The bonuses will now be paid regularly, in the form of variable remuneration, without any deferral.
Novobanco takes this Friday to the General Meeting, which starts at 3pm, “to decide on the change to the Remuneration Policy for the bank’s Management and Supervisory Bodies”. Jornal Económico questioned Novobanco, which explained that this change arises from the adjustment resulting from the end of the bank’s restructuring period.
The bonuses will now be paid regularly, in the form of variable remuneration, without any deferral. Total remuneration results from the combination of fixed and variable remuneration components.
The end of the restructuring plan has already released the bonuses of 2.7 million for the management of Novobanco that had been awarded, but were “suspended” due to limitations on remuneration foreseen during the period in which the bank that was born from the ashes of BES was undergoing restructuring.
As stated in the Annual Report, “following the end of the restructuring period decreed by the European Commission in the context of state aid resulting from the Novobanco sale process, the limitations on remuneration for members of the management and supervisory bodies are no longer applicable ”, explains the institution in the 2023 report and accounts.
The state aid measures taken by Portugal in the context of the sale of Novobanco were considered compatible with the internal market under the terms of the Treaty on the Functioning of the European Union and, as a result, some commitments were assumed by the Portuguese State before the European Commission.
In this sense, and until the end of the Restructuring Period, limitations were applied regarding the remuneration of Employees and members of Novobanco’s Management and Supervisory Bodies. Among them, do not pay any employee, administrator or manager a total annual remuneration (salary, pension contribution, bonus) greater than 10 times the average salary of the bank’s employees until June 30, 2020.
Then in the period between 30 June 2020 and the end of the Restructuring Period, annual remuneration payments above these limits could be made if the bank did not breach any of the targets specified in the viability commitments.
Novobanco could, in any case, pay deferred bonuses to its employees, for their performance during the Restructuring Period, which payment can only be made after the end of the Restructuring Period.
“Until the end of the Restructuring Period, the total remuneration and the respective conditions set out in this Policy may be affected if the commitments are not achieved, in whole or in part”, the bank also predicts.
“In addition, this Remuneration Policy was prepared considering the existence of serious and objective reasons that justify, in the current circumstances, the payment of variable remuneration to the Members of the Executive Board of Directors under the rules set out in this Policy. If, at any time, these reasons cease to exist, this Policy will be revised accordingly”, reads the document.
According to the bank’s report and accounts, the current executive board of directors received bonuses of 2.36 million euros last year relating to the variable remunerations that were awarded in 2020, 2021, 2022 and 2023. CEO Mark Bourke (who arrived in August 2022) received a bonus of 565 thousand euros in 2023.
Bonus payments will have been higher, as the list revealed in the report and accounts does not include former directors to whom bonuses were also awarded, as is the case with former CEO António Ramalho.
The bonus controversy began in 2020 when the bank reported in the financial report sent to the Securities Market Commission (CMVM), that for the 2019 financial year, it had awarded 1.9 million euros in management bonuses. Payment was deferred until the end of the restructuring plan that was being monitored by European authorities. At the time it was said that the then CEO António Ramalho had received a fixed remuneration of 371.86 thousand euros, having been given a deferred bonus of 38.1 thousand euros.
In 2021, Novobanco again awarded prizes to the administration led by António Ramalho of 1.6 million euros. But the bonuses awarded to members of the bank’s Executive Board of Directors were retained to be paid after the end of the ongoing restructuring program. At the time, the bank was still making losses and awarded bonuses of almost 1.6 million euros to the management team.
In 2022, as in previous years, Novobanco again awarded a bonus of 1.93 million to directors, fully deferred. “For the year 2022, the variable remuneration was conditionally attributed, in the amount of 1,931 thousand euros, to the members of the executive board of directors (including members who were no longer in office at the end of the year) and subject to the verification of several conditions”, reads the 2022 report and accounts.
In 2023, Novobanco paid bonuses to directors for the first time. “Following the end of the restructuring period decreed by the European Commission in the context of state aid resulting from the Novobanco sale process, the limitations on remuneration for members of the management and supervisory bodies are no longer applicable”, explains the bank in the report and accounts for 2023.
This “resulted in additional payments in 2023 to the current members of the executive board of directors and General Supervisory Board of 382,948 euros relating to salaries that were deferred and 2,663,167 euros of variable remunerations from previous years whose deferral period had already elapsed” , the bank added.
