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Santander bosses take 50% pay cut to fund Covid-19 fight

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Banco Santander chairman Ana Botin speaks during a news conference on January 29, 2020 in Boadilla del Monte, near Madrid, Spain. (Pablo Blazquez Dominguez/Getty Images)

The chief executive and chair of Spanish bank Santander (SAN) are taking voluntary pay cuts and diverting the money to fight Covid-19.

Santander said executive chair Ana Botín and chief executive officer José Antonio Alvarez would both reduce their total compensation for 2020 by 50%.

Botín earned €10m in salary and bonuses last year, while Alvarez made €8.2m.

Non-executive directors at the bank will also reduce their earnings by 20% and the cash saved through the pay cuts will be diverted to a new fund to fight novel coronavirus. Santander said the fund, which will also be topped up by employee donations, should reach €25m.

The money will be used for the production and purchase of medical equipment and protective clothing, as well as to make donations to groups and organisations fighting Covid-19.

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“The scale of the task before us demands a huge collective effort, with governments, central banks and other authorities, the private sector, charities and individuals, working together to limit the spread and provide care for those affected – whether directly or indirectly,” Botín said in a statement.

“We are committed to ensuring that Santander plays its part.”

Santander is the largest bank in Spain, which is facing one of Europe’s worst outbreaks of Covid-19. Almost 40,000 people have tested positive for Covid-19 in the country, making it the nation with the fourth highest number of confirmed cases in the world. More than 500 people have died as a result of the virus in just the last 24 hours, authorities said on Tuesday.

As well as announcing changes to executive pay, Santander said it would also delay a dividend payout until 2021 “in order to direct resources to support people and businesses in need”.

In the UK, Santander has reduced opening hours and closed somme branches in a bid to protect staff. 5,600 employees are currently working from home.