BOV shareholders will be asked to approve the pay rise for the bank’s chairman and non-executive directors

Bank of Valletta shareholders will be asked to approve a pay rise for the bank’s chairman and non-executive directors at an upcoming annual general meeting in June.

In a notice and circular to shareholders, sent ahead of the bank’s general meeting, which will be held virtually on June 2, BOV has presented a number of resolutions for which it is seeking shareholder approval.

One of these resolutions relates to the revision of the compensation policy for directors of the company, as set out in a circular sent to shareholders a week ago.

The main changes in this regard are that the annual remuneration of non-executive directors will increase from €20,000 per year to €22,000 per year, while the remuneration of the chairman will increase from €80,000 per year to €82,000 per year.

Meanwhile, executive directors on the bank’s board will not, under the revised policy, receive their fees from the board in addition to their set of executive roles.

The latest Directors’ Remuneration Policy was approved at the November 2020 General Meeting.

Another resolution proposed to the shareholders is that they ratify and approve an interim dividend paid on January 28, of a value of €15.4 million, or €0.0264 per share.

This is the first dividend issued since a final dividend of €0.08 gross per share (€0.052 net of tax) was proposed by the Board of Directors for the year ended December 31. 2017. This dividend balance was paid on May 18, 2018.

The changes come as the bank comes under pressure from shareholders angered by its decision to settle an Italian court case for 182.5 million euros earlier this month, ending a saga that has lasted nearly a year. decade.

BOV settled a massive €363 million claim by bondholders of defunct Italian shipping company Deiulemar for €182.5 million without admitting any liability on its part on May 4.

The request for 363 million euros was presented by some 13,000 bondholders of the Deiulemar group. A €50m settlement offer was rejected late last year.

The case began after the liquidators of the Deiulemar group, along with representatives of 13,000 Italian bondholders, filed a lawsuit against BOV after losing their savings.

In 2009, BOV reportedly took over a trust holding €363 million in assets of the shipping company, which went bankrupt in 2012. In 2014, a number of members of the shipping company’s founding families were jailed for financial dealings illegal. When the shipping company went bankrupt, bondholders who lost their savings turned to the Maltese bank.

Even though BOV felt it had very strong legal standing in the case, it lost its case in the Torre Annunziata court in Italy earlier this year and was ordered to pay the full 363 million euros . The bank later appealed against the judgment, but settled it for half the sum claimed, saying that while it believed it had a strong legal basis to back it, it feared the hostile environment in Naples would mean let the matter be decided. against them.

Still, the settlement left a bitter taste in the mouths of shareholders, particularly after BOV Chairman Gordon Cordina admitted to having MaltaToday‘s business journal that the case posed an existential risk to the bank – the first time a senior BOV official had acknowledged the risk.

Shareholders have called for the bank’s annual general meeting to be held physically, but it will still be held online, with the bank saying it was too late for it to change its plans logistically.

The bank has, however, issued a question and answer form on the matter and will hold a physical meeting with shareholders specifically on the matter on June 15.

Currently, 25% of the bank’s shares are held by the government, UniCredit SpA holds 10.20% and the remaining 64.80% is held by the general public.

William M. Mayer