* Will consolidate any 2020 dividend into final full-year dividend
* Executive chairman and CEO will take a 50% pay cut in 2020
* Bank has created fund of at least 25 million euro to fight coronavirus
* (Adds details on dividend measures and management pay cut)
By Jesús Aguado
MADRID, March 23 (Reuters) - Spain’s Santander said on Monday it would not pay its first interim dividend in November and would review the dividend paid from 2020 earnings, while senior management took a 50% pay cut as part of the bank’s measures to help fight the coronavirus outbreak.
The initiative by the euro zone’s biggest bank in terms of market value could pressure other European banks to follow suit with similar measures as large companies, small and mid-sized businesses and households grapple with the impact of the respiratory disease.
Spain has been in lockdown since March 14. Prime Minister Pedro Sanchez said on Sunday he would seek parliamentary approval to extend a two-week state of emergency by 15 days, until April 11, in an effort to combat the coronavirus.
The number of coronavirus cases in Spain rose to 33,089 on Monday, making Spain the second hardest-hit European country, after Italy. The country’s death toll surpassed 2,000.
“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,” Santander Executive Chairman Ana Botin said in a statement.
While the European Central Bank has promised emergency liquidity and credit lines, European governments are scrambling to put together additional spending packages.
Although Santander said on Monday it met the capital requirements to maintain its current dividend policy of a 40% to 50% payout ratio, the board committed to review the dividend paid from 2020 earnings in order to direct resources to support people and businesses in need.
The bank said its board agreed to consolidate any dividend from 2020 earnings into a single final proposed dividend, to be submitted to the Annual General Meeting for approval in 2021, once the full impact of the pandemic was known.
Santander usually pays dividends twice a year, its first in November and the second and final full-year dividend the following May.
Against 2019 earnings, Santander paid 0.23 euro per share in dividends.
To support efforts to fight the coronavirus outbreak, the bank said it created a fund of at least 25 million euros ($26.8 million) financed through a reduction in compensation of senior management, board compensation and voluntary contributions from Santander employees.
The bank said that Botin and Chief Executive Jose Antonio Alvarez had committed to reduce their total compensation (salary and bonus) by 50% for 2020, and the compensation of non-executive directors would be reduced by 20%.
As part of wider measures, Santander also said on Monday it would hold its annual shareholders’ meeting at its Madrid headquarters instead of in the northern port city of Santander, without guests attending in person.
Santander has also closed slightly less than half of its branches in Spain because of reduced visits from clients as the coronavirus spreads, a source with knowledge of the matter said on Friday, while its more than 20,000 staffers in Spain are already working from home.
$1 = 0.9327 euros Reporting by Jesús Aguado; Editing by Jessica Jones, Leslie Adler and Peter Cooney