Naturgy is governed in accordance with the principles of efficiency and transparency in line with the main recommendations and standards in this area, and it adopts advanced corporate governance practices for this purpose.
The corporate governance terms ofreference comprise basically:
On 6 February 2018, following the resignation of Mr Rafael Villaseca Marco as Chief Executive Officer of the company, the Board of Directors of Naturgy appointed Mr Francisco Reynés Massanet as Executive Chairman. Additionally, Mr Isidro Fainé Casas resigned as a director and was appointed Honorary Chairman of Naturgy.
On 22 February 2018, Repsol, S.A. reached an agreement to sell its 20.072% stake in the capital of Naturgy Energy Group, S.A. to Rioja Bidco Shareholdings, S.L.U., a company controlled by funds advised by CVC. The transaction was completed on 18 May 2018, with the result that Repsol, S.A. ceased to be a shareholder of the company.
Following that transaction, the main shareholders of Naturgy as of 31 December 2018 are as follows:
|Fundación Bancaria Caixa d'Estalvis i Pensions de Barcelona, "la Caixa"1||25.6||24.4|
|Global Infrastructure Partners III2||20.0||20.0|
|Rioja Bidco Shareholdings, S.L.U.3||20.1||-|
Following the changes in ownership structure, on 27 June 2018 the Shareholders' Meeting approved the reduction in the number of members of the Board of Directors to twelve. Additionally, the Executive Committee was eliminated and the number of members of the Audit Committee and of the Appointments and Remuneration Committee was set at seven in both cases.
As a result of those changes, the following directors stepped down:
And the following new directors were appointed:
Any person who is a shareholder of record five days before the Shareholders' Meeting is entitled to attend the Meeting.
The Board of Directors of Naturgy operates via plenary meetings and committees, in accordance with the requirements of the Capital Companies Act. Accordingly, the Board of Directors of Naturgy has an Audit Committee and an Appointments and Remuneration Committee, whose functions are as set out in the Act.
Until 27 June 2018, the Board had an Executive Committee, which was responsible for deciding on the issues most closely related to operations over which the Board has competence. In the framework of the Action Plan implemented by the Board of Directors as a result of the self-assessment performed in 2017, the size of the Board of Directors and the existence of the Executive Committee were reconsidered in 2018. After the reduction of the number of members of the Board of Directors to 12, it was no longer considered necessary to maintain that Committee since the aforementioned number guarantees agility in the decision-making process.
In 2018, the Board of Directors undertook an in-depth debate on strategy which crystallised in the approval of the Strategic Plan 2018-2022.
The other main issues that were considered are as follows:
Composition of the Board of Directors and its committees (at 31 December 2018)
Type of Director
|Board of |
|Appointments and Remuneration |
Following the appointment of Mr. Francisco Reynés Massanet as Executive Chairman on 6 February, the group's organisation structure was redesigned, including the elimination of the Executive Committee.
A new and simplified organisational structure was defined comprising four business units (Gas & Power, Infrastructure EMEA, Infrastructure LatAm South and Infrastructure LatAm North) and a leaner corporate structure was adopted, the goal being for the businesses to operate autonomously with full responsibility for their bottom line, leaving corporate functions to focus on value-added processes and on ensuring centralised control.
Senior Management is defined as meaning the executives who report directly to the Executive Chairman, Mr Francisco Reynés Massanet.
As of 31 December 2018, it comprised the following executives:
The Annual Report on Director Remuneration was presented as a separate item for a consultative vote at the Shareholders' Meeting in 2018.
Directors' remuneration for their membership of the Board and its committees consists solely of fixed amounts determined on the basis of the positions they hold.
The remuneration system was amended in 2018:
These decisions were adopted by the Board of Directors following recommendations in this connection by the Appointments and Remuneration Committee; external legal advice was obtained for the implementation of the new long-term incentive plan and its submission to the Shareholders' Meeting.
The remuneration is supplemented by pension plans and a group health insurance policy.
|From 27 June 2018||Up to 27 June 2018|
|Chairman of the Board of Directors||1,100,000||550,000|
|Chairman of the Executive Committee||Not applicable||550,000|
|Member of the Executive Committee||-||126,500|
|Member of the Appointments and Remuneration Committee||-||25,000|
|Member of the Audit Committee||-||40,000|
|Fixed remuneration annual basis||Remunerate the level of responsibility attached to these functions.||Ensure that the remuneration is competitive vis-àvis comparable companies.|
|Annual variable remuneration||Link remuneration with the company's performance in the short term.||
Based on 100% of the total fixed annual remuneration, multiplied by the degree to which the goals were actually achieved in the year. Achievement is capped at 150%. No remuneration is payable if goal achievement is less than 80%.
The goals and weightings are expected to be established by the Board of Directors at a meeting on 5 March 2019.
|Long-term incentive plan||Strengthen the commitment to achieving the goals set out in the strategic plans.||Related to the return obtained by shareholders in the period of reference, which coincides substantially with that of the Strategic Plan 2018-2022.|
|Other items||Safeguard the company's benefits.||
Health, life insurance and disability.
Energy rebate, company vehicle.
|For sitting on the Board||2,871|
|For sitting on the Board committees||1,541|
|Short-term variable remuneration||1,918|
|Pluri-annual variable remuneration||898|
|Short-term variable remuneration||3,660|
|Pluri-annual variable remuneration||595|
The general remuneration policy for Senior Management is determined by the Board of Directors on the basis of a proposal by the Appointments and Remuneration Committee.
The remuneration model contains the same components as above for the Executive Chairman's executive functions.1. In accordance with CNMV Circular 5/2013, for the purposes of remuneration, senior management includes executives who report directly to the company's chief executive and also the head of internal audit.
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