Santander bosses see pay packets cut in wake of profit fall

Santander reduced directors’ pay by almost 35 per cent last year, the Spanish bank said yesterday as executives at scandal-hit European rivals brace themselves for the possibility of even bigger bonus cuts.

Emilio Botin, Santander’s chairman for the past 26 years, took one of the biggest cuts among top directors, with his remuneration falling 32 per cent from 2011 to a little more than €3 million (£2.6m), the bank’s annual report revealed.

Botin’s bonus was halved while his salary was frozen, though big banking bonuses are not as much of a hot issue in Spain as they have been in other parts of Europe.

Public scrutiny over payouts remains particularly intense in Britain, five years after major lenders had to be bailed out, and the EU is in the midst of talks aimed at enforcing a cap on bankers’ bonuses. Bonuses in Spain tend not to reach the heights of global players with larger investment banking divisions, which fuelled pay packages in the tens of millions of euros for top traders and executives in the past decade.

But the country’s banks have gone through their own recent crisis because of a property market crash, culminating in the state’s rescue of several lenders last year.

Another Santander executive to take a big pay cut was chief executive Alfredo Saenz, in the spotlight this month after a Spanish court partially annulled an official pardon granted to him in 2011.

Saenz’s earnings at Spain’s biggest bank were down nearly a third to €8.24m last year.

Meanwhile, Botin’s daughter Ana, who runs Santander’s UK arm, took a less harsh bonus cut than others, with her variable pay element falling by about 21 per cent to €2.25m.

Santander recently posted a 59 per cent fall in 2012 net profit.