At the end of the 2024 financial year, the Ibex 35 companies maintained 580 shielded managers and executives, with severance payments that in some cases reach up to five years of full salary, well above the two annuities recommended by the National Securities Market Commission (CNMV) at most.
The number of selective managers who have the so-called 'golden parachutes' agreed in their contracts has been falling since 2019 and is at the lowest figure since 2012. However, in 2024 the decrease was just 1%, the lowest in recent years.
According to the latest report just published by the stock market regulator, only four Ibex firms (Acciona Renovables, ACS, IAG and Solaria) did not have clauses of this type at the end of last year, the same as in 2023.
The amount of compensation is highly variable. The last recommendation included in the CNMV good governance code since 2015 (specifically, number 64) is that payments for termination or termination of the contract do not exceed “two years of the total annual remuneration” and “whatever their nature and justification.” That is, also counting the so-called non-competition commitments (compensation for a manager who leaves for not leaving for a company in the sector during a certain period).
There are eleven companies that acknowledge in their annual reports to the regulator that they totally or partially fail to comply with this premise. These are Amadeus, Caixabank, Enagás, Endesa, Fluidra, Grifols, Iberdrola, Mapfre, Naturgy, Sacyr and Telefónica. Those that provide the most years of compensation above that limit of two years are Iberdrola, Telefónica, Fluidra and Grifols.
Thus, Iberdrola guarantees its president, Ignacio Sánchez Galán, the highest paid executive on the Ibex (he earned 14,145 million in 2024), two full years of severance pay plus another two for the contractual competition pact, whose validity period in 2023 was extended from two to three years. For “some directors” who, “due to their responsibility, are considered to contribute decisively to the creation of value”, the compensation “depends on the seniority in the position and the reasons for the director's dismissal, with a maximum of five (5) annual payments.”
Iberdrola emphasizes that since 2011, “for new contracts with members of senior management” a limit of two years has been set and that these 21 shielded executives “represent 2.66% of the executives and other professionals with management responsibilities of the group.” Of them, “only 10 (1.3% of said group) have a compensation limit greater than two years, which represents a reduction of 88.8% in the number of beneficiaries since 2003.”
At Telefónica, the previous president, José María Álvarez Pallete, dismissed in January with 23.5 million in compensation and another 9.6 million in salary and bonus, had four years of salary agreed upon in the event of dismissal, the same as the previous CEO, Ángel Vilá, dismissed last February. For the operator's senior managers, the compensation is “at most” three years (the last fixed remuneration and the average of the last two variables) “and one more depending on seniority in the company.”
At Grifols, “the Group has agreements with employees and directors by virtue of which they could unilaterally terminate their employment contracts with the Company, being entitled to compensation ranging from one to five years of salaries in the event of takeover of the Company.”
In the event of dismissal, the CEO of Grifols, Nacho Abia (in office since April 2024, following the restructuring of the pharmaceutical company's leadership that caused the report by the bearish fund Gotham), would pocket the multi-year bonus that he agreed to in his three-year contract, the fixed remuneration, the annual bonus and the shares that he would have received in that three-year period. years.
At Fluida, the executive president, Eloy Planes, has the right to two annuities (fixed and gross variable) for termination of contract and another two permanent annuities for two years of non-competition.
At the other extreme (within the companies that maintain shields) is Maurici Lucena, president of Aena (51% owned by the State) and the lowest paid executive on the Ibex due to its status as a public company (in 2024 he earned 192,000 euros, less than the vast majority of senior executives and senior managers on the selective).
Lucena's compensation for termination would be seven days of annual cash compensation per year of service, with a limit of six monthly payments. The same as Aena's senior managers who are not public sector employees (those who are cannot have these clauses). The airport manager introduced these compensations in 2021, in the middle of the pandemic, for the first time since its IPO in 2014.
More Shields
The slight drop in the number of shielded Ibex managers in 2024 is explained because, breaking the trend of recent years, four selective companies decided to increase the number of people who had these clauses: Repsol, Banco Sabadell, Banco Santander and Logista.
Repsol stands out, which has traditionally stood out for concentrating a good part of these mechanisms, which companies justify as an incentive to retain the talent of their top managers. The oil company closed last year with 223 armored executives, six more in one year, although far from the 309 it accumulated in 2014. The number had been reducing since then and until last year.
Repsol has eight general directors protected (one less than in 2023) and another 215 executives (in 2023 there were 208). The CEO, Josu Jon Imaz, has agreed upon compensation of two fixed and variable annuities (including non-competition compensation). The compensation of the general directors is 24 monthly payments. Those of managers appointed before December 2012 are calculated based on age, seniority and salary; those of those appointed later, depending on salary and seniority, within a range of between 12 and 24 monthly payments, or the legal compensation if it is higher.
Banco Sabadell also increased the shields last year, which had been reducing them since 2019. After the failed hostile takeover bid that BBVA launched in 2024, the Vallesan bank went from 33 to 40 shielded directors; in Banco Santander it went from 22 to 25 and in Logista, from 11 to 13.
Ten companies (one more than in 2023) reduced the number of shielded managers last year. Among them, BBVA, which went from 52 to 50. The bank points out that “it does not have commitments to pay compensation to executive directors”, although it does guarantee two years of remuneration for non-competition in the event of dismissal for the president, Carlos Torres (whose strategy has been called into question after the takeover failure, and who last Friday ruled out resigning due to this fiasco), and the CEO, Onur Genç.
Grifols (with 31, eight less than in 2023), Caixabank (30, three less), Iberdrola (21, two less), Unicaja (21, one less), Inditex (17, one less), Naturgy (13, one less), and Acerinox and Indra (in both cases, 8, one less) also reduced the number of shielded executives in 2024.
The CNMV excepts Arcelormittal (based in Luxembourg) and Ferrovial in its reports, after their move to the Netherlands. The novelty this year is Puig, recently landed on the Ibex, and which has protected its executive president, Marc Puig, with 2 annuities of fixed salary.
Last year, twelve firms with shielded directors maintained the number of people with these clauses: Endesa (15), Fluidra (10), Telefónica (9), Enagás (9), Mapfre (5), Rovi (3); Cellnex, Colonial and Merlin Properties (2 each), and Redeia and Sacyr (1 each).
The records of 2013 and 2014
The CNMV has been forcing companies to publish this information in their corporate governance reports since 2004. The maximum number of shielded executives was reached between 2013 and 2014, with 833 and 865, respectively.
The number of people with clauses of this type took a spectacular leap in 2013. That year, the obligation to publish the shields of all administrative, management and employee positions was expanded (in the previous model, this information was requested only for members of senior management). This distorted the comparison with 2012, when the then minister Luis de Guindos promised the European Commission an “extremely aggressive” labor reform to make dismissals cheaper in Spain.
At first, the CNMV published each year the aggregate figure of the number of companies with shield clauses and the total number of shielded directors. It did so until its 2012 report, when the regulator estimated that there were 237 shielded Ibex directors.
The following year, one of the annual reports of the CNMV (then chaired by the popular Elvira Rodríguez) eliminated the aggregate data and left blank the information on how many shields each Ibex firm had that year (can be seen in this link looking for “armor”). Today the CNMV cannot find an explanation: “Some dumping error must have occurred. Given the age, it does not seem feasible to know the reason for the incident.”