Reines gives up mega bonus to pave the way for Naturgy takeover

Naturgy informed the National Securities Market Commission (CNMV) that executive president Francisco Reines refused an additional bonus that he planned as part of his long-term remuneration. This will pave the way for what is possibleThe takeover of Naturgy by the Arab group Taqa in alliance with Criteria (La Caixa), avoiding any misunderstanding regarding this bonus that could be obtained in the event of a change of control.

Naturgy informed the National Securities Market Commission (CNMV) that executive president Francisco Reines refused an additional bonus that he planned as part of his long-term remuneration. This will pave the way for what is possibleThe takeover of Naturgy by the Arab group Taqa in alliance with Criteria (La Caixa), avoiding misunderstandings regarding this bonus, which could be received in the event of a change of control or which increases as the share price rises, as is happening now.

As Naturgy explains to the regulator, the decision was made “with the aim” that Reines could “continue to act with absolute independence and neutrality in the face of any potential proposal and thus continue to protect the interests of the company and all shareholders, avoiding any possible conflict of interest associated with result of any potential proposal.” For this reason, the Nomination and Remuneration Committee has been asked to “revert the remuneration scheme to the original model provided for in its agreement dated February 2018 and in the remuneration policy approved by the general meeting of shareholders in June 2018.”

The Board of Directors unanimously, on the proposal of the Nomination and Remuneration Committee, agreed to this change in accordance with the current remuneration policy approved by the general meeting in March 2022.

This means that the CEO “ceases to participate in the economic benefits of any potential liquidation of the ILP due to any potential current or future offering or for any other reason.”

At that time, Naturgy approved incentives for approximately thirty managers to complete the work in 2025. This megabonus, at prices at that time, could exceed 100 million euros. This ILP (called the Long-Term Incentive) is a stellar incentive plan for Naturgy’s top executives. It was launched after Reines became president of Naturgy in 2018.

This was a real novelty because it was a modern and simplified version of the stock options that had such a bad reputation.

The plan was that Naturgy bought a series of shares and, taking into account their revaluation over a certain period, plus any dividends that might have accumulated during that time, the additional amount was transferred to the managers who were part of the plan. Of course, subject to compliance with the minimum requirements for revaluation of securities.