The board of directors of Telefónica has given the green light to a new internal policy that opens the door to offering attendance bonuses and dividends subject to the level of participation in its general shareholder meetings, according to the 'teleco' chaired by Marc Murtra to the National Securities Market Commission (CNMV).
With this measure, the company aims to encourage greater involvement of owners in corporate governance and ensure a broader presence of capital at the general meeting, following practices already implemented by other publicly traded companies.
The purpose is to promote that partners intervene in a more active and better-informed way in the decisions submitted to their vote and, at the same time, strengthen the bond between the shareholder and the company.
The approval of this framework aligns with the recommendation of the Good Governance Code of Listed Companies of the CNMV, which urges to establish a clear and stable policy in advance when a company intends to pay attendance bonuses.
The approved text does not yet establish specific amounts nor does it imply by itself the birth of an automatic right to payment for shareholders.
It will be the board itself that determines, in each meeting call, whether or not to introduce any incentive, as well as the chosen formula, its amount, and the applicable requirements.
Attendance bonuses and other incentives
The policy contemplates two main mechanisms: an attendance bonus, materialized in a cash payment per share, and a dividend whose payment would depend on the meeting achieving a certain percentage of capital present or represented. It also opens the door to other economic incentives of a similar nature.
In the case of the attendance bonus, shareholders who attend physically or via telematics, those who validly delegate their representation, or those who cast their vote remotely prior to the meeting, will be eligible, always in accordance with the conditions set in the call.
To have the right to the possible incentive, the shares must be registered in the name of the shareholder at least five days prior to the date of the meeting.
In addition, holders who do not reach the minimum number of shares required to attend in person may also receive the bonus through delegation, grouping with other shareholders, or remote voting, under the terms that are established.
Dividend conditioned on participation
On the other hand, the conditioned dividend will have to be submitted to the approval of the general meeting itself.
If the previously announced participation threshold is reached, all shareholders entitled to participate in the meeting may collect it, regardless of whether they ultimately took part in it or not.
The policy establishes that these incentives cannot be linked to the sense of the vote or to the delegation in favor of the board or a specific person.
Likewise, it is expressly prohibited to use them as a tool to influence a specific vote or to hinder a public takeover bid, as well as other initiatives promoted by shareholders or by third parties.
In each call, it will be detailed whether or not there are incentives, the gross amount per share, and the conditions that govern them.
The amounts must be prudent and proportionate, without replacing the ordinary dividend or jeopardizing the financial solidity of Telefónica.
The board, with the support of the Appointments, Remuneration and Good Governance Committee, will analyze the cost of these measures and their impact on participation levels, paying special attention to the response of minority shareholders.
The policy also contemplates justified cases for not offering or for temporarily suspending the incentives and requires explaining the reasons for their reintroduction or any modification regarding the immediately preceding meeting.