You are Lucía Aramburu-Salazar, 52, Chair of the Compensation Committee at Energías Tucanes. The CEO's five-year LTIP comes to the board for approval Wednesday. The proposal vests entirely on a metric that has stopped meaning what it used to mean.
The situation
Energías Tucanes is a BMV/Madrid dual-listed integrated energy firm — gas distribution and regulated power across Mexico and a growing renewables build-out in Spain. €5.8B revenue. Market cap €9.4B. CEO Verónica Sandoval-Tinajero, in role four years, has refreshed the strategy and is now asking the board to approve her five-year LTIP. The proposal: 8.5× base salary in performance shares, vesting entirely on relative TSR vs. a peer index of nine European/Latin utilities. Cliff vest in year 5. No operating-metric component.
You have chaired the comp committee for two years. The package as proposed is consistent with prior CEO grants and with European peer practice. It is also, on the data, an invitation to pay €18–24M for a tailwind the CEO did not create — gas prices have lifted the entire peer set and Tucanes's TSR has ridden the wave even as its operating performance has lagged the same peers. The board is split. The CEO has framed this as a vote of confidence.