Eighty-three executives collectively spent 15m over 10 years at savings bank that merged to become Bankia before 2012 bailout. Fresh evidence is emerging of the spendthrift lifestyle of the directors of the once-mighty Caja Madrid savings bank even as the 300-year-old institution drifted into crisis. The 83 directors were each issued with a black credit card, with the collective bill reaching 15m (12m) over a 10-year period. The money was spent on holidays and shopping trips, with 3m spent in restaurants. In the 12 months before its 2012 bailout, Caja Madrid paid out more than 1m in daily allowances and its directors received 1,200 gifts, while chief executive, Miguel Blesa, spent 10,000 on wine out of the total of 436,700 he ran up on the credit card. This was on top of his 3.5m salary. Former finance director Ildefonso Sanchez Barcoj topped the spending list, with 484,200 on his card. All of the directors were political appointees, installed by their respective parties and trade unions. Jose Antonio Moral Santin, of the leftwing Izquierda Unida party, used his card to take out 365,000 in cash. Twenty-two directors continued to use their cards after they had ceased to have any role at the bank. In 2010, Caja Madrid merged with a series of smaller savings banks to become Bankia. On 9 May 2012, the bank reported a profit of 328m, a figure that was adjusted two weeks later to a loss of 4.3bn. One year on this was revised to 19bn, the largest corporate loss in Spanish history. Bankia was bailed out in 2012 by the Spanish government, which took a 45% stake in it. Earlier this year the government sold 7.5% for 1.3bn. Blesa and the former Bankia chief executive and economy minister Rodrigo Rato have been summoned to appear before a judge to answer questions about the credit card scandal. Four executive directors have between them repaid a total of 200,000.

In view of this article, please discuss your views on director duties, the balance of power in the context of a corporation, as well as on agency costs and director compensation.