Glass Lewis Comments on Spanish Corporate Code Revision
Glass Lewis has submitted a response to the Spanish consultation on the proposed changes to the Spanish Corporate Governance Code. The current proposal for the revision of the Code focuses on adapting the recommendations to the legislative changes made since 2015, and on strengthening some of the recommendations related to policies and controls to prevent corruption and other irregular practices. In addition, some amendments are made to clarify the language of recommendations.
Glass Lewis finds the proposed amendments to the Code largely positive. We find the new target of having at least 40% of the board occupied by the less represented gender reasonable (currently 30%), while we believe a more specific recommendation regarding the disclosure on promotion of women in executive pipeline would be beneficial.
Further, we find positive the recommendations to include the evaluation of integrity of non-financial information within the remit of the audit committee, and that the audit committee should include members with knowledge and experience in management of also non-financial risks.
Regarding the amendments related to executive remuneration, we note the change where the three-year vesting period for share-based incentive plans could potentially be waived in case of executive’s sufficient shareholding (2x fixed remuneration). In our experience, many companies operate shareholding requirements and equity awards with long-term vesting in parallel, and we find no reason that such long-term safeguards should be mutually exclusive. On the other hand, we welcome the inclusion of non-competition payment within the recommended maximum severance payouts.
You can download our submission to the consultation below. For more information, contact email@example.com.
© 2020 Glass, Lewis & Co., and/or its affiliates. All Rights Reserved.
This blog is for informational purposes only and is updated periodically to keep Glass Lewis' clients and other interested parties informed of current corporate governance developments and regulatory trends. The information contained herein should not be construed as legal or investment advice. Glass Lewis analyzes issues it believes may be of interest to its subscribers and makes recommendations as to how Glass Lewis believes institutional shareholders should approach such issues. While Glass Lewis may mention certain companies in its blog postings, Glass Lewis never comments on the investment merits of the securities issued by the subject companies. Therefore, none of the information posted through this blog should be construed as a recommendation to invest in, purchase, or sell any securities or other property. All recommendations stated herein must be construed solely as statements of opinion, and not as statements of fact, and may be revised based on additional information or any other reason at any time.
The information contained in each blog posting is based on publicly available information. While Glass Lewis exercises reasonable care to ensure that all information included in this blog is accurate and is obtained from sources believed to be reliable, no representations or warranties express or implied, are made as to the accuracy or completeness of any information included herein. In addition, Glass Lewis shall not be liable for any losses or damages arising from or in connection with the information contained herein or the use or inability to use any such information.
Glass Lewis expects readers of its blog possess sufficient experience and knowledge to make their own decisions entirely independent of any information contained in Glass Lewis’ blog postings. Subscribers are ultimately and solely responsible for making their own decisions. This blog is intended to serve as a complementary source of information and analysis for subscribers in making their own decisions and therefore should not be relied on by subscribers as the sole determinant in making decisions.