CVM establishes deadline for the disclosure of compensation data
Since June 25, all companies must disclose complete information about their executive compensation, including the minimum, average and maximum values paid to their board members and directors – pursuant to the item 13.11 of the reference form. The rule is part of the Official Letter 04/2018 issued by the Office of the Superintendent of Corporate Relations (SEP) of the Brazilian Securities and Exchange Commission – CVM. The determination is the result of the decision of the 8th panel of the Regional Federal Appellate Court of the 2nd Region that, in the end of May, unanimously reversed the lower court decision that allowed the partial disclosure of executive compensation.
With the end of the imbroglio – a legal battle that started in 2010 -, the market could see that 12 out of 25 companies with the highest compensation values were protected by a judicial decision reversed in the beginning of May and now started to disclose the minimum, average and maximum compensation paid to their executives. According to a survey conducted by the Valor Econômico newspaper, “these companies spent more than BRL 10 million with a single executive in 2017, and 11 of them paid more than BRL 20 million.” The companies that paid the highest amounts were Vale (BRL 58.5 million) and GPA (BRL 49.7 million). In the financial sector, Itaú (BRL 40.9 million) and Santander (BRL 29.9 million) are among the ones that paid the highest compensation values.
Despite under a court-supervised reorganization, Oi was the company in the telecommunication industry that paid the highest compensation values to its executives in 2017: its most well-paid executive received BRL 15.5 million last year, almost 50% higher than the 2016 compensation. In Vale, the leaving of the CEO Murilo Ferreira – the executive was substituted for Fabio Schvartsman in May 2017 – costed BRL 58.5 million to the mining company.
The Official Letter is available here.
