Consolidated Financial Statements and Consolidated Management ...

Process for determining the remuneration of members of the Board of Directors and the clauses in the bylaws
Article 42 of the Bylaws and Article 36 of the Board Regulations set forth that the remuneration of directors shall consist of a set annual amount and
allowances for attending meetings of the Board of Directors and of its standing and advisory committees, the amounts of which shall be set by the
General Shareholders’ Meeting.
Additionally and independent of the remuneration described in the above paragraph, share-based remuneration systems, or those involving
assigning shares or stock options, may be put in place for directors. Implementation of these remuneration systems must be agreed by the General
Shareholders’ Meeting, which shall determine the value of the shares that are taken as a reference, the number of options, the exercise price of the
stock options, the duration of this remuneration system and any other conditions deemed appropriate. Likewise, similar remuneration systems may
be established for other company personnel, directors or otherwise, provided they comply with the law.
In addition to the remuneration referred to in the above two paragraphs, executive directors are entitled to receive additional remuneration for the
executive duties they perform beyond those contemplated in the post of director. In particular, this remuneration shall be comprise the following
items: (a) a fixed component, adapted to the services and responsibilities assumed; (b) a variable component, referenced to a company executive
directorship performance indicator; (c) an attendance component, comprising suitable insurance and benefits systems; and (d) indemnity in the
event of dismissal or any other type of termination of the legal relationship with the company that is not due to breaches attributable to the director.
The determination of the amount of the remuneration components referred to in this paragraph shall be based on market conditions and shall take
into account the responsibility and degree of commitment involved in the role assigned to each executive director.
Along with the Annual Corporate Governance Report, it is expressly set forth that the Board shall draw up an annual director remuneration report,
which shall include complete, clear and comprehensible information on the company’s remuneration policy approved by the Board for the year in
course, as well as for future years, as appropriate. It shall also include an overall summary of the remuneration policy implemented during the year,
as well as a breakdown of the individual remuneration due to each of the directors.
The annual director remuneration report, the company’s remuneration policy approved by the Board for the year in course, the policy for future
years, the overall summary of how the remuneration policy was implemented during the financial year, as well as the breakdown of the individual
remuneration due to each director shall be disclosed and brought before the Ordinary General Shareholders’ Meeting as a separate point on the
agenda for a consultative vote.
At the General Meeting held on 29 June 2011, and in accordance with the Article of the Bylaws mentioned above, a resolution was taken to set the
gross total amount of the fixed remuneration and attendance allowances for the Board of Directors at one million one hundred thousand euros
(€1,100,000) with effect as of 2011, excluding other kinds of remuneration corresponding to the executive director for items other than sitting on
the Board.
Indicate whether the plenary sessions of the Board are reserved for approving the following decisions.
The appointment and removal of senior managers, as well as their compensation clauses, as proposed by the Chief Executive
Director of the company.
The remuneration of directors and, in the case of executives, any additional remuneration for executive responsibilities and any
other conditions that their contracts should reflect.
NO
YES
B.1.15. Indicate whether the Board of Directors approves a detailed remuneration policy and specify the issues covered by said policy:
YES
Amount of the fixed components, with a breakdown, as applicable, of the expenses for participating on the Board and its
committees, and an estimate of the corresponding annual fixed remuneration
Variable remuneration items
Main characteristics of the benefits systems with an estimate of their amount or equivalent annual cost.
Conditions that must apply to the contracts of those who, being executive directors, perform senior management functions.
YES
YES
YES
YES
B.1.16. Indicate whether the Board submits a report on the remuneration policy of the directors as a separate point on the agenda to be voted
on by the General Shareholders’ Meeting, for consultation purposes. If so, explain the aspects of the report concerning the remuneration policy
approved by the Board for future years, the most significant changes in these policies compared to the policy applied during the year and an
overview of how the remuneration policy was applied during the year. Describe the role carried out by the Remuneration Committee and if
external advice has been used, identify the external consultants that provided it:
YES
Issues defined in the remuneration policy
Article 42 of the Bylaws and Article 36 of the Board Regulations faithfully reflect the new Article 61 c of Act 24/1988 of 28 July on the Securities Market,
which expressly sets forth that, along with the Annual Corporate Governance Report, the Board shall draw up an annual director remuneration report,
which shall include complete, clear and comprehensible information on the company’s remuneration policy approved by the Board for the year in
course, as well as for future years, as appropriate. It shall also include an overall summary of the remuneration policy implemented during the year, as
well as a breakdown of the individual remuneration due to each of the directors.
The annual director remuneration report, the company’s remuneration policy approved by the Board for the year in course, the policy for future
years, the overall summary of how the remuneration policy was implemented during the financial year, as well as the breakdown of the individual
remuneration due to each director shall be disclosed and brought before the Ordinary General Shareholders’ Meeting as a separate point on the
agenda for a consultative vote.
In this regard, it should be noted that, in accordance with the Bylaw and regulation provisions mentioned above, the annual director remuneration
report for 2010 was brought before the General Meeting held on 29 June 2011 as a separate item on the agenda for a consultative vote, the result of
which were as follows:
- Votes in favour: 98.06%
- Votes against: 0.02%
- Abstentions: 1.92%
ANNUAL CORPORATE GOVERNANCE REPORT 23