The “footprint of inequality” in some Spanish companies is long. Sometimes, it translates into stratospheric figures. This is reflected in a study by Oxfam Intermón, which analyzes the remuneration in 40 large Spanish companies, in which, on average, the salary of the first executive of these companies is “118 times the average salary” of their staff. The most extreme case is CIE Automotive, “where the salary of its executive director is 1,208 times the average salary of the company,” the study states.
The report Footprint on Inequalities examines a sample of 40 large Spanish corporations, among those with the “highest turnover,” explains Oxfam. Included are “29 of the 35 companies in the Ibex 35 index” and other companies “that are also listed on the stock market.” The analysis focuses on how these companies impact “social and economic inequality” in various dimensions, such as “power”, “profits” and the “planet”, among others.
Within the benefits chapter, the NGO details the salary differences of the chief executive and those who make up senior management with respect to the average salary in these companies.
“On many occasions these salaries reach exorbitant amounts of millions of euros, which means channeling a considerable part of the income generated by companies towards members of the most favored groups in our society, and the comparison of these remunerations with what the rest of working people gives us a clear measure of the remuneration inequality of companies,” the report states.
Salary of the top executive: up to 24 million euros
The average remuneration received by the top executive in the sample of 40 companies analyzed is “4.5 million euros.”
Oxfam indicates that the companies with the “most exorbitant” salaries are CIE Automotive, whose CEO earned almost 24 million euros in 2023, followed by Indra (15.5 million) and Iberdrola (13.8 million). At the opposite extreme are DIA, whose first executive received a salary of 150,000 euros, Aena, with 187,000 and Redeia, “which paid 833,000 euros to its top manager in 2023.”
The NGO compares the salaries of the top executive of the companies with the average salaries of each company to “obtain a first snapshot of salary inequality.” On average, the salary of the chief executive is 118 times the average salary. In 58% of the companies analyzed, this distance is greater than 50 times, in another quarter of the companies (25%) the ratio is between 20 and 50 times and in 18% of the companies in the sample “the distance between the highest and the average salary is less than 20 times.”
Lead the ranking of salary inequality CIE Automotive, “where the salary of its executive director is 1,208 times the average salary of the company.” It is followed by Indra, where this gap is 480 times, and Inditex, with a ratio of 311 times.
The companies in which the distance between the highest salary and the average salary is less large are “Aena, with a distance of 5 times, DIA, 9 times and Redeia, 12 times.”
How much does senior management earn?
The report also focuses on “the average remuneration of the members of the management committee.” On average, members of senior management of the 40 companies analyzed earn 1.15 million euros.
“Iberdrola is the company that pays the highest salaries to its senior managers, an average of 5.6 million euros, followed by Inditex with 5.3 million euros and Banco Santander with 3.6 million euros.”
On the opposite side, the “most moderate” companies that pay their management committee members are “Aena, with an average remuneration of 147,000 euros, Redeia, 275,000 and Ebro Foods, which pays its senior executives with an average of 287,000 euros.” , contemplates the study.
Again, Oxfam compares this data with average salaries in companies. On average, a member of the management committee of one of the companies analyzed earns 27 times the average salary.
Inditex is the company with the greatest distance between the average salary of a senior manager and the average salary, with 159 times, followed by Iberdrola, with 90 times and Banco Santander, with 74. At the other extreme are Redeia and Aena, with a distance four times between what its senior managers earn on average and the average salary, and Acciona Energía, where that distance is five times.
When dividend distribution eats into profits
Oxfam also points out several companies in the sample that dedicate a majority of their profits to the distribution of dividends, which they consider another source of inequality. Specifically, 18% of companies distributed “more than 70%” of their 2023 profits in dividends to their shareholders.
“The amounts that companies distribute as dividends pay mainly to the upper classes of society, so companies that pay enormous dividends that represent an excessive proportion of the total profits obtained are clearly tipping the balance towards those who have the most and giving signs “to understand the company as a mechanism for extracting income,” values the NGO.
Oxfam specifically highlights four companies “that allocate more than 100% of their profits to remunerate their shareholders, which implies using their own funds to pay dividends and, therefore, decapitalizing the company.” “Endesa, Fluidra and Sacyr Vallehermoso resort to these practices of dedicating all the profits obtained plus a part of the reserves to dividends, while Telefónica chooses to generously remunerate its shareholders despite having entered into losses (574 million euros of profit). negative in 2023, and 1,725 million euros allocated to dividends)”, the study states.
The NGO includes several recommendations to companies and the Government to “initiate a reform towards more inclusive corporate governance that prioritizes sustainability, equity and the active participation of workers in decision-making, the distribution of benefits and management bodies.”
Specifically, Oxfam is committed to a business reform that affects article 129 of the Constitution, which defends as a principle the participation of workers in companies, a measure that Sumar defends and that was agreed with the PSOE in the Government agreement. . The organization recommends “changes in the Capital Companies Law that facilitate and promote the representation of workers on the Boards of Directors and in the appointments and remuneration commission, as well as the participation of workers in the benefits of the company.” company, through different distribution schemes.”
To put an end to these large figures of salary inequality within companies, Oxfam recommends “establishing a maximum difference between the highest salary and the median salary in large companies of 1 to 20.”
It also proposes “prohibiting the distribution of dividends and share repurchases (share buybacks) in companies that during the year have presented employment regulation files”, among other measures.
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