The Telefónica shareholders’ meeting has earned the title of historic after registering two milestones: the end of the bonuses for executive directors and the unanimous support for José María Álvarez-Pallete, president of the company. Among the points approved, he highlighted the new remuneration policy for directors from 2024 to 2026, which involves eliminating the possibility of granting extraordinary remuneration to executive directors and which was approved with 92.65% of the votes in favour. This new remuneration policy will also include a reduction in the maximum short-term variable amount. The dividend of 0.30 euros on account of the 2022 financial year was also approved.
During his turn to respond to shareholders, the Chairman of Telefónica remarked that the European telecommunications sector has been one of the hardest hit on the stock market over the last seven years due to excessive regulation, artificial competition and the deployment of new networks that It has affected both revenue and cash generation. Likewise, the manager explained that the situation of the telco sector “is not sustainable”, since the return on investment is below the cost of capital, which makes it difficult to deploy the latest generation network.
Despite this, Álvarez-Pallete highlighted the success in the application of the strategic plan launched in 2019 and the renewed strength of the sector with the opening of debates such as the need for consolidation in Europe and the fair contribution of technological giants to financing the telecommunication network. The manager also stressed that the company will continue to grow in revenue in its key markets and pointed out that it will stabilize its operating result before amortizations (Oibda) in Spain from the second half of the year.
In data, in the last seven years Telefónica has distributed 17,300 million euros in remuneration to shareholders and net worth has increased by 9,300 million. The reduction of the net debt by more than 23,000 million and the investments in recent years, amounting to 55,000 million euros, are other aspects that Pallete highlighted, in addition to the construction of four million kilometers of fiber and 115,000 stations 4G and 5G basis. Likewise, the firm has completed its transformation into a connectivity and digital services company, since these revenues have gone from weighing 46% on the balance sheet in 2015 to 73% today.
As Pallete defended, “we have complied despite the arrival of many black swans. We have complied because Telefónica always complies. It hasn’t been easy, but we’ve done it.” In addition, he has once again called for a change in the regulation suffered by the company, designed for “a former copper monopoly. It cannot be regulated by the rules of a world that no longer exists,” she stressed. In this field, he also recalled the need for a fair contribution from large technology companies for the maintenance of networks.
For his part, the CEO of Telefónica, Ángel Vilá, highlighted that after the rise in prices in Spain, the number of casualties is remaining at “historically low” terms.