- Santander Chairman Ana Botín and CEO José Antonio Alvarez have each taken a 50% cut to their salary and bonus this year and are contributing the forgone pay to a €25 million fund the Spanish bank is creating to buy medical equipment to help fight the coronavirus outbreak, the company announced in a press release Monday. Botín was paid €10 million last year and has a pension worth about €48 million, according to the Financial Times.
- Non-executive directors will have their compensation reduced by 20%, Santander said, adding it is reviewing that group’s bonus policy "so that the maximum required resources are directed to supporting customers" and businesses in need. Regular bank employees are also being invited to contribute voluntarily.
- Coronavirus deaths have spiked to more than 3,400 in Spain as of Wednesday morning, according to a Johns Hopkins University tracker. The country, which has the second-highest death toll from the virus behind Italy, planned to extend its national state of emergency through April 11. Spaniards are barred from leaving their homes during the lockdown except to buy food or medicine, to go to work, or for emergencies.
Several U.S. banks have committed eight- and nine-figure sums toward coronavirus relief, but none of the contributions is so transparently tied to executive pay.
Among U.S. banks, Wells Fargo’s donation package is the most generous, at $175 million. The San Francisco-based lender’s contributions will focus on housing stability, small business and financial health, the bank announced Friday. Additionally:
- Bank of America last week pledged $100 million toward medical response capacity, food insecurity and increased access to education.
- JPMorgan committed $50 million to funds and community groups providing food, support and medical supplies for people affected by the coronavirus.
- U.S. Bank announced a $30 million donation Monday to coronavirus relief efforts, including $4 million to benefit small-business recovery.
- Truist last week announced it is donating $25 million to cover basic needs, medical supplies and financial hardship related to the coronavirus outbreak.
In addition to instituting pay cuts for the bank’s top management and other figures, Santander is postponing its interim dividend, usually paid in November, opting to consolidate it with the full-year dividend from 2020 earnings, to be determined next year, "once the full impact of the pandemic is known," the bank said.
Botín said last week Santander’s earnings for 2020 may drop by as little as 5% if the impact of the virus is limited to a sharp shock and a rapid recovery, according to the Financial Times. But that scenario is one of many, she emphasized.
"For many of us, the coronavirus pandemic is the single most significant challenge we have ever faced," Botín said in Monday's press release. "The scale of the task before us demands a huge collective effort, with governments, central banks and other authorities, the private sector, charities and individuals, working together to limit the spread and provide care for those affected — whether directly or indirectly. We are committed to ensuring that Santander plays its part."
Botín is the first European financial executive to take a pay cut amid the crisis, the Financial Times reported. Pay for most U.S. big bank chiefs has remained flat from last year — notably at Citi and Bank of America. JPMorgan gave a 1.6% raise to CEO Jamie Dimon in 2019. Morgan Stanley CEO James Gorman took a 7% pay cut. And Goldman Sachs gave its top executive, David Solomon a nearly 20% raise, Banking Dive reported Monday.