5. Main relationships of the Nomination and Remuneration Committee

A. With the Board of Directors

At the beginning of each session of the Board of Directors, the Chairman of the Nomination and Remuneration Committee reports on the main business transacted in the last meeting of the Committee.

B. With the Audit and Control Committee

Directors sitting on the Nomination and Remuneration Committee also sit on the Audit and Control Committee.

C. With the Chairman and Chief Executive Officer and the Senior Management

For the purposes of permitting the Nomination and Remuneration Committee to be directly apprised of the major business concerns, the Committee encourages the appearance in its sessions of the Chairman and Chief Executive Officer and of the senior managers and officers of the Company to explain their view on certain issues directly linked with the field of responsibility of the Committee and which are recurrent.

D. With the Lead Independent Director

Mr Carlos Espinosa de los Monteros Bernaldo de Quirós is the Chairman of the Nomination and Remuneration Committee as well as Lead Independent Director.

E. With the Human Resources Department

In order to keep the Nomination and Remuneration Committee duly informed, the Human Resources Division regularly informs the Committee on the changes, if any, in the global remuneration systems, the market researches on the pay of Senior Management, the annual pay adjustments and the review of the adjustment guidelines for each country, a summary of the annual adjustments carried out and the global programs for the detection and development of potential in the matter of personnel, and succession plans.

F. With external advisors

In order to be aided in the performance of their duties, the non-executive directors may request that legal, accounting, financial or other experts be engaged at the company’s expense. The commissioned task must of necessity deal with particular problems of a certain importance and complexity which may arise in the performance of the office.

During fiscal year 2013, the Committee has relied on external advice to deal with the following issues:

  • The remuneration policy in respect of the Chairman and Executive Director.
  • The design of the Long Term Performance Plan.
  • The drafting of the Annual Report on Remuneration of Directors for financial year 2012.