Spain's Finance Minister Luis de Guindos has informed at the Council of Ministries that there will be limits for top management pay at entities that receive public funds. This element of the financial reform was not mentioned in yesterday's announcement.

Entities that had to turn to the Fund for Orderly Bank Restructuring (FROB), the state's bailout package, will have to limit non-executive board member salaries to €100,000 regardless of the number of boards they sit on. Presidents will see their salaries drop by an average of 67% while managing and general directors will see their salaries drop 65%.

Maximum compensation will be €600,000 per year with variable compensation options suspended. The salary limit plan is expected to be reviewed in three years.

The four banks that were nationalised by the FROB programme will have to limit their non-executive board member salaries to a maximum of €50,000 per year with no variable compensation such as stock options nor discretional pension benefits. Top management will have their fixed compensation limited to €300,000.

M.G.

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