Business Context and Reporting Period
This Form 6-K filing, dated February 14, 2025, discloses the Annual Report on the Remuneration of BBVA Directors for the 2024 financial year. The report details the remuneration policy implementation for Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) and provides a breakdown of compensation accrued by executive and non-executive directors. The policy governing 2024 was approved by the General Shareholders' Meeting on March 17, 2023, and remains in effect for 2025.
Key Financial Metrics and Remuneration Data
Group Performance Metrics (2024):
- Net Attributable Profit: €10,054 million (up 25.4% from €8,019 million in 2023).
- Return on Regulatory Capital (RORC): 21% (up from 18.1% in 2023).
- Efficiency Ratio: 40.0% (improved from 41.7% in 2023).
- Sustainable Business Channeled: €92,737 million.
Executive Director Remuneration (2024 Accrued):
| Director | Fixed Remuneration (€k) | Short-Term Incentive (STI) (€k) | Long-Term Incentive (LTI) Target (€k) | Total Accrued (€k) |
|---|---|---|---|---|
| Carlos Torres Vila (Chair) | 3,560 | 2,871 | 1,286 (Target) / 1,929 (Max) | 7,938 (Vested/Estimated) |
| Onur Genç (CEO) | 3,560 | 2,147 | 962 (Target) / 1,443 (Max) | 7,327 (Vested/Estimated) |
Note: Total accrued includes fixed remuneration, STI, and the upfront portion of variable remuneration plus deferred amounts from prior years payable in 2025. The final LTI amount is contingent on 2027 performance.
Non-Executive Director Remuneration (2024):
- Total Fixed Allowance: €4,250 thousand (down 2.3% from 2023 due to board composition changes).
- Remuneration in Kind: €112 thousand (healthcare and accident insurance).
- Deferred Shares: 95,877 theoretical shares allocated in 2024, to be delivered upon cessation of office.
Material Changes vs. Prior Period
- Profitability Surge: Net attributable profit increased by 25.4% year-over-year, driven by recurrent banking income, lending activity, and fee growth.
- STI Achievement: Executive directors achieved 126% of their Target Short-Term Incentive, exceeding the 100% target due to strong performance in profit, RORC, efficiency, and sustainable business metrics.
- Board Composition: Changes in the board (appointments and departures in March 2024) resulted in a slight decrease in total non-executive director fixed remuneration compared to 2023.
- Deferred Payments: Significant deferred variable remuneration from 2019, 2021, 2022, and 2023 is scheduled for payment in 2025, subject to CPI adjustments and performance thresholds.
Guidance, Outlook, and Risks
2025 Remuneration Policy: The policy for 2025 remains unchanged from the 2023-approved framework. Fixed remuneration for the Chair and CEO remains at €2,924k and €2,179k, respectively. The target variable remuneration mix remains 45% fixed / 55% variable.
Performance Indicators for 2025:
- STI Indicators: RORC (35%), Net Attributable Profit (15%), Enterprises Fee Income (10%), NPS (15%), Target Customers (15%), and Sustainable Business (10%).
- LTI Indicators (2028 targets): Tangible Book Value per share (40%), Relative TSR (40%), Decarbonization (15%), and Women in Management (5%).
Risks and Contingencies:
- Deferral and Vesting: At least 60% of variable remuneration is deferred over five years. The LTI is subject to a measurement period ending in 2027 (for 2024 accrual) or 2028 (for 2025 accrual).
- Malus and Clawback: 100% of variable remuneration is subject to reduction or recovery if financial performance deteriorates, reputational damage occurs, or accounting restatements are required.
- Capital and Liquidity Thresholds: Deferred payments are contingent on meeting CET1 and Liquidity Coverage Ratio (LCR) thresholds. In 2024, these thresholds were met, resulting in no reductions for prior-year deferred payments.
Key Facts for Investor Verification
- Profit vs. Pay Alignment: Verify the correlation between the 25.4% profit increase and the 126% STI payout to executive directors.
- LTI Finalization: Note that the Long-Term Incentive for 2024 is not yet final; it depends on performance metrics measured at the end of 2027.
- Deferred Cash Flow: A significant portion of executive compensation (approx. 63% of 2024 AVR) is deferred, impacting future cash outflows in 2025-2029.
- Share-Based Compensation: Executive directors received stock options (165,332 for Chair; 123,652 for CEO) as part of the deferred variable remuneration, with a strike price of €9.67.
- Non-Executive Share Delivery: Verify the delivery of accumulated theoretical shares to directors who left office in March 2024 (José Maldonado Ramos and Juan Pi Llorens).