2026 in a session marked by a significant vote of punishment by institutional investors on the company’s remuneration policy. , of euros paid to José María Álvarez-Pallete and Ángel Vilá, obtained the support of only 65.29% of the capital present or represented, the lowest level of support of the entire day.
According to the official scrutiny data, this item on the agenda faced a rejection of 18.74% of the votes and an abstention of 15.97%, evidencing the fracture between the board of directors and large international funds such as Norges Bank or Calpers given the conditions of departure of the previous management leadership. This figure means that more than a third of the shareholders who participated in the meeting avoided giving their explicit support to the remuneration policy of the previous year, a result that, although not binding because it is merely advisory, sends a reputational warning signal to the company’s governing body.
The origin of this investor hostility lies in the million-dollar amounts paid to the previous management leadership, who was dismissed in January 2025. Álvarez-Pallete, who left the executive presidency, received a total of 44.5 million euros, and the former CEO Ángel Vilá received 33.9 million euros.
Norges opposition
These amounts activated the opposition of some of the large sovereign and international funds. The Norwegian fund, owner of 1.5% of Telefónica’s shares, justified its vote against by referring to a lack of transparency on the part of the board and the need for extraordinary profits to have a clear business justification.
For NBIM, the payment of four years of salary as compensation is unacceptable, when international good governance practices recommend limiting these compensations to a maximum of two years. Likewise, the fund argued that senior management compensation should be mostly linked to shares locked up for periods of five to ten years to align the interests of managers with the long-term value of the company.
Norway’s position was joined by the California pension funds, Calpers and Calstrs, which also cast negative votes on the remuneration report. This opposition bloc followed the recommendations of the two main voting advisors in the market, ISS and Glass Lewis. Both organizations described the figures as disproportionate and unrelated to the market situation. Glass Lewis especially highlighted the disconnect between the remuneration of the top management and the stock market performance of the company, whose stock has experienced a decline of 16% in the last twelve months, coinciding with an adjustment in the dividend policy.
As a measure to appease criticism, the new design, included in item VII of the agenda, received the support of 81.29% of shareholders. This plan introduces severe restrictions, such as the prohibition of simultaneously receiving severance pay and social security plan rights. In addition, the maximum compensation will be reduced to two years, aligning with international standards. This change of course suggests that the current protest was specifically directed at the exit conditions agreed with the previous team.
Discontent with García Blanco
The discontent also carried over to the re-election of María Luisa García Blanco as councilor, which garnered the greatest rejection among administrators, with 2.94% votes against and 0.55% abstentions. Critical investors identified her as technically responsible, from her position on the appointments and remuneration committee, for authorizing the questioned payments. In contrast, other appointments such as Mónica Rey Amado or Jane Thompson obtained support levels higher than 98.9%.
nor escaped the scrutiny of los proxy advisors. Glass Lewis focused on his fixed salary of 1.9 million euros, questioning whether this remuneration is not more directly linked to specific profitability objectives for the shareholder. However, the management of the board of directors was ratified by a large majority of 98.37% of the votes.
The approval of the agreements was possible thanks to the solid support of the new stable core of shareholders. The State Society of Industrial Participations (SEPI), with 10% of the capital, together with CriteriaCaixa (9.9%), Saudi Telecom (9.96%) and BBVA (5%), added their positions to guarantee the institutional stability of the operator. In this sense, the SEPI abandoned the position of abstention that it maintained last year on remuneration matters to support the council’s proposals, thus neutralizing the weight of the block of international funds.
At the ordinary level, the board validated the 2025 annual accounts and the management report with a support of 99.24%. Point VI was also approved, relating to shareholder remuneration, which contemplates a dividend of 0.15 euros gross per share charged to reserves, payable on June 18, 2026, with support of 99.21%. Regarding the audit, PwC will continue as auditor for the financial year 2026 and will assume the period 2027-2029, after receiving a support of more than 99.1% in both points of the agenda.
The Telefónica 2026 Board registered a quorum of 65.71% of the share capital. In total, 27,661 shareholders attended, of which 5,057 were present and 22,604 were represented. The total number of shares that participated in the vote amounted to 3,726,001,130.
