69. REMUNERATION POLICY
Pursuant to Article 26 of the Company’s Articles of Association the Directors shall be entitled to a remuneration which consists of (i) a fixed amount to be determined annually by the General Shareholders’ Meeting for the whole Board of Directors and of (ii) attendance fees regarding the Board Meetings.
The above mentioned article also establishes the possibility of the Directors being remunerated with Company shares, share options, or other securities granting the right to obtain shares or by means of share-indexed remuneration systems. In any case, the system chosen must be approved by the General Shareholders’ Meeting and comply with current legal provisions.
The total amount of the remunerations that the Company will pay to its Directors under the terms provided in the previous paragraphs shall not exceed the amount determined for that effect by the General Shareholders’ Meeting. The maximum remuneration approved by the General Shareholders’ Meeting, for all the members of the Board of
Directors was EUR 2,500,000 per year.
Pursuant to Article 26.4 of the Company’s Articles of Association, the rights and duties of any kind derived from the condition of Board Member shall be compatible with any other rights and obligations either fixed or variable that could correspond to the Board Members as a consequence of other employment or professional engagements, if any, carried out in the Company. Variable remuneration resulting from said contracts or from any other relationship, including being a Board Member, will be limited to a maximum annual amount to be established by the General Shareholders’ Meeting.
The maximum remuneration approved by the General Shareholders Meeting for the variable remuneration for all the executive members of the Board of Directors was EUR 600,000 per year.
EDPR, in line with EDP Group corporate governance practice, has signed an Executive Management Services Agreement with EDP, under which the Company bears the cost for such services to some of the members of the Board of Directors to the extent their services are devoted to EDPR.
The non-executive Directors only receive a fixed remuneration, which is calculated on the basis of their work exclusively as Directors or with their membership on the Nominations and Remunerations Committee, Related Party Transactions Committee, and the Audit and Control Committee. Those members who are seated in two different Committees don’t accumulate two remunerations. In these cases, the remuneration to be received is the one that corresponds to the highest value.
EDPR has not incorporated any share remuneration or share purchase options plans as components of the remuneration of its Directors.
No Director has entered into any contract with the Company or third parties that have the effect of mitigating the risk inherent in the variability of the remuneration established by the Company.
In EDPR there aren’t any payments for the dismissal or termination of Director’s duties.
The remuneration policy for the Directors of the Company is submitted each year to the General Shareholders Meeting for approval.
70. REMUNERATION STRUCTURE
The remuneration policy proposed by the Nominations and Remuneration Committee and approved by the General Shareholders’ Meeting on April 23rdth, 2013 (the Remuneration Policy), defines a structure with a fixed remuneration for all members of the Board of Directors and a variable remuneration, with an annual component and a multi-annual component for the members of the Executive Committee.
For the period 2011-2013, it was decided to maintain the remuneration structure in terms of its components, as well as to keep the same nominal value of fixed annual component as the one in force during the 2009-2010 period, revising the KPI’s (Key Performance Indicators) for variable multi-annual and annual components.
71. VARIABLE REMUNERATION
Variable annual and multi-annual remuneration applies to the members of the Executive Committee.
Variable annual and multi-annual remuneration will be a percentage of fixed annual components, with a superior weight for multiannual vs. annual component (120% vs. 80%). That is, the value of the variable remuneration may range between 0% and 85% of the 80% of the annual gross fixed remuneration, in the case of the annual variable, and between 0% and 85% of the 120% of the annual gross fixed remuneration, in the case of the multi-annual variable.
The KPIs (Key Performance Indicators) used to determine the amounts of the annual and multi-annual variable regarding to each year of the term are aligned with the strategic grounds of the Company: growth, risk control and efficiency. These are the same for all members of the Executive Committee, although with specific targets for the platforms in the case of COO’s:
- The relative performance of the Total Shareholder Return of EDP Renováveis vs. Benchmark, (TSR vs. Wind peers & PSI 20);
- EDP Renováveis growth (Incremental MW and profitable ready to build pipeline)
- The risk – result of EDP Renováveis (ROIC Cash; EBITDA and net profit)
- Efficiency (technical availability, OPEX/MW, CAPEX/MW).
- Environmental and social perspectives (i- the performance of the Sustainability Index applied to EDPR (DJSI method), ii- Employee satisfaction survey, iii- Appreciation of the Remuneration Committee).
According to the Remuneration Policy approved by the General Shareholders’ Meeting, the maximum variable remuneration (annual and multi-annual) is applicable if all the above mentioned KPI’s were achieved and the performance evaluation is equal or above 110%.
72. MULTI-ANNUAL REMUNERATION
According to the Spanish law, the multi-annual variable remuneration is only payable if the predefined goals are achieved and is paid the year after the end of the term of office to which it applies.
73. VARIABLE REMUNERATION BASED ON SHARES
EDPR has not allocated variable remuneration on shares and does not maintain Company shares that the Executive Directors have had access to.
74. VARIABLE REMUNERATION BASED ON OPTIONS
EDPR has not allocated variable remuneration on options.
75. ANNUAL BONUS AND NON-MONETARY BENEFITS
The key factors and grounds for any annual bonus scheme are described on topics 71 and 72. Additionally, the Officers, with the exception of the CEO received the following non-monetary benefits: Company car and those who are expatriated receive housing allowance. In 2013, the non-monetary benefits corresponded to EUR 162,315.86.
The Directors do not receive any relevant non-monetary benefits as remuneration.
76. RETIREMENT SAVINGS PLAN
The retirement savings plan for the members of the Executive Committee that are also Officers, acts as an effective retirement supplement with a range between 3% to 6% of their annual salary. The percentage is defined according with the retirement savings plan applicable in their home country. The retirement savings plan has been approved by the General Shareholders’ Meeting on April 23rd, 2013 (the Remuneration Policy included the retirement Plan).