* Directors' pay down almost 35 pct last year
* Chairman's bonus halved
* CEO's pay down nearly a third
MADRID, Feb 20 Santander reduced directors' pay by almost 35 percent last year, the Spanish bank said as executives at scandal-hit European rivals brace themselves for the possibility of even bigger bonus cuts.
Emilio Botin, Santander's chairman for the past 26 years, took one of the biggest cuts among top directors, with his remuneration falling 32 percent from 2011 to a little more than 3 million euros ($4 million), the bank's annual report said.
Botin's bonus was halved while his salary was frozen, though big banking bonuses are not as much of a hot issue in Spain as they have been in other parts of Europe.
Public scrutiny over payouts remains particularly intense in Britain, five years after major lenders had to be bailed out, and the European European is in the midst of talks aimed at enforcing a cap on bankers' bonuses.
Bonuses in Spain tend not to reach the heights of global players with larger investment banking divisions, which fuelled pay packages in the tens of millions of euros for top traders and executives in the past decade.
But the country's banks have gone through their own recent crisis because of a property market crash, culminating in the state's rescue of several lenders last year, pushing the country to ask Europe for 40 million euros for its weakest lenders.
That is likely to turn the spotlight on pay at rescued lenders such as Bankia, which is forcing shareholders - including many customers with small savings accounts - to take big losses as part of its bailout.
Another Santander executive to take a big pay cut was CEO Alfredo Saenz, in the spotlight this month after a Spanish court partially annulled an official pardon granted to him in 2011. The court ruling effectively reinstated Saenz's criminal record after a 2009 conviction for false accusations against debtors.
Saenz's earnings at Spain's biggest bank were down nearly a third to 8.24 million euros last year.
Santander, which this month reported a 59 percent fall in 2012 net profit, said that fixed pay for directors remained frozen at 2009 levels. Botin's daughter Ana Patricia, who runs Santander's British arm, took a less harsh bonus cut than others, however, with her variable pay falling by about 21 percent to 2.25 million euros.
The bank also gave details in the annual report of how much of its credit portfolio was refinanced or restructured last year, providing an insight into how much of troubled borrowers' debt is rolled over or patched up.
The bank said it had 55.7 billion euros of refinanced or restructured loans, equating to 7.5 percent of its total lending. Of this, 18 billion euros is classed as "doubtful".