Executive compensation and employee benefits—Spain—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Executive compensation and employee benefits—Spain—Q&A guide
  • 1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.
  • 2. What are the primary government agencies or other entities responsible for enforcing these rules?
  • 3. Are any types of compensation or benefits generally subject to specific corporate governance requirements or approval by shareholders or government agencies? What is the general process for obtaining approval?
  • 4. Under what circumstances does the establishment or change of an executive compensation or benefit arrangement generally require consultation with a union, works council or similar body?
  • 5. Are any types of compensation or benefit arrangements prohibited either generally or with respect to senior management?
  • 6. What rules apply to compensation and benefits of non-executive directors?
  • 7. Must any aspects of an executive’s compensation be publicly disclosed or disclosed to the government? How?
  • 8. Are employment agreements required or prevalent? If so, what provisions are common? Are any terms prohibited or unenforceable?
  • 9. What are the prevalent types and structures of incentive compensation? Do they vary by level or type of organisation?
  • More...

Executive compensation and employee benefits—Spain—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to executive compensation and employee benefits in Spain published as part of the Lexology Getting the Deal Through series by Law Business Research (published: November 2020).

Authors: J&A Garrigues SLP—José Luis Palao; Eduardo Gómez de Salazar Sabán Sabán; Ana Ortiz Garcia; Bernardo Pérez-Navas

1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.

In Spain, there is a distinction between directors, whose relationship has a commercial nature, and executives bound by an employment relationship.

As regards executives with an employment relationship a distinction is made between top executives and ordinary executives.

Top executives are the employees who exercise authority inherent in the legal ownership of the company, referring to the general aims of the company and acting with independence and full responsibility. Their relationship is ruled by Royal Decree No. 1382/1985 and by civil laws.

For other executives, general employment regulation applies, consisting of the Workers’ Statute and the relevant collective bargaining agreements, since they are considered as ordinary employees.

Conversely, directors’ remuneration is regulated by the Companies Act. In addition, in case of listed companies, there are certain recommendations regarding directors’ remuneration included in the Good Governance Code of Listed Companies. Recommendations included in the Good Governance Code are subject to the internationally recognised

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