This Friday will be the first in almost two decades when Pablo Isla will not be forced to go to Arteixo, Inditex’s headquarters. He joined Zara’s owner in 2005 as CEO and is leaving the post of CEO, a position he has held since 2011. It will not be a farewell without an award.
Isla leaves Inditex for € 23 million. He does not hire them for the work he has done over the years – for which he has already received more than $ 100 million, among various concepts, including a retirement plan, but as compensation and because he will not be able to work. Competition until mid-2024. But can and will continue to work, even if it is in another sector. “I’m not going to back down, but I can not say anything more,” he assured the media a few weeks ago at his last press conference as president.
That $ 23 million also means reviving the practice common among the large companies listed, paying large sums to their senior managers in the event of voluntary dismissal or departure. Rates that are higher when they retire and save on retirement plans that companies create for them.
It is true that the departure of big managers from Ibex, as it happened in the case of pay and retirement, was reduced during the pandemic years, however it was. This was the case with Indra and Fernando Abril-Martorelli. In May 2021, he was fired as CEO of a technology and defense firm. He took about six million. Of these, 3.1 were for compensation, 2.3 for “non-competition”, except for the payment of 750,000 euros.
During these years there were other departures that did not disintegrate, such as Rami Abukhairi. Considered the right-hand man of Anna Botini, she was the CEO of Banco Santander in Spain and responsible for the group card business. He left the company at the end of 2021 and his compensation will be around € 37 million, which the entity paid last year as a termination benefit to a total of 38 managers.
There are also sums paid to managers whose contractual relationship was, to put it mildly, temporary and went to court. This is the case of Andrea Orsell, also in Santander. The Italian banker filed a lawsuit against him in 2018 for his failed signature. Earlier this year, the 46th Court of First Instance in Madrid ruled that the subject had to pay 51.4 million (16 million less than originally planned) in the sense that the job offer was valid. More than 18 million of these are in bank shares.
Santander is not alone in banking when it comes to managers taking balance sheets. Largely because the consolidation process that the financial sector is experiencing has shaken management and led to dismissals.
His integration into Bankia with Caixabank led to the departure of Jose Sevilla, who served as CEO. As a surviving and state-owned entity, his farewell pay was significantly lower: two salary annuities. A total of one million euros. Seville has not retired, this week the shareholders’ meeting of the investment bank Renta 4 approved the appointment of its director. Jordi Guall, who was the non-executive president of Caixabank before integration and who remains in the active group as president of the insurer VidaCaixa, also did not retire.
Jaime Guardiola, who has resigned from banking on a daily basis, is still chairing the Cobcle d’Economy’s lobby in the Catalan business community. The former CEO of Sabadell saved his savings system last year. In total, the retirement is linked to almost 23 million euros.
Guardiola’s 23 million retirement and much more that Pablo Isla will receive due to Inditex’s departure and lack of competition is far from what has been achieved in banking. In 2002, Banco Santander paid a record-breaking 108 million euros in Spain to date, received by Angel Corcostegi between his retirement plan and compensation. Behind him, his successor, Alfredo Saenz, who resigned ten years later and received $ 88 million. Also, Francisco Gonzalez, with more than € 100 million leaving the BBVA presidency in 2018.
After the financial crisis that began in 2008, the payment of millionaires for leaving the company voluntarily without retiring has slowed down and accelerated again in the years leading up to the pandemic.
In 2019 he left Endesa Borja Prado. He received more than 14 million euros to say goodbye to the president alone. 9.6 million of them were compensated and 3.2 million for non-competition in other power companies. Prado is currently the President of Mediaset Audiovisual Group.
That same year, Inigo Meiras, today CEO of Logista, resigned from the same position at Ferrovial. He received $ 11.3 million in compensation for his resignation. And an even higher retirement, said Repsol’s secretary of the board of directors, who raised more than $ 19 million for his retirement the year before COVID-19.
Now, in the wake of the economic storm in Ukraine and the uncertainty of what will happen in the future, the largest Spanish company is changing direction.
Isla’s farewell comes with a change of presidency that remains in the hands of Martha Ortega. In this case, the multinational salary has already been revealed. He will be fined a million euros and will have no other additional remuneration and incentives. Specifically, € 900,000 for his position on the non-executive President and 100,000 on the Board of Directors. On paper, who will lead the company will be the CEO, Oscar Garcia Maceiras. It will generate, as Inditex told CNMV, $ 2.5 million a year, an additional bonus of $ 3.75 million and a retirement plan.
For the time being, his pay is far from what Islam has received in recent years. Coincidentally or not, on the day of the farewell he saw how Inditex ceased to be the Spanish company with the highest value in the stock market. He was beaten by Iberdrola this Thursday. The value of the electric company is 63,861 million euros, while the owner of Zara was 61,647. Only after Russia invaded Ukraine on February 24, forcing it to close stores in both countries, did Inditex lose more than 19% of its value on the floor, it is the lowest price since 2014.
Source: El Diario
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