Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bank Bradesco) reports on proposals submitted to shareholders for the Annual and Special Shareholders' Meeting held on March 10, 2010. The filing details the allocation of net income for the fiscal year ended December 31, 2009, and establishes compensation limits for management and the Fiscal Council for the year 2010.
Key Financial Metrics
Net Income and Allocation (Year Ended Dec 31, 2009)
- Net Income: R$8,012,282,297.68
- Legal Reserve Allocation: R$400,614,114.89 (5% of adjusted net income)
- Statutory Reserve Allocation: R$4,893,587,024.06
- Total Interest on Own Capital and Dividends: R$2,718,081,158.73
- Already paid: R$1,009,086,158.73
- To be paid on March 9, 2010: R$1,708,995,000.00
Management Compensation
- 2009 Actual Paid: R$111,299,000.00 (Fees and bonuses) plus R$99,660,466.00 for pension plans.
- 2010 Proposed Limit: Up to R$170,000,000.00 for fees and bonuses, and up to R$170,000,000.00 for pension plans.
- Fiscal Council Compensation: R$12,000.00 per month per sitting member (maintained from 2009).
Dividend Yield Metrics
Total interest on own capital (net) and dividends accrued for 2009 represented 31.51% of the adjusted calculation basis.
Material Changes vs. Prior Period
- Net Income Growth: Net income increased from R$7,521,019,000 in 2008 to R$8,012,282,000 in 2009.
- Dividend Payout Ratio: The percentage of net income distributed as interest on own capital and dividends decreased slightly from 33.12% in 2008 to 31.51% in 2009.
- Management Compensation: The 2009 actual compensation (R$111.3 million) was significantly lower than the approved limit (R$170 million), a reduction attributed to the global economic instability. The 2010 proposal restores the limit to R$170 million.
- Stock Bonus: A 10% stock bonus was resolved in December 2009, increasing the number of shares and the total monthly dividend payout amount.
Guidance, Outlook, and Risks
Management Commentary and Outlook
The Compensation Committee noted that the Brazilian economy successfully navigated the global financial crisis and showed evidence of an upturn. Management expects the Brazilian economy in 2010 to be marked by strong expansion. Consequently, the Board proposes maintaining the compensation limits to retain talent in a competitive market, contingent upon the fulfillment of performance objectives.
Risks and Contingencies
- Forward-Looking Statements: The filing includes standard disclaimers that future results may differ materially from expectations due to economic conditions, industry trends, and operating factors.
- Performance Contingency: The proposed bonuses for 2010 are subject to the evaluation of corporate results and the fulfillment of budget objectives; there are no individual attributions guaranteed.
Investor Verification Checklist
- Verify the payment date of the remaining R$1.7 billion in interest on own capital and dividends (March 9, 2010).
- Confirm the impact of the 10% stock bonus on per-share dividend amounts for future periods.
- Monitor the 2010 management performance targets to determine if the proposed R$170 million bonus limit will be fully utilized.
- Review the "Adjusted Calculation Basis" for net income to understand the specific adjustments made for legal reserve calculations.
- Check subsequent filings for the actual 2010 compensation paid versus the proposed limit.