Performance evaluation and remuneration
The performance of the executive directors is evaluated based on fulfillment of certain economic, financial and operational objectives, as defined annually in the Remuneration Policy submitted by the Remuneration Committee and approved by the General Shareholders Meeting.
Board executive member’s remuneration as set in the Remuneration policy of members of the Company's corporate bodies approved at the Annual General Meeting of 29 April 2022 by a majority of 95,99% of the share capital and voting rights, involves three main components: fixed remuneration, annual variable remuneration and three-yearly variable remuneration.
The remuneration structure is as follows:
As of 2021, the CEO's remuneration also incorporates a specific incentive to create long-term value, aligned, in particular, with the Company's economic and environmental sustainability concerns and with the achievement of the respective strategic objectives, in the form of the right to a set of Galp shares, or equivalent value, attributable to three-year periods. The number of shares will be based on an amount equivalent to 60% of the CEO's gross fixed annual remuneration, which is adjusted by the performance factor at the end of the 3-year period, according to the following categories: (i) Total Shareholder Return ( TSR), (ii) Peer ranking in terms of TSR and growth of Cash Flow From Operations and (iii) Reduction of CO2 intensity. If the absolute TSR is negative at the end of the period, the incentive will not be applied.
The remuneration of Galp’s directors includes all remunerations due for posts held on corporate bodies in other Group companies.
The Remuneration Policy for 2020 establishes that, in case of a judicial decision for unlawful action against one or more members of the Executive Committee that results or has resulted in a restatement or an impairment of the financial statements in terms detrimental to the Company, the Remuneration Committee may request the Board of Directors to adopt the adequate measures for the clawback of an amount of the variable remuneration paid to said member(s) that is deemed appropriate in relation to the relevant period of said unlawful action.
The total and individual annual amount of remuneration received by the members of the Board of Directors during each financial year, as set by the Remuneration Committee, is provided in the Corporate Governance Report 2020.
The ratio Galp´s stock ownership held by the Chief Executive Officer/ his annual fixed salary is 0.1544.
The ratio average stock ownership by Executive Officers (other than the Chief Executive Officer)/average their annual fixed salary is 0.1561.