Report Functions ARC 2017
1.- Composition, duties and operation
On 17 April 2015, the Board of Directors approved the creation of the Appointments and Remuneration Committee and the appointment of its members.
The rules of organization and operation of the Appointments and Remuneration Committee, described below, are contained in article 16 of the Board of Directors’ Regulations.
The Appointments and Remuneration Committee will comprise within the minimum of three members and maximum of five members, all of whom must be non-executive members. At least two of whom must have the status of independent directors.
The composition of the Appointments and Remuneration Committee comprises the following members:
|Mr. Giampaolo Zambeletti||Chair||Independent|
|Mr. Pierre Blayau||Member||Independent|
|Mr. Josep Maria Coronas Guinart||Member||Dominical|
|Mrs. Marieta del Rivero||Member||Independent|
In accordance with the Board of Directors’ Regulations, the Board of Directors will appoint a Chair among the independent directors. The Chair must be replaced every four years and may be re-elected once a period of one year from his departure has transpired. The Appointments and Remuneration Committee will appoint a Secretary and may appoint a Vice-Secretary that will not be necessarily members of the Committee itself.
The Appointments and Remuneration Committee will meet every time the Board of Directors or its Chair request a report be issued or proposals adopted and, in any case, whenever it is deemed advisable for the proper execution of its duties. It will be convened by the Chair of the Committee, either on his/her own initiative or on the request of the Chair of the Board of Directors or of two members of the Committee itself.
The Appointments and Remuneration Committee will be validly constituted when the majority of its members attend the meeting, either present or represented. The resolutions will be adopted by a majority vote among those in attendance, present or represented.
Without prejudice to the other tasks assigned to it by the Board of Directors, the Appointments and Remuneration Committee will have at least the following basic responsibilities:
- To evaluate the competencies, knowledge and experience required in the Board of Directors. To this end, it will define the duties and skills required of the candidates to fill each vacancy, and it will evaluate the time and dedication needed for them to effectively perform their duties.
- To establish a target for the representation of the under-represented gender on the Board of Directors, and prepare guidance on how to obtain said target.
- To submit to the Board of Directors proposals for the appointment of independent directors for the co-optation thereof or for the submission thereof to the decision of the General Shareholders’ Meeting, as well as proposals for the re-election or dismissal of the aforesaid directors by the General Shareholders’ Meeting.
- To inform on proposals for the appointment of the other directors for the co-optation thereof or for the submission thereof to the decision of the General Shareholders’ Meeting, as well as proposals for the re-election or dismissal of the aforesaid directors by the General Shareholders’ Meeting.
- To inform on proposals for the appointment and dismissal of members of the Senior Management and the basic conditions of their contracts.
- To inform, in advance, on the appointment by the Board of Directors of the Chair and, where applicable, of one or more Vice-Chairs, as well as the appointments of the Secretary and, where applicable, of one or more Vice-Secretaries. The same procedure shall be followed to agree on the dismissal of the Secretary and, where applicable, of each Vice-Secretary.
- To examine and organise the succession of the Chair of the Board of Directors and of the Company’s CEO and, if appropriate, to make proposals to the Board of Directors for such succession to occur in an orderly and well planned manner.
- To propose to the Board of Directors the remuneration policy for the directors and general managers, or for those individuals who perform their senior management duties reporting directly to the Board of Directors, to executive committees or to CEOs, as well as the individual remuneration and all other contractual conditions for executive directors, ensuring compliance therewith.
- To suggest to the Board of Directors which members should form part of each of the Committees.
- To periodically review the remuneration programmes, considering their suitability and returns.
- To propose to the Board of Directors, for submission to the General Shareholders’ Meeting for an advisory vote, the drafting of an annual report on the remuneration of its directors, under the terms of article 541 of the Law on Capital Companies, already other provision which may replace the same in the future.
- To consider the suggestions made to it by the Chair, Board members, company executives or shareholders.
- To provide information regarding the appointment and dismissal of managers who have direct dependence to the Board of Directors or some of its members, as well as establishing the basic conditions of their contracts, including remuneration, and also inform decisions on remuneration of directors, within the statutory framework and, where appropriate, of the remuneration policy adopted by the General Meeting of Shareholders
- To monitor compliance with the corporate governance rules and internal codes of conduct.
- To monitor the corporate social responsibility strategy and practices, and to assess the degree of compliance therewith.
Eight meetings have been held involving the following actions, amongst others:
(A) Corporate Governance:
The relevant report was issued assessing the competence, experience and merits of independent Director, Ms Marieta del Rivero, in view of her appointment as Board member and her joining the ARC.
The restructuring of the composition of the Appointments and Remuneration Committee (ARC) and of the Audit and Control Committee (ACC) was put forward.
The Board was informed favourably as to the appointment of Bertand Kan as vice-chairman of the Board of Directors.
An external evaluation was carried out of the functioning of the Board and Committees, for submission to the Board.
Reports were given on the ACGR (annual corporate governance report) and the ARR (annual report on remunerations).
(B) Activities in relation to remuneration:
The degree of compliance by the CEO with the targets for 2016 was analysed and his performance assessed. Also evaluated were the CEO’s targets for 2017, the relevant proposals being put to the Board.
Based on a comparative study by an external company, the CEO’s remuneration for 2017 was proposed and, consequently, the amendment to the remunerations policy for Directors was prepared and approved for submission to the Board and approval by the Annual General Meeting.
The directors’ remuneration was reviewed in order to adjust it to the market also taking into account the directors’ degree of involvement and commitment.
Based on market studies, the remuneration of the top executives (reporting directly to the CEO) for implementation as of 2018 was analysed, and the corresponding proposal was put to the Board for approval. Also put to the Board were various addenda to the contracts of these directors to include certain clauses that were not duly regulated.
The approval of a Long-term Incentives Plan (ILP 2017-2019) applicable to the CEO and certain key personnel of the company together with the corresponding contracts was prepared and put to the Board.
(C) Activities in relation to Corporate Social Responsibility:
The CSR Master Plan for 2016-2020 was followed up. This instrument integrates all the company’s ethical, environmental and social initiatives whose yearly progress is included in the Integrated Annual Report.
(D) Activities in relation to the Code of Ethics:
A Criminal Offences Prevention Model was adopted and implemented via the Ethics and Compliance Committee.
A training plan was supervised on the Code of Ethics and supplementary Regulations for all employees of the Group in Spain, with a view to applying it to the rest of countries in which the Company operates.
(E) Talent Management:
The ARC analysed the actions carried out to date by Management, basically the Succession Plan and High Potential Programme.