Financial Times: Repsol pays Cortina €19m to go: “Royal Dutch/Shell, the energy group, paid Walter van de Vijver, its former head of exploration and production, €3.8m in severance earlier this year after the company was forced to cut its reserves estimates. ”(ShellNews.net) 11 Nov 04

By Roberto Casado in Madrid

Published: November 11 2004

Alfonso Cortina, the multi-millionaire former chairman of Repsol-YPF, is to receive a pay-off of €19m ($24m) after his resignation from the Spanish oil group under intense political pressure last month, Expansión, the Financial Times' Spanish sister paper, has learned.

The pay-off is equivalent to more than five times Mr Cortina's salary last year and up to 10 times severance packages received by other leading executives in the oil industry recently.

Mr Cortina earned €3.6m last year, including fixed and variable compensation. In 2002, he took €2.6m.

Board directors in the UK usually receive pay-offs of between six months' and a year's salary.

Spanish companies have come under fire for paying large sums to departing executives. SCH, Spain's largest bank, recently paid its co-chairman and another senior executive €164m as a severance package.

Royal Dutch/Shell, the energy group, paid Walter van de Vijver, its former head of exploration and production, €3.8m in severance earlier this year after the company was forced to cut its reserves estimates.

Mr Cortina's pay-off is greater than the combined remuneration for all Repsol YPF's 14 board members in 2003. The board earned, including fixed and variable compensation, €9.68m last year, and €5.57m in 2002.

La Caixa, Spain's largest savings bank and the biggest shareholder in Repsol with a 15 per cent stake, pushed forward Antonio Brufau, until then president of Gas Natural, as Repsol chairman last month.

In forcing Mr Cortina to quit, La Caixa appeared to be doing Spain's ruling Socialists a favour by removing a chairman with close ties to the former People's party government.

Mr Brufau has closed the pay-off deal directly with Mr Cortina, sources close to the company said.

In addition, Mr Cortina is in talks with La Caixa to become new president of Inmobiliaria Colonial, the saving bank's real estate group. Ricard Fornesa, La Caixa president, is now Inmobiliaria Colinial's leading executive.

Mr Cortina still retains around 424,000 Repsol YPF shares, valued at €7.3m.

Mr Brufau and Mr Cortina had been business rivals. Two years ago, Mr Cortina torpedoed Gas Natural's takeover bid for Iberdrola, the number two electricity group in Spain.

The oil group will publish its third-quarter results today, which are expected to reflect a squeeze on margins.

Repsol-YPF declined to comment and Mr Cortina's aides didn't return calls.