Antonio Ramalho and his colleagues in the executive management of Novo Banco secured, in 2021, the right to a prize of 1.6 million euros. They will only be able to get it after Brussels gives the green light for restructuring, and they can even be cut off. But what is certain is that within three years, the bank has already set aside $5.5 million to pay insurance premiums to its top management. This is when the bank, since 2017, needed €3.4 billion from the Resolution Fund and now wants another €200 million.
The numbers in Report and accounts of Novo Banco In 2021, the first year in which it recorded profits, in the range of 186 million euros, in which it again requested a capitalization of 209 million from the settlement fund – which it refused. Variable remuneration is not determined individually, but if it is proportional (which is not usually the case in banks), then about 267 thousand euros will be awarded to each of the six executives.
These are new awards in addition to those already awarded in previous years, although they can only be paid from this year onwards, and only after the European Commission has given the green light to comply with a restructuring scheme laid out in 2017, as compensation for assistance The agreed state at the time amounts to 3.89 billion euros – of which 3.4 billion euros has already been spent.
As the report and accounts state, the money is set aside by the bank so that it can pay, but the variable remuneration is “conditionally” credited, subject to a “conditions check”, and may go down. These values are evaluated by the Remuneration Committee of the names appointed by Lone Star. In 2020, the variable pay was 1.86 million.
Financing against installments
Be that as it may, the variable remuneration has been challenged by the Settlement Fund, which always withdraws the corresponding amounts from the bill that Novo Banco issues each year. In fact, at Novo Banco’s last general meeting, where Lone Star approved the annual accounts, the fund was highly critical of the new awards. The car that works with the Bank of Portugal considers that the premiums of this amount are not sufficient in view of the case of the bank that continues to demand money from the car that merges the general accounts. In the past three years, it was decided to allocate 5.5 million euros for these awards.
Indeed, in the week following this general meeting, in which the state, the shareholder with 1.56% of the capital, voted against the accounts of Novo Banco, Antonio Ramalho announced his departure, effective August.
Ramalho receives over the roof
In addition to the non-individual premiums, the Novo Banco report and calculations also show the fixed bonuses that rose in 2020. Ramalho secured a salary of 410 thousand euros, above 400 thousand euros in the previous year, but actually earned only 372 thousand euros – this is because there is part of the 38 thousand euros delayed. This has already happened in the previous year, because Novo Banco has a salary limit, which forces the portion that exceeds this limit to be deferred over time.
The same happened with Mark Burke, chief financial officer of Novo Banco, whose salary amounted to 385 thousand euros, so part of the 13 thousand euros was postponed over time.
Income allowance of 50 thousand for the financial manager
In the case of Mark Burke, who went to the bank at a signing bonus of 320 thousand euros in 2019, I left a note in the report that last year he received an even greater income support of 51 thousand euros.
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The statement said that the European Commission’s Directorate-General for Competition “confirmed that income support up to a reasonable amount would not be considered as a component of the ‘total annual wage’ under the wage limits imposed”.
In other words, in practice, adding 50 thousand euros to his salary, Burke, coming from Ireland, even got more than Ramalho.
The CEO outperforms the CEO
In total, Novo Banco’s executive management received salaries of about 2 million euros – the team received 2.6 million euros last year, but because of the salaries of the board members who were in their positions. until the end of the term. .
In the general and supervisory body, where the names appointed by the Lone Star who monitor and supervise the work of the management, there are salaries of 1.1 million euros (in 2020, out of 875 thousand euros).
Here, the fact that the Chairman (equivalent to “Chairman of the Board”), Byron Haynes, earns 425,000 euros, which means that his salary exceeds that of the CEO. However, taking into account the aforementioned limit, he received only 372 thousand euros, with 53 thousand euros being postponed in time.
In May last year, a new member joined the General and Supervisory Board – William Henry Newton – whose fixed wages amounted to 110 thousand euros per year. Between January and April, he actually worked at the bank, but only remained as a component of that body after the green light from the European Central Bank. Until then, in the first four months, he had a service contract for which he paid 55 thousand euros.
It should be noted that after August, Ramalho will continue to be associated with the bank, and also with a contract to provide advisory services to the General and Supervisory Board.
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