Shareholder Remuneration Policy

Starting in 1998, Telefónica changed its shareholder remuneration policy, replacing cash dividend payments with bonus issues. These operations were charged against free reserves and recognized shareholders' the right to receive, free of charge, one new share for every fifty shares held.

On July 24th 2002, Telefónica S.A. announced its commitment to restate cash dividend distributions as direct remuneration to shareholders. Complementary to the payment of dividends, the company has set the acquisition of its own shares as an alternative formula to remunerate its shareholder base, selectively and depending on the pace of cash flow generation and the market price of the shares.

Since July 2002 the Company maintained an increasing remuneration policy (dividends and several share buyback programs).

In July 2012, in an extremely challenging economic and financial environment, certain exogenous factors created severe instability. These unprecedented factors were beyond Telefónica’s control, and were crucial in order to make the Company take definitive steps to effectively defuse potential risks. Therefore, The Board of Directors decided that under the criteria of prudent administration and in the best interest of all Telefónica’s stakeholders that the dividend and share buyback program corresponding to 2012 be cancelled as a one-time exceptional measure.

In 2013, the Company has resumed its shareholder remuneration by paying a dividend of 0.75 euros per share, which will be paid in two tranches: a first payment was made in November 6, 2013 for an amount of 0.35 euros (charged to unrestricted reserves), which had been approved on the Annual General Shareholders Meeting held on May, 2013. The second tranche will be paid in cash in the second quarter of 2014.

The Board of Directors, at its meeting held on February 26, 2014, has agreed, regarding the 2014 dividend, to determine the amount thereof at 0.75 euros per share, payable in two tranches:

  • 0.35 euro per share by means of a "scrip dividend" in the fourth quarter of 2014.
  • 0.40 euro per share in cash in the second quarter of 2015.