Let there be transparency on board wages - but not yet

Despite a new law being in place requiring listed companies to put executive remuneration to a vote at annual shareholders' meetings, the National Securities Commission (CNMV) has decided to give firms a grace period in which to begin doing so to avoid "anomalies."

The need for greater transparency on what directors earn was included in the Sustainable Economy Law, which came into effect on March 6 of this year. A number of companies, however, had already held AGMs prior to that date and in the absence of a phase-in period, the CNMV is telling firms they can apply the new regulations on a voluntary basis before they become fully effective next year. The watchdog also pointed to the fact that specific regulations relating to the implementation of the law are still pending.

However, judicial experts say the law is already effective and has to be obeyed, pointing to the risk of companies being sued over a failure to comply.

The average compensation of Ibex 35-listed company independent directors last year was 199,000 euros.