The executive president of Telefónica, José María Álvarez-Pallete, defends during the general meeting of shareholders that they understand “those who want to be in Telefónica because it is part of the future.” The executive has welcomed the State Society of Industrial Participations (Sepi) and Saudi Telecom Company (STC), although without mentioning them and emphasizing the support received from the “large and small” partners who have supported the Date to the telecommunications operator. He once again demands “fair regulation” and highlights the cash and income growth plans reflected in the new roadmap.
“We understand the interest that Telefónica arouses in the investment community, we understand all the parties that want to enter because Telefónica is part of the future, a future on which it has bet,” he argued. He has not expressly referred to Sepi, which is in the midst of a purchase plan to reach 10% of the securities and be the largest shareholder, nor to STC, the Arab group controlled by the sovereign fund PIF that seeks to reach 9.9% after adding . the first 4.9%. He has only limited himself to welcoming “those who have decided to participate in that future.”
In this context, the chief executive has tried to give a certain nod to the historical shareholders, among which are Criteria Caixa and Caixabank or BBVA, or to the minority shareholders – to whom he also referred in the last presentation of results. “We thank those who have walked the path with us, large and small, because they knew how to see where they needed to be,” he highlighted without making any mention of governance or potential changes in the structure of the council in the near future.
Despite the acceleration in purchases carried out by Sepi in recent weeks, there has not been time to request the incorporation of an item on the board’s agenda to designate its member on the board of directors. Everything indicates that there will be an extraordinary assembly before the summer in which the entry of Sepi and a potential incorporation of STC will also be analyzed, which still has not moved to request authorization from the Government to overcome the 5% barrier based on the ‘anti-opas shield’.
In addition to this brief reference to the new shareholders, the president, who has insisted on the operator’s centenary, mentions the growth plans contemplated in the new roadmap (GPS): growth in annual income of 1% and of cash generation by 50% to 3,000 million euros, reducing debt to a ratio between 2.5 and 2.2 times with the distribution of at least 5,100 million in dividends. In the economic balance sheet, it has insisted that over the last eight years it has accumulated an investment of 71,500 million, with a debt reduction of 22,000 million and has generated more than 21,000 million euros of net profit (and almost 40,000 million in cash).
“fair” regulation
The executive once again demands “fair regulation” that allows the operator to compete “on equal terms.” The executive has once again wielded this dual role with respect to large technology companies. On the one hand, he has committed to “collaborate with the sector and the technological ecosystem so that the supercomputer we have built connects with those in our sector and with the cloud.” On the other hand, he insists that they are going to “fight to avoid abusive use of the networks”, although he does not make any mention of the so-called ‘fair share’, after it has lost strength in Europe.
“We see the technological platforms that today dominate the world generating cross-border sovereignty that challenges national sovereignties because they reign over a world that still does not have rules,” he highlighted, while warning that those same companies -Google, Amazon, Facebook, Microsoft…- are “at risk due to the emergence of new computing champions.” In a market with expanding Artificial Intelligence, he has argued that it will become a “source of value and efficiency and, therefore, on that connectivity we have built cognitive capacity that enables us to offer cutting-edge services and products.”
The planes analyzed
In this context of governance, the assembly – which met with a quorum of 62% (compared to 58% last year) – will approve the re-election of three veteran independents (Javier Echenique, Verónica Pascual Boé and Claudia Sender), Isidro Fainé for Criteria Caixa (after the ‘sorpasso’ as a partner of the investment arm of the Foundation due to the step back of Caixabank), together with the ratification of the two independents who were appointed at the end of last year and who have a relationship and experience previous in the company, as son Solange Sobral and Alejandro Reynal.
In addition to this matter, both the annual remuneration report and the new long-term incentive plan of up to 200 million euros for the group’s top management have also been put to a vote. The proxies had previously warned about the setup of this bonus. The two big ones received their blessing, although the European, Corporance, recommended voting against the two points by showing their concern about the variable and total import of the executive president and the CEO, which could amount to 475% and 437% respectively.
