Menu

EDP Renewables 2013 Annual Report

Management and Supervision III

NOMINATIONS AND REMUNERATIONS COMMITTEE

Pursuant to Article 29 of the Company’s Articles of Association and Articles 8 and 9 of its Regulations, the Nominations and Remunerations Committee shall consist of no less than three (3) and no more than six (6) members.

At least one of its members must be independent and shall be the Chairperson of the committee.

The members of the committee shall not be members of the Executive Committee. The Nominations and Remunerations Committee is constituted by independent members of the Board of Directors, in compliance with Recommendation 44 of the Unified Code of Good Governance approved by decision of the Board of the Spanish Securities Committee (hereinafter the Comisión Nacional del Mercado de Valores – CNMV), as amended by CNMV Circular 4/2007 of December 27th, which lays down that the Nominations and Remunerations Committee must be entirely made up of external Directors numbering no fewer than three (3). As it is made up of independent Directors (in Spain the committee may only be comprised of Directors), it complies to the extent possible with the recommendation indicated in chapter II.3.1 of the Portuguese Code of Corporate Governance.

The Nominations and Remunerations Committee consists of three (3) independent members, plus the Secretary. The current members are:

  • Jorge Santos, who is the Chairperson
  • António Nogueira Leite
  • Rafael Caldeira Valverde

Additionally, Emilio García-Conde Noriega is the Secretary of the Nominations and Remunerations Committee.

None of the committee members are spouses or up to third-degree relatives in direct line of the other members of the Board of Directors.

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

The Nominations and Remunerations Committee is a permanent body belonging to the Board of Directors with an informative and advisory nature and its recommendations and reports are not binding.

As such, the Nominations and Remunerations Committee has no executive functions. The main functions of the Nominations and Remunerations Committee are to assist and report to the Board of Directors about nominations (including by co-option), re-elections, dismissals, and the remuneration of the Board members and its position about the composition of the Board of Directors, as well as the nominations, remuneration, and dismissal of senior management personnel. The Nominations and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and the senior management. These functions include the following:

  • Defining the standards and principles governing the composition of the Board of Directors and the selection and nominations of its members;
  • Proposing the nominations and re-election of Directors in cases of nominations by co-option and in other cases for the submission to the General Shareholders’ Meeting by the Board of Directors
  • Proposing to the Board of Directors the candidates for the different committees;
  • Proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method, and amounts payable to the Directors;
  • Making proposals to the Board of Directors on the conditions of the contracts signed with Directors;
  • Informing and making proposals to the Board of Directors regarding the nominations and/or removal of executives and the conditions of their contracts and generally defining the hiring and remuneration policies of executive staff;
  • Reviewing and reporting on incentive plans, pension plans, and compensation packages; • Any other functions assigned to it in the Articles of Association or by the Board of Directors.

FUNCTIONING OF THE NOMINATIONS AND REMUNERATIONS COMMITTEE

In addition to the Articles of Association, the Nominations and Remunerations Committee is governed by its Regulations approved on June 4th, 2008. The committee’s regulations are available at www.edprenovaveis.com.

This committee shall meet at least once every quarter and also whenever its Chairperson sees fit. This committee shall draft minutes of every meeting held and inform the Board of Directors of its decisions at the first Board meeting held after each committee meeting. Decisions shall be adopted by simple majority. The Chairperson shall have the deciding vote in the event of a tie.

2013 ACTIVITY

In 2013 the main proposals made by the Nominations and Remunerations Committee were:

  • Propose the names of the candidates for the election by co-option of new members for the Board of Directors due to the vacancies positions;
  • Performance evaluation of the Board of Directors and the Executive Committee; • Drafting update and consequent approval of the Performance Evaluation and Remuneration Model for 2011-2013;
  • Drafting of the Remuneration Policy to propose to the Board of Directors and to be approved at the General Shareholders Meeting;
  • Annual Report of their activities.

RELATED-PARTY TRANSACTIONS COMMITTEE

Pursuant to Article 30 of the Articles of Association, the Board of Directors may set up other committees, such as the Related-Party Transactions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Party Transactions Committee shall be independent, although in the case of this committee it has one non-independent member, Nuno Maria Pestana de Almeida Alves.

Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDPR, its majority shareholders or its Directors and, if this is the case, meet the other requirements of the applicable legislation.

The Related-Party Transactions committee consists of two (2) independent members and one (1) non- independent member, as described above, plus the Secretary.

The current members are:

  • José Ferreira Machado, who is the Chairperson
  • João Mello Franco, Chairperson of the Audit and Control Committee
  • Nuno Alves

Additionally, Emilio García-Conde Noriega is the Secretary of the Related Party Transactions Committee.

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

The Related Party Transactions Committee is a permanent body belonging to the Board of Directors that performs the following duties, without prejudice, to others that the Board may assign to it:

  • Periodically reporting to the Board of Directors on the commercial and legal relations between EDPR or related entities and EDP or related entities;
  • In connection with the approval of the Company’s annual results, reporting on the commercial and legal relations between the EDPR Group and the EDP Group and the transactions between related entities during the fiscal year in question;
  • Ratifying transactions between EDPR and/or related entities with EDP and/or related entities by the stipulated deadline in each case, provided that the value of the transaction exceeds EUR 5,000,000 or represents 0.3% of the consolidated annual income of the EDPR Group for the fiscal year before;
  • Ratifying any modification of the Framework Agreement signed by EDPR and EDP on May 7th, 2008;
  • Making recommendations to the Board of Directors of the Company or its Executive Committee regarding the transactions between EDPR and related entities with EDP and related entities;
  • Asking EDP for access to the information needed to perform its duties;
  • Ratifying, in the correspondent term according to the necessities of each specific case, the transactions between Qualifying Holdings other than EDP with entities from the EDP Renováveis Group whose annual value is superior to EUR 1,000,000;
  • Ratifying, in the correspondent terms according to the necessities of each specific case, the transactions between Board Members, “Key Employees” and/or Family Members with entitied from EDP Renováveis Group whose annual value is superior to EUR 75,000;

If the Related Party Transactions Committee does not ratify the commercial or legal relations between EDP or its related entities and EDP Renováveis and its related entities, the validity of such relations must be approved by 2/3 of the members of the Board of Directors, provided that at least one half of the members proposed by entities other than EDP, as well as those related with Qualifying Holders other than EDP, Board Members, “Key Employees” and/or there Family Members, including independent directors, vote in favour, except when a majority of members expresses its approval prior to submitting the matter to the Related Party Transactions Committee for its approval.

The terms of part 1 above shall not apply to transactions between EDP or its related entities and EDP Renováveis or its related entities are carried out under standardized conditions and are applied equally to different related entities of EDP and EDP, even standardized price conditions.

FUNCTIONING OF THE RELATED-PARTY TRANSACTIONS COMMITTEE

In addition to the Articles of Association, the Related-Party Transactions Committee is governed by its regulations approved on June 4th, 2008 and amended on February 28th, 2012. The committee’s regulations are available at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit.

This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.

2013 ACTIVITY

In 2013, the Related Party Transactions Committee revised, approved and proposed to the Board of Directors the approval of all agreements and contracts between related parties submitted to its consideration.

Chapter E – I, topic 90, of this report includes a description of the fundamental aspects of the agreements and contracts between related parties.