Santander chairman Ana Botín has taken a 50 per cent pay cut this year to back a €25m medical equipment fund the Spanish bank is creating to help counter the coronavirus pandemic.
The eurozone’s largest lender is also postponing its interim dividend, usually paid in November, and plans to consolidate it with the full-year dividend in May as it attempts to conserve cash ahead of a likely recession caused by the social lockdown across Europe, according to a statement on Monday evening.
The Santander board will review the overall 2020 dividend once the “full impact” from coronavirus and the associated collapse in global markets is clearer. Additionally, the bank is reviewing its bonus policy “so that the maximum required resources are directed to supporting customers” and businesses in need, without providing further details.
Santander’s chief executive, José Antonio Alvarez, will also contribute half his final salary and bonus for this year to the fund, which will purchase medical equipment and protective clothing among other items. Ms Botín was paid a total of €10m last year and has a pension worth about €48m.
Non-executive directors on Santander’s board will contribute 20 per cent of their earnings, and other senior managers have also agree to donate, while regular staff are being invited to make voluntary contributions.
Coronavirus business update
How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.
Ms Botín is the first European financial executive to take a reduction in pay, although it has become common for executives in hard-hit sectors such as aviation and hospitality that are dramatically scaling back operations.
Spain is the worst-affected country in Europe after Italy, with 2,172 deaths and 33,000 infected by coronavirus so far. More than 2,000 people are in intensive care, and emergency hospitals have been set up in conference centres with most cities under strict quarantine rules.
Last week, Ms Botín said it was possible that Santander would see only a 5 per cent drop in earnings for 2020 if the impact of the virus followed a “V-shaped” scenario of a sharp shock followed by a rapid recovery. However, she emphasised that this was only one of a number of possibilities and the situation has worsened since then.
Regardless, Santander said it expected no impact on its capital level or midterm financial targets and was “well-positioned to withstand even a severe stress scenario”.
Get alerts on Coronavirus pandemic when a new story is published