Strong vote of punishment from the Telefónica Board relating to the compensation of Pallete and Vilá | Economy | EUROtoday

Telefónica held its 2026 General Shareholders’ Meeting on March 26 in a session marked by a big vote of punishment by institutional traders on the corporate’s remuneration coverage. The annual remuneration report, which included compensation for a complete of 78.4 million euros paid to José María Álvarez-Pallete and Ángel Vilá, obtained the assist of solely 65.29% of the capital current or represented, the bottom degree of assist of the whole day.

According to the official scrutiny knowledge, this merchandise on the agenda confronted a rejection of 18.74% of the votes and an abstention of 15.97%, evidencing the fracture between the board of administrators and enormous worldwide funds similar to Norges Bank or Calpers given the situations of departure of the earlier administration management. This determine signifies that greater than a 3rd of the shareholders who participated within the assembly averted giving their specific assist to the remuneration coverage of the earlier 12 months, a consequence that, though not binding as a result of it’s merely advisory, sends a reputational warning sign to the corporate’s governing physique.

The origin of this investor hostility lies within the million-dollar quantities paid to the earlier administration management, who was dismissed in January 2025. Álvarez-Pallete, who left the manager presidency, obtained a complete of 44.5 million euros, and the previous CEO Ángel Vilá obtained 33.9 million euros.

Norges opposition

These quantities activated the opposition of a number of the massive sovereign and worldwide funds, with Norges Bank Investment Management (NBIM) within the lead, as EL PAÍS/Cinco Días reported. The Norwegian fund, proprietor of 1.5% of Telefónica’s shares, justified its vote in opposition to by referring to an absence of transparency on the a part of the board and the necessity for extraordinary income to have a transparent enterprise justification.

For NBIM, the cost of 4 years of wage as compensation is unacceptable, when worldwide good governance practices advocate limiting these compensations to a most of two years. Likewise, the fund argued that senior administration compensation ought to be principally linked to shares locked up for intervals of 5 to 10 years to align the pursuits of managers with the long-term worth of the corporate.

Norway’s place was joined by the California pension funds, Calpers and Calstrs, which additionally forged unfavourable votes on the remuneration report. This opposition bloc adopted the suggestions of the 2 fundamental voting advisors out there, ISS and Glass Lewis. Both organizations described the figures as disproportionate and unrelated to the market scenario. Glass Lewis particularly highlighted the disconnect between the remuneration of the highest administration and the inventory market efficiency of the corporate, whose inventory has skilled a decline of 16% within the final twelve months, coinciding with an adjustment within the dividend coverage.

As a measure to appease criticism, Telefónica offered to the board a brand new remuneration coverage that may come into power in 2027 and can final till 2029. The new design, included in level VII of the agenda, obtained the assist of 81.29% of shareholders. This plan introduces extreme restrictions, such because the prohibition of concurrently receiving severance pay and social safety plan rights. In addition, the utmost compensation will probably be diminished to 2 years, aligning with worldwide requirements. This change in fact means that the present protest was particularly directed on the exit situations agreed with the earlier staff.

Discontent with García Blanco

The discontent additionally carried over to the re-election of María Luisa García Blanco as councilor, which garnered the best rejection amongst directors, with 2.94% votes in opposition to and 0.55% abstentions. Critical traders recognized her as technically accountable, from her place on the appointments and remuneration committee, for authorizing the questioned funds. In distinction, different appointments similar to Mónica Rey Amado or Jane Thompson obtained assist ranges greater than 98.9%.

The determine of the present president, Marc Murtra, didn’t escape the scrutiny of los proxy advisors. Glass Lewis targeted on his mounted wage of 1.9 million euros, questioning whether or not this remuneration just isn’t extra immediately linked to particular profitability targets for the shareholder. However, the administration of the board of administrators was ratified by a big majority of 98.37% of the votes.

The approval of the agreements was potential because of the stable assist of the brand new secure core of shareholders. The State Society of Industrial Participations (SEPI), with 10% of the capital, along with CriteriaCaixa (9.9%), Saudi Telecom (9.96%) and BBVA (5%), added their positions to ensure the institutional stability of the operator. In this sense, the SEPI deserted the place of abstention that it maintained final 12 months on remuneration issues to assist the council’s proposals, thus neutralizing the load of the block of worldwide funds.

At the unusual degree, the board validated the 2025 annual accounts and the administration report with a assist of 99.24%. Point VI was additionally permitted, referring to shareholder remuneration, which contemplates a dividend of 0.15 euros gross per share charged to reserves, payable on June 18, 2026, with assist of 99.21%. Regarding the audit, PwC will proceed as auditor for the monetary 12 months 2026 and can assume the interval 2027-2029, after receiving a assist of greater than 99.1% in each factors of the agenda.

The Telefónica 2026 Board registered a quorum of 65.71% of the share capital. In complete, 27,661 shareholders attended, of which 5,057 have been current and 22,604 have been represented. The complete variety of shares that participated within the vote amounted to three,726,001,130.