António Ramalho and Novo Banco directors receive additional prizes of EUR 1.6 million (against the will of the Resolution Fund)

In 2021, António Ramalho and colleagues for the effective management of Novo Banco secured the right to receive a prize of EUR 1.6 million. They can only get the green light on structural change after Brussels, and it can even be cut. But to be sure, in three years, the bank has already set aside 5.5 million to pay top management premiums. At that time, the bank needed EUR 3.4 billion from the resolution fund from 2017, and now it wants another EUR 200 million.

The figures are included in Novo Banco’s report and financial statements for 2021, the first year in which it recorded a profit of around € 186 million, but in which it again asked the resolution fund for a capitalization of € 209 million – which it refused. The variable fee is not identified separately, but if it were proportionate (which is not usually the case in banking), it would give each of the six CEOs approximately EUR 267 thousand.

These are new prizes that will be added to those already awarded in previous years, although they can only be paid from this year and after the European Commission has given the green light to comply with the restructuring plan. in 2017 as compensation for the state aid then agreed up to EUR 3.89 billion – of which EUR 3.4 billion has already been used.

As recalled in the report and financial statements, the bank sets aside money in order to pay, but the variable fee is imposed “conditionally”, subject to a “revision of the terms”, and may decrease. These values ​​are evaluated by an award committee of names nominated by Lone Star. In 2020, the variable fee was EUR 1.86 million.

Fund against insurance premiums

Be that as it may, the resolution fund has disputed the variable fee, which has always raised the corresponding amounts from Novo Banco’s annual bill. In fact, at Novo Banco’s last general meeting, where Lone Star approved the financial statements, the fund was quite critical of the new awards. The vehicle, which cooperates with the Bank of Portugal, considers that the insurance premiums for this amount are not sufficient, given the situation of the bank, which is still asking for money from a vehicle linking public accounts. Over the last three years, it was decided to allocate EUR 5.5 million to these awards.

In fact, just the week after this general meeting, when the state, which owns 1.56% of the capital, voted against Novo Banco’s account, António Ramalho announced his resignation as of August.

Ramalho receives above the roof

In addition to unidentified premiums, Novo Banco’s report and accounting also show the fixed premiums that increased in 2020. Ramalho guaranteed a salary of 410 thousand euros, more than the previous year’s 400 thousand euros, but he actually received only 372 thousand euros – this is because the lot of 38 thousand euros has been postponed. It had already happened the previous year, because Novo Banco has a salary limit that forces the part crossing that limit to be postponed over time.

The same happened to Mark Bourke, CFO of Novo Banco, whose salary was 385 thousand euros, so part of the 13 thousand euros was also transferred over time.

Income compensation for the CFO 50 thousand

In the case of Mark Bourke, who went to the bank in 2019 with a signing fee of EUR 320 thousand, a note has been left in the report that he received even more income support of EUR 51 thousand last year.

Photo: Getty Images

Photo: Getty Images

The European Commission’s Directorate-General for Competition “confirmed that a reasonable amount of income support is not considered part of the” total annual remuneration “within the established salaries”, the opinion states.

In other words, Bourke, who is practically from Ireland, got his salary by adding 50 thousand euros even more than Ramalho.

The chairman beats the CEO

In total, Novo Banco’s executive management received a salary of approximately EUR 2 million – last year the team had received EUR 2.6 million, but because the salaries of the members of the Board of Directors were paid until the end of the term.

The Supervisory Board, which includes the names appointed by Lone Star to supervise and supervise the work of the management, has salaries of EUR 1.1 million (2020: EUR 875 thousand).

This is distinguished by the fact that the salary of the president (equivalent to “the chairman”), Byron Haynes, is 425 thousand euros, which means that his salary exceeded that of the CEO. However, taking into account the above limit, he received only those 372 thousand euros, of which 53 thousand euros were delayed.

In May last year, a new member joined the Supervisory Board – William Henry Newton – whose fixed remuneration was EUR 110 thousand per year. Between January and April, he was already working at the bank, but only became a member after the European Central Bank’s green light. Until then, he had a contract for the provision of services for the first four months, in which he put 55 thousand euros.

It is worth remembering that after August, Ramalho will remain tied to the bank, including an agreement on advisory services to the General and Supervisory Board.

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