The Government has put in place the machinery to remove José María Álvarez-Pallete as president of Telefónica. A replacement that is expected to take place in an extraordinary board of directors convened this Saturday. After the dismissal of the current chief executive is completed, he will be entitled to compensation of around 23.5 million euros, according to calculations by this newspaper.
According to the teleco’s corporate governance report, the executive president has included in his contract the amounts he could receive if he is dismissed. In this case, you would be entitled to “agreed financial compensation for termination of the relationship, when applicable, which can reach a maximum of four years. Each annuity includes the last fixed remuneration and the arithmetic mean of the sum of the last two annual variable remunerations received according to the contract.
In this case, you would have the right to claim compensation up to those four years, taking into account your last salaries. In 2023, the last year with data, Álvarez-Pallete earned 1.92 million euros in fixed salary, to which another 3.71 million in variables must be added. That gives a total amount of 5.64 million euros that he received as salary that year.
In 2022 he received 1.92 million euros of fixed remuneration and 4.19 million of variable salary, which gives a total of 6.12 million. More than in fiscal year 2023. The only thing that does not change, in this case, is the fixed salary since it is frozen at the request of Álvarez-Pallete himself, who wanted to show years ago a sign of restraint in remuneration.
The calculation of your compensation is as follows. To the fixed 1.92 million euros, 3.95 million of the arithmetic average of the variable part of the last two years would have to be added. That gives an amount of approximately 5.87 million euros. This amount, multiplied by four, results in the 23.5 million referred to.
Thus, the until now president of Telephone would be entitled to receive compensation of up to 23.5 million euros if the salaries of the two previous years for which data are available are taken into account. Although the expectation would be that the figures collected in 2024, not yet available, would be used, when the variable could vary and that would change the final amount a little.
To all this we must add one more extra: the pension plan. In the social security savings plan that Álvarez-Pallete has in Telefónica, he has funds of 11.36 million euros that would also correspond to him as consolidated rights in his favor.
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