directors of Abengoa SA.
Absolutely subject to the principles of transparency and information, this report entails Abengoa SA’s remuneration policy for the members of its board of directors, clearly distinguishing between the salaries of the company’s top management executive board members and the salaries of its non-executive board members, incorporated in the general remuneration policy applicable to the whole staff.
Abengoa deems it crucial to maintain policies geared towards proposing long-term professional careers in the group. Given the extremely competitive nature of Abengoa’s sphere of activities, the achievement of its goals and objectives greatly depends on the quality of the persons holding key posts and leading the organization, their work capacity, dedication to, and knowledge of, the business.
These premises determine the group’s policy of remuneration in general, that of the board members in particular, and especially that of the executives, and it should make it possible to attract and retain the best amongst the professionals.
Consequently, the aim of the policy of remuneration of board members is as follows:
La estruThe structure of remuneration of board members, adjusted to comply with the legal provisions (specifically, articles 217 and following) of the Corporations Act, the Bylaws (article 39) and the Regulations governing the board of directors, is comprised of the following elements:
Executive-duty salary packages include the following basic elements:
(a) Fixed remuneration
This amount must be competitive in comparison to those on the market and commensurate with the leadership position that Abengoa holds. It must be determined through market studies by external consultants. The fixed salary consists of the following:
(b) Variable annual remuneration (bonus)
The variable annual remuneration (or bonus) for executive board members is basically linked to the fulfilment of objectives. Said objectives are in reference to gross cash flows / ebitda for some board members or to earnings after tax (EAT) for others. Based on these criteria, a range of total variation of the variable remuneration of executive board members is estimated at the start of financial year.
The fixed remuneration therefore includes the salary level amount and the special responsibility allowance, payable monthly.
The variable remuneration is the annual bonus payable in bulk.
The table below shows a detail of the total remuneration of the board members, for the 2012 financial year:
Note:
(1) Represented by José B. Terceiro Lomba
(2) Until 02/23/2012
(3) From 02/24/2012
In the exercise of the duties conferred thereupon, the appointments and remunerations committee periodically reviews the policy of remuneration of the board of directors, updating it with proposals deemed relevant both with regards to concepts as well as to amounts.
As regards the ongoing financial year, the variable portion of the remuneration for executive board members shall be determined based on the following:
The board of directors of Abengoa, S.A. have agreed to maintain the 2013 financial year remuneration policy in line with that of the preceding financial year.
The remuneration policies for future financial years, which will still contain fixed and variable components, shall consider market studies done by first rate consultancies specialized in compensation.
This Report was approved by the board of directors of Abengoa SA in its session held on 21st February 2013, on the proposal of the appointments and remunerations committee.