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ANNUAL REPORT 2011
0.4. When the structure or the corporate
governance practices deviate from the CMVM’s
Recommendations or from other Corporate
Governance Codes that the company is subject
to or had voluntarily applied to, the company
shall explain which parts of each code have
not been complied with and the reasons
therefore, and other relevant observations,
as well as the clear part of the Report where
that description can be found.
II.1.2.2. Non-executive members must include
an adequate number of independent members.
The size of the company and its shareholder
structure must be taken into account when
devising this number and may never be less
than a fourth of the total number of the Board
of Directors.
The Company’s management body is composed
of three directors and includes one member,
Prof. Juan Carlos Vázquez-Dodero, who is
a non-executive member. The mentioned
member is a board of director’s member of
affiliated companies, in which he does not
exercise executive functions. He does not
carry out any activities or business with the
company, as per the provisions of articles
397 and 398 of the CSC. However, he does
not fulfil the independence requirements of
art. 414 section 5 of the CSC, although he is
a non executive board of director’s member of
affiliated companies, complying in this sense,
the European Commission Recommendation
of 15th February 2005 on this matter, he
does not comply with the more restrictive
understanding of CMVM. Regarding verification
of the incompatibility requirements, the same
non-executive director does comply with such
rules, except for paragraph c) of section 1 of art.
414 – A of the CSC.
In conclusion, and although the Company’s
administrative structure is not governed by
an audit committee included in its Board
of Directors ( hence the legal requirement
contained in article 423-B of the CSC, namely
its sections 4 and 5, is not imposed on the
latter), according to CMVM understanding the
requirement of point II.1.2.2 of the Corporate
Governance Code is not fulfilled.
II.1.5.1. The remuneration of the Board of
Director’s members shall be structured to
ensure the alignment between their interests
and the long-term interests of the company,
be based on performance evaluation and
discourage excessive risk-taking. To that effect,
the remuneration shall be structured according
to the following:
i)
The remuneration of directors who perform
executive duties shall integrate a variable
component, which determination depends on