The Malta Independent 28 May 2023, Sunday
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BOV shareholders to be asked to approve salary increase for bank’s chairman, non-executive directors

Albert Galea Sunday, 22 May 2022, 08:00 Last update: about 2 years ago

Bank of Valletta shareholders are going to be asked to approve a salary increase for the bank’s chairman and non-executive directors at an upcoming Annual General Meeting to be held in June.

In a notice and circular to shareholders, sent ahead of the bank’s AGM, which will take place virtually on 2 June, BOV set out a number of resolutions for which it is seeking shareholder approval.


One of those resolutions is for the revision of the companies Remuneration Policy for Directors, as set out in a circular sent to shareholders a week ago.

The main changes to this 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, the executive directors on the bank’s board of directors will not, under the revised policy, receive their Board honoraria in addition to their executive role package.

The last Remuneration Policy for Directors was approved during the AGM held in November 2020.

Another resolution being put forward to shareholders is for them to ratify and approve an interim dividend paid on 28 January, which was worth €15.4m – equivalent to €0.0264 per share.

It 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 in respect of the financial year ended 31 December 2017. This final dividend was paid on 18 May 2018.

The changes come when the bank is under pressure from shareholders who are irritated at its decision to settle an Italian court case for €182.5m earlier this month, ending a saga which was close to a decade long.

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

The claim for €363m was being made by some 13,000 bondholders of Deiulemar Group.  An offer to settle for €50m was rejected late last year.

The case began after liquidators of the Deiulemar Group, together with representatives of 13,000 Italian bondholders, filed a court application against BOV after they lost their life-savings.

In 2009 BOV had allegedly taken over a trust that held €363m in assets of the shipping company, which went bankrupt in 2012. In 2014 a number of members of the founding families of the shipping company were jailed for illegal financial transactions. When the shipping company went bankrupt, the bondholders who lost their lifesavings turned to the Maltese bank.

Even though BOV felt it had very strong legal standing in the case, it lost its case at the Tribunal of Torre Annunziata in Italy earlier this year and was ordered to pay the full €363m.  The bank subsequently appealed the judgement, but settled it for half the sum which was being claimed, saying that even though they believed that they had a solid legal basis backing them, they feared that the hostile environment in Naples could mean that the case is decided against them.

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

Shareholders clamoured for the bank’s AGM to be held physically, however, it will still be held online, with the bank saying that it was too late for it to change plans from a logistical perspective.

The bank has however published a question and answer form on the case and will be hosting a physical meeting with shareholders specifically on the case on 15 June.

Presently, 25% of the bank's shares are held by the government, UniCredit S.p.A. holds 10.20% and the remaining 64.80% are owned by the general public.


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