Remuneration Information • Mar 25, 2021
Remuneration Information
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in accordance with articles 123-ter of the Italian Consolidated Law on Finance and 84-quater of the Consob Issuers' Regulations
Approved by the Board of Directors on 18th March 2021
Issuer: Recordati Industria Chimica e Farmaceutica S.p.A. Website: www.recordati.it Financial year to which the Report refers: 2020
| Letter from the Chair of the Committee for the Remuneration and the Nominations 4 | ||
|---|---|---|
| Introduction6 | ||
| Executive Summary 8 | ||
| 2021 New Features11 | ||
| Section I: 2021 Remuneration Policy Report12 | ||
| 1. | Engagement and remuneration policies13 | |
| 1.1 | Voting results and investor feedback 13 | |
| 1.2 | Engagement activities carried out by Recordati 13 | |
| 1.3 | Pay mix of the Chief Executive Officer, Group General Manager and Key Management Personnel 14 |
|
| 2. | Governance of the remuneration process15 | |
| 2.1 | Bodies and persons involved 15 | |
| 2.1.1 | Shareholders' Meeting 15 | |
| 2.1.2 | Board of Directors 15 | |
| 2.1.3 | Remuneration and Nominations Committee 17 | |
| 2.1.4 | Other intra-board Committees 19 | |
| 2.2 | Policy approval process 19 | |
| 2.3 | Independent experts and other persons involved 20 | |
| 2.4 | Derogation procedure in exceptional circumstances 20 | |
| 3. | The Company's Remuneration Policy 21 | |
| 3.1 | Purposes of the Policy and its link with corporate strategy 21 | |
| 3.1.1 | Recordati's Sustainability Plan 23 | |
| 3.2 | Principles and criteria underlying the Policy 23 | |
| 3.3 | Implementation of the 2021 Remuneration Policy 24 | |
| 3.4 | Remuneration of the Board of Directors and of the Board of Statutory Auditors 24 | |
| 3.4.1 | Remuneration of the Board of Directors 24 | |
| 3.4.2 | Remuneration of the Board of Statutory Auditors 25 | |
| 3.5 | Remuneration of the Chair of the Board of Directors 25 | |
| 3.6 | Remuneration of the Chief Executive Officer and of Executive Directors 26 |
| 3.6.1 | Market references and peer groups 26 |
|---|---|
| 3.6.2 | Fixed component of remuneration 27 |
| 3.6.3 | Short-term variable component (MBO) 28 |
| 3.6.4 | Long-term variable component (LTI) 32 |
| 3.7 | Remuneration of Key Management Personnel 33 |
| 3.7.1 | Fixed component of remuneration 33 |
| 3.7.2 | Short-term variable component (MBO) 34 |
| 3.7.3 | Long-term variable component (LTI) 35 |
| 3.8 | Further information on remuneration 35 |
| 3.8.1 | Transaction Bonus and Integration Bonus 35 |
| 3.8.2 | Non-monetary benefits 36 |
| 3.8.3 | Severance indemnity 36 |
| 3.8.4 | Additional insurance, social security and pension coverage 38 |
| Section II: Report on the remuneration paid for 202039 | |
| Introduction40 | |
| Part I41 | |
| 1. | Results of votes 41 |
| 2. | Activities of the Remuneration and Nominations Committee 41 |
| 3. | Fixed remuneration 42 |
| 4. | Variable remuneration 44 |
| 5. | Remuneration for participation in board committees and for members of the Board of Statutory Auditors 47 |
| 6. | Non-monetary benefits 48 |
| 7. | Information on the consequences of termination of employment or management relationship 48 |
| 8. | Annual variations in remuneration paid and corporate performance 48 |
| Part II50 | |
| Table 1 - Remuneration paid to Directors, Statutory Auditors, General Managers and other Key Management Personnel 50 |
|
| Table 2 - Stock Options assigned to Directors, General Managers and other Key Management Personnel members 55 |
|
| Table 3B - Monetary incentive plans for Directors, General Managers and other Key Management Personnel 57 |
|
| Table 4 - Shares held by Directors, Statutory Auditors, General Managers and other Key Management Personnel 58 |
of the Committee for the Remuneration and the Nominations
Dear Shareholders,
Together with the other members of the Remuneration and Nominations Committee, I hereby present to you the Report on the 2021 Remuneration Policy and Remuneration Paid for 2020, structured as required by article 123 ter of the Consolidated Law on Finance and approved by the Board of Directors on March 18th, 2021.
2020 has undoubtedly been a challenging year, due in particular to the Covid-19 pandemic, which affected and is still affecting the economic and social situation and the Company's results. Despite this, Recordati has continued its activities whilst complying with all the measures necessary to ensure the health and safety of its personnel, demonstrating resilience and the ability to react in a challenging environment.
Despite the pandemic, the Committee has continued its work on key remuneration topics. During 2020, we repeated the in-depth analysis of the voting taken at the last Shareholders' Meeting and we carefully considered
the degree of alignment between the remuneration plans and the interests of Shareholders and Stakeholders, the Company's strategic plan, the Italian and EU reference legislation, as well as market best practices. In order to develop and ensure a constant and direct link with our institutional investors and proxy advisors, Recordati has also defined an 'engagement plan' aimed at activating, from early 2021, a channel of communication with those that have an interest in our Company. All the feedbacks collected during the engagement meetings and the analyses that we have carried out gave us a valuable input for the amendments we have included in this Report and, in general, in Recordati's 2021 Remuneration Policy.
In addition, this Report incorporates the additional changes introduced by the publication of the updated version of the Issuers' Regulations by Consob and the new Corporate Governance Code by Borsa Italiana, to which Recordati largely adheres.
Therefore, for the purpose of further aligning to the current legislation and improving the transparency and usability of this Policy, Recordati has decided to:
During 2020, in addition to the activities already indicated, the Remuneration and Nominations Committee has reviewed the long-term variable incentive scheme, carrying out in-depth analyses aimed at also ensuring greater alignment with the new Corporate Governance Code and with investors' and proxy advisors' recommendations. As a result of this process, the Company launched a new long-term incentive plan, the 2021-2023 Stock Option Plan, that will be subject to approval by the Shareholders' Meeting of 20th April 2020. The proposed plan has some new key features such as a 3-year minimum vesting period for all the options, the assignment of the options on an annual basis, the introduction of a different performance condition, of a lock-up period of 2 years, for beneficiaries who are members of Recordati's top management and of an acceleration clause in case of change-of-control followed by delisting.
In this context of strong transformation and strategic innovation, we believe that this Remuneration Policy is consistent with the Group's clear and distinctive vision and confirms our people's value as a fundamental competitive advantage with a view to achieving long-term sustainable results for Investors and other stakeholders.
Finally, on behalf of the entire Remuneration and Nominations Committee, I would like to thank you for the attention paid to this Report.
Best regards,
Joanna Le Couilliard Chair of the Remuneration and Nominations Committee
This Report on the Remuneration Policy and the remuneration paid (hereinafter the 'Report') has been prepared by Recordati S.p.A. (hereinafter 'Recordati' or the 'Company') in compliance with the provisions of article 123-ter of Italian Legislative Decree no. 58 of 24th February 1998 (hereinafter 'Consolidated Law on Finance') and the amendments made by Italian Legislative Decree no. 49 of 10th May 20191 , by article 84-quater of the Issuers' Regulations issued by Consob with resolution no. 11971 of 1999, as subsequently amended2 (hereinafter the 'Issuers' Regulations'), and, on a voluntary basis, in accordance with the new Corporate Governance Code for listed companies (hereinafter the 'Corporate Governance Code' 3 ), to which Recordati largely adheres.
In accordance with the requirements of article 123-ter of the Consolidated Law on Finance, the Report consists of two sections.
Section I illustrates the Remuneration Policy adopted by the Company for the 2021 financial year (hereinafter the 'Remuneration Policy'), with reference to the following persons:
Section I of the Report also illustrates the general purposes and procedures used to formulate and adopt the Remuneration Policy as well as the bodies and persons responsible for the proper implementation of such Policy.
The 2021 Remuneration Policy was approved by the Company's Board of Directors on 18th March 2021, on the proposal of the Remuneration and Nominations Committee. It may be updated by the Board of Directors, on the proposal of the Remuneration and Nominations Committee, which is responsible for the periodic assessment of its adequacy, overall consistency and effective application.
Section II of the Report provides information, with reference to the 2020 financial year, on each of the items that
1 Article 123-ter of Italian Legislative Decree no. 58 of 24th February 1998, (the 'Consolidated Law on Finance' updated on the basis of Italian Legislative Decree no. 49 of 10th May 2019) provides, in paragraph 3-bis, that 'companies shall submit the remuneration policy [...] to a shareholder vote, in any case at least every three years or at the time of making amendments to this Policy'. Paragraph 3-ter also states that 'the resolution provided for by paragraph 3-bis is binding' (i.e. on Section 1 of this document) adding 'if the shareholders' meeting does not approve the Remuneration Policy subject to a vote pursuant to paragraph 3-bis the company shall continue to pay remuneration compliant with the Remuneration Policy most recently approved by the shareholders' meeting or, in the absence of this, may continue to pay remuneration compliant with existing practice.' Finally, paragraph 6 provides for '[...] the shareholders' meeting [...] resolves in favour or against the second section of the report established by paragraph 4. The resolution is not binding'.
2 In December 2020, Consob published the final version of the Issuers' Regulations. The regulatory amendments made aim to 'adapt the secondary legislation to the second European Directive on shareholder rights (Shrd2)' and concern: '(a) the transparency discipline regarding remuneration with regard to advertising and the contents of the related report on the remuneration policy and remuneration paid; (b) the disclosure schemes, which are refined depending on the evolution of market practice; (c) the disciplines on the transparency of asset managers and voting consultants, with reference to which the methods and terms of compliance are indicated.'
3 On 31st January 2020 the Corporate Governance Committee published the new Corporate Governance Code to be applied by listed companies starting from the first financial year that begins after 31st December 2020. The new Code of Corporate Governance Code was adopted by the Company by a Board Resolution dated 29th October 2020.
4 It should be noted that in December 2020 an update of the document was published, which will be effective as of 1st July 2021.
compose the remuneration of the persons indicated above in points i) to iv), including the members of the Board of Statutory Auditors, as well as the details, in an appropriate table, of the remuneration paid to those persons for any reason and in any form by the Company or its subsidiaries during the 2020 financial year, in addition to remuneration not yet paid on the date of the approval of the Report but relating to the 2020 financial year. In accordance with the provisions of the Issuers' Regulations, information is also provided on the annual variations in the remuneration of the persons whose remuneration is provided on an individual basis, the Company's performance and the average remuneration of employees starting from 2019.
Data on stock options granted to the said persons in implementation of the current Stock Option Plans is also reported in another table pursuant to article 84-bis paragraph 5, of the Issuers' Regulations. Finally, another table illustrates the shares held in the Company or its subsidiaries by the above persons (and by persons related to them) pursuant to article 84-quater, paragraph 4, of the Issuers' Regulations.
In light of the amendments made to article 123-ter of the Consolidated Law on Finance by Italian Legislative Decree no. 49 of 10th May 2019, Section I, i.e. the 'Report on Remuneration Policy', is subject to a binding vote by the Shareholders' Meeting called to approve the Financial Statements for the financial year ended as at 31st December 2020, while Section II, i.e. the 'Report on remuneration paid', which provides detailed information on the remuneration for the 2020 Financial Year, is subject to a consultative vote by the same Shareholders' Meeting.
The text of this Report is disclosed to the market by the twenty-first day prior to the date of the Shareholders' Meeting called to approve the 2020 Financial Statements, in accordance with current regulations, and can be viewed in the Corporate Governance section of the Company's website www.recordati.it.
The Information Documents relating to the existing remuneration plans based on financial instruments can be found in the Corporate Governance section of the Company's website https://www.recordati.com/en/corporate_governance/remuneration/stock_option_plans/.
The main elements of the 2021 Remuneration Policy of Recordati are set out below.
Recordati's Remuneration Policy aims at attracting, retaining and motivating managers with the professional requirements and experiences needed to manage and develop the Group successfully, ensuring that the interests of the management and those of the shareholders and the other stakeholders are aligned and promoting the constant creation of sustainable value in the medium- and long-term.
The Remuneration Policy is also defined in coherence with the corporate strategy, providing that each of the remuneration components offered to the management responds to precise goals for the pursuit of the strategic vision of the Group.
This consistency is ensured by the objectives of the short-term and long-term incentive schemes, which are designed to focus the management on the following objectives:
In the field of sustainability, Recordati also defined a Sustainability Plan in 2020, focused on four priority areas, underpinned by a fifth fundamental pillar - ethics and integrity - which includes the principles that transversely guide the Group's daily operations:
The Company's Remuneration Policy promotes the achievement of all the milestones of the ESG roadmap.
| Purposes | Modes of operation | Components | ||||
|---|---|---|---|---|---|---|
| To enhance the skills, experiences and support required for the |
The fixed remuneration is defined in such a way as to be consistent with the characteristics, responsibilities and any proxies associated with the role. |
The following table summarizes the fixed remunerations provided for the Chair, the CEO, and the Group General Manager: |
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| assigned role. | The Company monitors on an annual basis the main market practices for comparable figures in order to ensure the consistency and competitiveness of the remuneration offered to its top positions. |
Director's Fee |
Fixed Rem. | Total | ||
| Chair | 60,000 € | 180,000 € | 240,000 € | |||
| CEO | 60,000 € | 1,140,000 € | 1,200,000 € | |||
| Fixed component | Group General Manager |
60,000 € | 450,000 €5 | 510,000 € | ||
| Other Executive Directors: they have waived the receipt of any remuneration for the position as Director6 Other Non-Executive Directors: 60,000 €. Key Management Personnel: gross annual remuneration defined in line with the role and areas of responsibility. |
Purpose of the Policy and link with corporate strategy
5 Gross annual remuneration as employee.
6 These directors are identified as Executive Directors in accordance with the provisions of the Corporate Governance Code as they hold managerial positions in the parent companies and/or companies of the CVC Group (including the positions also held at the Company).
| To promote a performance culture and |
The payment of the annual variable remuneration, identified in the MBO scheme, is directly linked to the |
The following table summarizes the KPIs for the CEO and for the Group General Manager: |
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|---|---|---|---|---|---|---|
| encourage | achievement of performance | CEO KPIs | Group GM KPIs | |||
| management to | objectives, assigned to each | KPI | Weight | KPI | Weight | |
| pursue expected objectives by |
beneficiary in line with the role held. | Economic Financial KPIs |
70% | Economic Financial KPIs |
80% | |
| creating a strong correlation between |
For the beneficiaries of the MBO system, in addition to corporate objectives, indicators linked to the |
Group Operating Income |
35% | Group Operating Income |
40% | |
| remuneration and performance |
specific nature of the role covered and the areas of responsibility are provided. |
Group Net Revenues |
21% | Group Net Revenues |
24% | |
| achieved during the year. |
The MBO system is based on a circuit | Group Net Profit | 14% | Group Net Profit Strategic KPIs: - Implementation |
16% | |
| Short-term variable component (MBO) |
breaker, linked to the Group Operating Income result, which determines the activation of the system itself. If the Group Operating Income result is lower than 95% of the target result, no bonus will be paid out. |
Strategic KPI linked to the signing of M&A/Licensing transactions |
30% | of the "Recordati Group ESG roadmap" - Support and participation in the valuation of at least 2 Acquisition/ Licensing transactions or other significant transactions signed in 2021 |
20% | |
| the total fixed remuneration for the Chair and the CEO, and in % of the Annual Base Salary for the Group General Manager: CEO Group General Manager Chair: not included in the beneficiaries of the Plan. Key Management Personnel: maximum variable opportunity depending on the role held, between 42% and |
Threshold 48.5% 25% |
Target 83% 50% |
Maximum 117.5% 75% |
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| 50% of the fixed remuneration, with the exception of three cases where in one case the maximum opportunity can reach 62% and, in the other two cases, 75%. |
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| Long-term variable component (Stock Option) |
To promote the creation of value for Shareholders and Stakeholders by also fostering the loyalty and engagement of resources. |
2021-2023 Stock Option Plan The plan provides for the assignment to beneficiaries of the right to purchase a certain number of shares of the Company at a predetermined price (strike price or exercise price) at the end of a certain time period (vesting period) and upon achievement of the performance condition based on the Adjusted Net Income. There is, however, a cap to the maximum number of options available, equal to 10,400,000 |
Chair: not included in the beneficiaries of the Plans. CEO: Group General Manager: Key Management Personnel: |
• Stock Option Plan: number of options granted in line with the position held and based on best market practices. • Stock Option Plan: number of options granted in line with the position held and based on best market practices. • Stock Options Plan: number of options granted in line with the position held and based on best market practices. |
per individual.
To balance the fixed component aimed at remunerating the position held and the variable component, short and long term, aimed at ensuring a deep link between the remuneration of the Management, the performance of the Company and the creation of value for the Shareholders.
Pay Mix
In order to determine the pay mix, the following elements have been considered:
For the Key Management Personnel, the average values of the individual elements mentioned above have been considered.
| 37% | 31% | 32% |
|---|---|---|
| GROUP GENERAL MANAGER | ||
| 41% | 18% | 41% |
| RAL MANAGER | ||
| KEY MANAGEMENT PERSONNEL | ||
| 40% | 15% | 46% |
Long-term variable
Taking into account changes in legislation (introduced by the publication of the updated version of the Issuers' Regulations by Consob and the new Corporate Governance Code by Borsa Italiana), the voting results of the Shareholders' Meeting of 29th April 2020, the analyses performed on these votes and the main practices and recommendations of proxy advisors and institutional investors, as well as the relevant elements that Recordati intends to further strengthen in the context of a best practice orientation policy, the main new features introduced in the 2021 Report on Remuneration Policy and Remuneration Paid are summarised below:
The said new features are part of the continuous improvement process which is an integral part of Recordati's approach to remuneration.
Section I: 2021 Remuneration Policy Report
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Recordati attaches great importance to the annual analysis of the results of shareholders' meeting votes, as well as to the opinion of the main recipients and users of its Remuneration Policy, in order to ensure a constant improvement in adopting market best practices, taking into account some of the indications for improvement coming in particular from shareholders and proxy advisors.
The Annual General Shareholders' Meeting on 29th April 2020 voted in favour of Section I of the Report on the Remuneration Policy and the Remuneration Paid published in 2020. The chart below illustrates the result of the binding vote, which showed a 25% increase in the number of votes in favour compared to the previous Annual General Meeting.
The voting result of the Shareholders' Meeting of 29th April 2020 was analysed within the overall governance framework that characterises the Company's remuneration and incentive policies and schemes. The main reasons to the against votes mainly concerned the increase in bonus opportunities for the Chief Executive Officer and the Group General Manager, severance payments above market best practice for them, the absence of a cap on long-term variable remuneration and the vesting period of the 2018-2020 Stock Option Plan being less than 3 years for 25% of the options granted.
Further to this analysis process, Recordati has therefore implemented the activities necessary to ensure an improvement in the Remuneration Policy and in this Report, performing in-depth analyses of the indications received from Institutional Investors and Proxy Advisors at the last Shareholders' Meeting, with the objective of developing the considerations expressed by them with regard to the main areas of improvement in the Report on the Remuneration Policy and the Remuneration Paid.
These analyses were also aimed at identifying the changes necessary from 2021, also with reference to the requirements introduced by the recent amendments to the Issuers' Regulations, which took place with Resolution no. 21623 of 10th December 2020, and by the new Corporate Governance Code for listed Italian companies, effective from the first financial year beginning after 31st December 2020 and to which Recordati adheres. Furthermore, with this Report, Recordati guarantees greater transparency, an element which it considers to be fundamental for proper relations with its shareholders.
As the participation of institutional investors in European markets has increased, so has the influence of proxy
advisors on the decisions taken by investors themselves.
In this context, Recordati has increased the need to develop and ensure an on-going direct link with its institutional investors and proxy advisors and, therefore, at the beginning of 2021 an engagement plan was drawn up to define actions aimed at creating a direct channel of communication with the main users of Recordati's Report on the Remuneration Policy and the Remuneration Paid.
The definition of the engagement plan was carried out first of all by carrying out preliminary activities of analysis and segmentation of the institutional investors attending the 2020 Shareholders' Meeting, also taking into account the criteria relating to the share of capital held in the Company. For each of the institutional investors, the proxy advisors exercising a significant influence on the expression of the vote at the Shareholders' Meeting were also identified.
Recordati has therefore activated a channel of communication with its main proxy advisors, scheduling specific meetings with each of them in the first months of 2021. During those meetings feedback was collected on the new long-term incentive plan and on the other elements of Recordati's Remuneration Policy and improvement actions that could potentially be implemented were discussed.
These discussions, together with the analysis of the votes cast by shareholders, have provided Recordati's technical departments and the Remuneration and Nominations Committee with a valuable starting point for assessing the new features and improvements introduced in this text, in order to ensure ever-greater levels of disclosure and alignment of Recordati's remuneration policy with best market practice.
Below evidence is provided regarding the estimation of the pay mix for 2021 of the Chief Executive Officer, the Group General Manager and Key Management Personnel, i.e. the percentage breakdown of the individual remunerative components within the overall package in the case of target performance, assuming the approval of the 2021-2023 Stock Option Plan by the Shareholders' Meeting of 20th April 2021 and the assignment of the options by the Board of Directors during 2021.
7 In order to determine the pay mix, target performances in relation to the short-term incentive scheme and the fair value of the estimated options to be assigned in 2021 in relation to the new 2021-2023 Stock Option Plan, following approval by the Shareholders' Meeting and the Board of Directors, are considered. In fact, the 2021-2023 Stock Option Plan will be subject to the approval by the Shareholders' Meeting of 20th April 2021 and the assignment of options will be subject to the approval by an upcoming Board of Directors. For the Key Management Personnel, the average values of the individual elements of the remuneration package are considered.
of the remuneration process
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The definition of the Remuneration Policy for the members of Recordati's Board of Directors (hereinafter also referred to as the 'BoD') involves a number of individuals and corporate bodies in accordance with the provisions of the Company's By-Laws and current legislation. According to these regulatory and statutory provisions:
In accordance with Recordati's governance model, the Board of Directors is also responsible for defining the objectives and approving the company results referred to in the performance plans, to which the determination of the variable remuneration of the Chief Executive Officer and of the Group General Manager is linked, as well as defining the general criteria for the remuneration of other Key Management Personnel.
Finally, in line with the recommendations contained in the Corporate Governance Code, the Board of Directors is supported, with regard to remuneration issues, by a Remuneration and Nominations Committee composed of independent non-executive Directors with advisory and consultative functions on the matter.
The duties of the Shareholders' Meeting pursuant to law and the By-Laws, limited to the issues covered by this Report, are:
Recordati's Board of Directors currently in office consists of twelve members, eight of whom were appointed by the Shareholders' Meeting on 5th February 2019 and four of whom were appointed by the Shareholders' Meeting on 29th April 2020, following the resignation of three directors (who were appointed on 5 th February 2019) and the increase from eleven to twelve in the number of directors resolved by the same Shareholders' Meeting on 29th April 2020. The current Board of Directors is in office until the Shareholders' Meeting called to approve the financial statements for the year ended as at 31st December 2021. Four Directors are qualified as independent
The composition of the Board of Directors at the date of this Report and the qualifications of each Director at that date are summarised below:
| Alfredo Altavilla (Chair) |
Non-Executive |
|---|---|
| Guido Guidi (Vice-Chair) |
Non-Executive |
| Andrea Recordati (Chief Executive Officer) |
Executive |
| Francesco Balestrieri (Director) |
Non-Executive |
| Silvia Candini (Director) |
Non-Executive, Independent |
| Michaela Castelli (Director) |
Non-Executive, Independent |
| Giorgio De Palma (Director) |
Executive* |
| Joanna Le Couilliard (Director) |
Non-Executive, Independent |
| Giampiero Mazza (Director) |
Executive* |
| Giorgio Peluso (Director) |
Non-Executive, Independent |
| Cathrin Petty (Director) |
Executive* |
| Fritz Squindo (Director) |
Executive |
(*) Directors identified as Executive Directors in accordance with the definition of the Corporate Governance Code as they hold executive positions in the parent companies and/or companies of the CVC Group (including the positions held also at the Company).
The Board of Directors complies with the Remuneration Policy, which takes into account market conditions and practices for similar positions, when defining the remuneration of the Chair and the Chief Executive Officer and that of the other directors vested with special duties pursuant to article 2389, paragraph 3, of the Italian Civil Code and of non-executive directors.
Without prejudice to the powers of the Remuneration and Nominations Committee, the Board of Directors has the following responsibilities:
Moreover, the Board of Directors, supported by the Remuneration and Nominations Committee, monitors the
correct implementation of the Remuneration Policy.
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On 29th October 2020, the Board of Directors resolved to integrate the functions conferred on the Remuneration Committee - set up in 2001, in compliance with the recommendations of the Corporate Governance Code in force at the time - with the functions assigned by the new Corporate Governance Code to the Nominations Committee, and consequently to change the name of the Remuneration Committee to the Remuneration and Nominations Committee.
The Committee currently in office was appointed by the Board on 5th February 2019 (further to the Ordinary Shareholders' Meeting that appointed the new Board of Directors on the same date), and is entirely composed of non-executive, independent Directors with specific financial expertise:
| Ms. Joanna Le Couilliard | Ms. Silvia Candini | Ms. Michaela Castelli, lawyer |
|---|---|---|
| (Chair) | (Member) | (Member) |
The functions currently assigned to the Committee with regard to remunerations are as follows:
For information on the functions assigned to the Committee with regard to nominations, please refer to the Report on Corporate Governance and Ownership Structure.
The proceedings of meetings of the Remuneration and Nominations Committee are governed by the following organisational rules (contained in the Committee Regulations approved by the Board of Directors):
Committee meetings shall be chaired by the Committee Chair or, in the event of his/her absence or impediment, by the most senior member of the Committee in terms of length of service on the Board of Directors, or in the case of equality, the most senior by age;
The Chair, with the assistance of the Secretary, ensures that the information provided prior to the Committee's meeting and the additional information provided during the meetings are suitable to enable the members of the Committee to act in an informed manner in performing their role. Following the meeting, minutes shall be drawn up and the Chair shall make a report to the Board of Directors, at the first appropriate meeting, on the matters addressed and on remarks, recommendations and opinions made during the said meetings.
In performing its duties, the Remuneration and Nominations Committee has the right to access the Company and functions needed to perform its duties and also to make use of external consultants, under the terms and conditions laid down by the Board of Directors. The Committee shall have the right to ask for that adequate funds be made available to it to carry out its duties.
If the Committee intends to make use of the services of a consultant in order to acquire information on market practices regarding remuneration policies, the Committee shall first verify that the said consultant is not in situations that would compromise the independence of its judgement.
In order to limit the occurrence of conflicts of interest, in accordance with article 5, recommendation 26 of the Corporate Governance Code, no Director shall take part in the meetings of the Committee in which proposals relating to his or her own remuneration are formulated, except in the case of proposals concerning all the members of the Committees established within the Board of Directors.
The Remuneration and Nominations Committee meets periodically and as often as necessary to carry out its functions according to an annual calendar that typically follows the below activity cycle:
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It should be noted that, where provided for by internal regulations and corporate governance processes, specific remuneration and incentive issues are also discussed in the Risk, Control and CSR Committee, which formulates its opinion, making use, where deemed necessary, of the relevant internal functions.
In line with the relevant laws and regulations in force and with the recommendations of the Corporate Governance Code, the decision-making process leading to the implementation of the Remuneration Policy and the responsibility for its correct application takes place in the following phases in which many parties are involved:
Recordati regularly monitors market performance, including through the use of remuneration benchmarks which detect the practices adopted by the main market and industry players. In carrying out these analyses, Recordati made use of independent consultancy firms, which, through benchmarking remuneration surveys and reports on executive compensation and corporate governance, provided useful information in order to verify the competitiveness of the Company's remuneration offer.
In addition, the Company decided to avail itself of the support of the consultancy firm Willis Towers Watson also in relation to the preparation of this Report, as well as the third-party and independent assessment for the definition of the new long-term incentive plan (2021-2023 Stock Option Plan).
For the purposes of defining the Company's Remuneration Policy, the Human Resources Department prepares the guidelines. This function also acts as an internal technical support body for the Remuneration and Nominations Committee, for which it prepares the preparatory material for the Committee's activities. The Administration, Finance and Control Department assists in identifying and assessing the economic and financial objectives underlying the short and long-term incentive systems. The heads of the other company departments are also consulted in order to define the project objectives or objectives relating to specific issues regarding shortterm incentive systems.
The Remuneration Policy may, if necessary or appropriate, be updated by the Board of Directors, on the proposal of the Remuneration and Nominations Committee, which is responsible for periodically assessing, as better described below, its adequacy, overall consistency and effective application.
As provided for by Article 123-ter, paragraph 3-bis of the TUF (Testo Unico della Finanza) updated in 2019 and by Article 84-quater of the Issuers' Regulations updated in 2020, Recordati may temporarily derogate its remuneration policies in the presence of exceptional circumstances. Exceptional circumstances are defined as only situations in which a derogation of the remuneration policy is necessary in order to pursue the long-term interests and sustainability of the Company as a whole or to ensure its ability to stay in the market.
If the conditions are met, the Board of Directors, on the advice of the Remuneration and Nominations Committee as the Committee responsible for Related Party Transactions as provided for in the relevant Group Procedure, may temporarily derogate the remuneration policy in the circumstances identified above, limited to the following elements set out in Chapter 3 of Section I of this document:
Remuneration Policy
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The purposes pursued with the Remuneration Policy, which has a yearly duration, are to meet the objective of establishing a remuneration that meets the requirements to:
The Remuneration Policy is also defined in line with the strategy of the Company and of the Group.
Recordati's strategic vision is to continue with the profitable growth that the Company has been sustaining since the early nineties, focusing on both organic growth and development through strategic acquisitions in both the Rare Diseases business and in the Specialty and Primary Care business, with the objective of strengthening its presence in selected markets worldwide. In fact, over the last few decades, the Group has grown steadily, thanks to the success of its products and its growth model based on internalisation and diversification, implemented precisely through an acquisition strategy that is still underway. All of this takes place in a context of searching for new opportunities and continuous market evolution.
In addition, starting in 2018, the Company has also undertaken several initiatives in the field of sustainability. In fact, given the nature of the Company, sustainability is an integral part of the Group's strategy, aimed at bringing benefits not only to patients but also to all the stakeholders with whom the Company interacts, including shareholders, customers, scientific and business partners, collaborators and local communities.
To this end, each of the remuneration components offered to the Company's Management responds to a precise purpose for the pursuit of this strategic vision and, thanks to an adequate balance between fixed and variable components, contributes to the structuring of a remuneration package that, overall, ensures an effective alignment between Management remuneration and shareholders' interests, expressed primarily by the proportionality between the value of the variable components accrued and the results achieved, both in the short and long-term.
Below are the features of Recordati's Remuneration Policy, confirming its alignment to the interests of its shareholders:
| Remuneration component | Features and Purposes | |||
|---|---|---|---|---|
| Fixed remuneration | It includes all the fixed annual remuneration (i.e. gross annual salary from employment, remuneration for directors, remuneration for special positions). It is defined in such a way as to be adequately balanced with respect to the variable component and consistent with the Company's strategic objectives and risk management policy, also taking into account the characteristics of the industry in which the Company operates. |
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| MBO (Short-term variable incentive) |
It is commensurate with the role held, as well as on the nature of the impact on the Company's overall results in the short-term. It is linked to the achievement of annual, quantitative and/or qualitative performance objectives that are objectively measurable and consistent with the objectives set out in the Company's strategic plan and sustainability policy. It is designed to be reduced or increased in proportion to the level of performance generated with respect to the objectives assigned. |
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| LTI (Stock Option) |
It is commensurate with the role held, as well as on the nature of the impact on the Company's overall results in the long-term. It is linked to the primary objective of creating value for shareholders, consistent with the objectives of the strategic plan. |
The objectives of the variable incentive systems themselves have been identified to support the Company's strategy, as illustrated below:
These are the main objectives. Operating Income, Revenues and Net Profit are objectives that represent measures capable of summarizing Recordati's many businesses and thus to fully assess the Group's results.
The natural connection of the Stock Option plan with the value of the Recordati's share price determines a strong alignment between the interests of the Shareholders and those of the Top Management.
Among the objectives of the MBO system, the Acquisition/Licensing objective, assigned to the Chief Executive Officer and certain Key Management Personnel, supports the Group's acquisition strategy, which has always been a key element for the growth of the Company.
The 'Implementation of the Recordati Group ESG Roadmap' objective, assigned to the Group General Manager, among the objectives of the MBO system, supports the strategy on environmental, social and governance issues.
Recordati's Remuneration Policy is also consistent for all employees. In fact, the Company monitors the remuneration and working conditions of its employees annually. The definition of transparent remuneration policies and based on merit, the training activities designed to develop new skills, the offer of additional benefits and the provision of a welfare plan for all employees are fundamental in this respect.
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As part of the 'Sustainability Roadmap', in 2020 Recordati has formalized the first Group Sustainability Plan, a fundamental tool for sharing with stakeholders the Company's path in developing and implementing ESG projects.
The Plan focuses on four priority areas: patient care, people care, environmental protection, responsible sourcing. At the base of these strategic areas of sustainability is a fifth fundamental pillar: ethics and integrity. Such principles guide the Group's daily operations in a transdisciplinary manner.
The Plan provides for periodic monitoring and updating, in order to report on the status of project implementation and to set new future objectives in the field of sustainability.
The Sustainability Plan has been defined in coherence with the new Recordati Group's Materiality Matrix. In fact, in 2020 the Group updated the analysis of the material topics to identify the ESG factors, i.e. those of an environmental, social and good governance nature, on which to focus the Company's strategies and actions. The update included both stakeholder engagement, through an online survey, and management involvement, through 'one-to-one' interviews and online surveys.
More information on Recordati's Sustainability Plan are available in the 2020 Consolidated Non-Financial Statement published on the Company's website.
Recordati's Remuneration Policy is closely linked to its Sustainability Plan. In fact, the 'Implementation of the Recordati Group ESG Roadmap' objective, assigned to the Group General Manager, as well as the attribution of ESG objectives to two Key Management Personnel members (of which in one case among the objectives of the MBO system), supports the strategy with regard to environmental, social and governance issues, focusing the attention of the top management on the achievement of all the milestones in the roadmap. ESG objectives are also assigned to other Group managers as part of the MBO system objectives.
The principles and criteria underlying the Remuneration Policy are as follows:
characteristics and the industry in which it operates, providing that the variable component represents in any case a significant part of the overall remuneration;
In implementing the aforementioned principles, it should be noted that:
There are also a severance indemnity and a termination indemnity for the Chief Executive Officer, as well as a severance indemnity for the Group General Manager and another Key Manager.
This section highlights the main features of the remuneration policy for the members of the Board of Directors and of the Board of Statutory Auditors.
Recordati's Board of Directors is composed of Executive and Non-Executive Directors. With reference to the former, indication is provided in the following paragraphs.
With regard to Non-Executive Directors, for which article 5 of the Corporate Governance Code provides that the remuneration shall not be – other than for an insignificant portion – linked to the financial performance objectives achieved by the Company, Recordati has established a single fixed annual remuneration, thus fully falling within the provisions of the article. For the 2019-2021 term of office, this remuneration was determined by the Shareholders' Meeting of 5th February 2019, on the basis of the proposal made by the reference shareholder, and subsequently confirmed by the Shareholders' Meeting of 29th April 2020 for the new directors appointed by the latter, and is equal to:
Remuneration pursuant to article 2389, paragraph 1, of the Italian Civil Code € 60,000 These Directors are also entitled to reimbursement of expenses incurred in the performance of their duties as well as third party liability insurance coverage.
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The Board of Directors has set up an internal Remuneration and Nominations Committee and a Risk, Control and CSR Committee, both of which have proposal and advisory functions and consist solely of independent Directors.
For the 2019-2021 term of office, the annual remuneration of the Directors for participation in the Board Committees was determined by the Board of Directors on 11 th February 2019, following the consultation of the Board of Statutory Auditors, and is made up as follows:
| Remuneration and Nominations Committee | Risk, Control and CSR Committee | ||
|---|---|---|---|
| Chair | € 15,000 | Chair | € 20,000 |
| Member | € 10,000 | Member | € 10,000 |
The annual remuneration of the Members of the Board of Statutory Auditors consists of only the fixed component, commensurate with the commitment required for each of them. The remuneration of the current Board of Statutory Auditors, appointed at the Annual General Meeting of 29th April 2020 and in office until the Shareholders' Meeting called to approve the 2022 Financial Statements, was determined by the same Annual General Meeting, on the basis of the proposal made by Fimei S.p.a., following a recommendation by the Board of Directors based on the benchmarking analysis conducted by Willis Towers Watson on the remuneration practices in industrial and services companies belonging to FTSE MIB Italia index, and is equal to:
| Board of Statutory Auditors | ||||
|---|---|---|---|---|
| Chair | € 62,000 | |||
| Statutory Auditor | € 45,000 |
For the 2019-2021 term of office, the total remuneration for the position as Chair of the Board of Directors consists exclusively of the fixed component.
The annual remuneration of the Chair of the Board of Directors, in office until the Shareholders' Meeting called to approve the Financial Statements as at 31st December 2021, was set by the Board of Directors on 7 th May 2020 and is equal to:
| Chair of the Board of Directors | |
|---|---|
| Remuneration pursuant to article 2389, paragraph 1, of the Italian Civil Code |
€ 60,000 |
| Remuneration for special positions pursuant to article 2389, paragraph 3, of the Italian Civil Code |
€ 180,000 |
| Total Remuneration | € 240,000 |
The Remuneration Policy for Recordati's Chief Executive Officer and the Group General Manager as executive Directors is defined in accordance with the specific powers granted to the role, the purposes on which the Company's Remuneration Policy is based, as well as the remuneration levels and best market practices.
With respect to the other Executive Directors, defined as such in accordance with the provisions of the Code, namely, at the date of this report,
it is stressed that the Shareholders' Meeting of 5th February 2019 and, as for Mr. Giorgio De Palma, the Shareholders' Meeting of 29th April 2020, on the basis of the proposal made by the shareholder FIMEI S.p.A., did not resolve upon any remuneration pursuant to article 2389, paragraph 1, of the Italian Civil Code, in favour of these persons (without prejudice to the right of reimbursement of expenses incurred in the performance of their duties) as they had previously declared that they did not wish to receive any remuneration. Therefore, the details of only the two aforementioned positions are shown below.
The overall remuneration of the Chief Executive Officer and of the Group General Manager is structured into a fixed component, a short-term variable component and a long-term variable component, identified as follows:
During 2020, Recordati performed a benchmark analysis to verify that the remuneration packages of the Chair of the Board of Directors, the Chief Executive Officer and the Group General Manager were aligned to best market practices.
For the Chair of the Board, the assessment of remuneration positioning was carried out with reference to the role of non-executive Chair of Italian listed companies in the industrial sector. For the purposes of identifying the reference cluster for Recordati, companies comparable to Recordati in terms of market capitalization and shareholder structure were considered.
For the Chief Executive Officer, the assessment of remuneration positioning was carried out in comparison with the remuneration value of Chief Executive Officers of both Italian and European companies, as illustrated below. The remuneration comparison was performed with the support of the consulting firm Willis Towers Watson.
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The peer group identified is characterised by Italian companies belonging to the FTSE MIB Italia index, comparable to Recordati in terms of market capitalisation at 31st December 2019.
| Peer group – Italian companies | ||||
|---|---|---|---|---|
| Amplifon | Pirelli & C. | |||
| Atlantia | Prysmian | |||
| Campari | Saipem | |||
| DiaSorin | Snam | |||
| Interpump Group | Telecom Italia | |||
| Italgas | Terna | |||
| Leonardo |
The peer group identified is characterised by Italian and European companies operating in the pharmaceutical sector, both listed in the STOXX Europe TMI Pharmaceuticals index and unlisted.
| AstraZeneca | Ipsen | |||
|---|---|---|---|---|
| Bayer | Merck | |||
| Chiesi Farmaceutici | Novartis | |||
| Dechra Pharmaceuticals | Recipharm | |||
| DiaSorin | Roche | |||
| GlaxoSmithKline | Sanofi | |||
| Grifols | UCB | |||
| Hikma Pharmaceuticals | Zambon | |||
| Indivior |
For the Group General Manager, the assessment of remuneration positioning was carried out with reference to roles of the same level of responsibility and managerial complexity compared to Italian and European companies in the industrial sector. The databases used for the comparison are the 'Top Executive Survey - Europe' and 'Top Executive Survey - Italy' studies conducted annually by Willis Towers Watson.
The fixed component of the remuneration of the Chief Executive Officer and of the Group General Manager is commensurate with the duties and responsibilities assigned. Moreover, in line with the Corporate Governance Code, this component is determined in such a way as to be adequately balanced with respect to the variable component and consistent with the company's strategic objectives and risk management policy, also taking into account the characteristics of the industry in which the Company operates. However, the variable component is expected to represent a significant part of the total remuneration.
Below are the elements that make up the fixed remuneration of the Chief Executive Officer and of the Group General Manager:
| Chief Executive Officer | Group General Manager | |||
|---|---|---|---|---|
| Remuneration pursuant to article 2389, paragraph 1, of the Italian Civil Code |
€ 60,000 | Remuneration pursuant to article 2389, paragraph 1, of the Italian Civil Code |
€ 60,000 | |
| Remuneration for special positions pursuant to article 2389, paragraph 3, of the Italian Civil Code |
€ 1,140,000 | Gross Annual Remuneration | € 450,000 | |
| Total Remuneration | € 1,200,000 | Total Remuneration | € 510,000 |
Overall, therefore, for the 2019-2021 term of office, the Chief Executive Officer is paid a fixed annual component of € 1,200,000, while the Group General Manager is paid a fixed annual component of € 510,000.
The short-term variable component of the remuneration package for the Chief Executive Officer and the Group General Manager is linked to an incentive scheme by objectives (MBO, Management by Objectives). On the basis of this scheme, a bonus is paid in cash on the achievement of the annual results defined by the Board of Directors, on the proposal of the Remuneration and Nominations Committee, and measured according to preestablished management parameters and weights.
Specifically, the MBO system provides for the assignment to each beneficiary of economic-financial objectives (Group Operating Income, Group Net Revenues and Group Net Profit) and individual strategic objectives. There is also a 'circuit breaker' identified in the Group's Operating Income indicator, which if not achieved will result in the zeroing of the entire bonus.
Through the inclusion among the individual objectives of each beneficiary of an important Group objective such as the Operating Income, Recordati's MBO system tends not so much to reward individual performance in itself, but rather individual performance in a context of operating results such as to allow the payment of bonuses, in line therefore with the principle of aligning the interests of Management and Shareholders and with a view to pursuing the Company's long-term interests.
The following tables show the performance objectives defined for 2021 for the Chief Executive Officer and for the Group General Manager:
| CIRCUIT BREAKER | ON/OFF CONDITION | |
|---|---|---|
| Group Operating Income | Activation of the scheme only if at least 95% of the budget objective is achieved |
|
| OBJECTIVES | FEATURES | |
| ECONOMIC AND FINANCIAL OBJECTIVES (70%) set excluding new M&A/licensing transactions related to products already on the market, performed during the reference financial year |
Threshold: 38.5% of the Fixed Remuneration Target: 63% of the Fixed Remuneration Maximum: 87.5% of the Fixed Remuneration |
|
| 1. Group Operating Income (35%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +3% Maximum: budget +6% |
| 2. Group Net Revenues (21%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +1.5% Maximum: budget +3% |
|---|---|
| 3. Group Net Profit (14%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +3% Maximum: budget +6% |
| STRATEGIC OBJECTIVES (30%) | Threshold: 10% of the Fixed Remuneration Target: 20% of the Fixed Remuneration Maximum: 30% of the Fixed Remuneration |
| 1. Acquisition/Licensing |
The objective is linked to the signing of M&A/Licensing transactions. The result is measured in relation to value in € Mil current/peak sales achieved. Three different performance levels are provided. |
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| CIRCUIT BREAKER | ON/OFF CONDITION | |
|---|---|---|
| Group Operating Income | Activation of the scheme only if at least 95% of the budget objective is achieved |
|
| OBJECTIVES | FEATURES | |
| ECONOMIC AND FINANCIAL OBJECTIVES (80%) set excluding new M&A/licensing transactions related to products already on the market, performed during the reference financial year |
Threshold: 20% of the Annual Base Salary Target: 40% of the Annual Base Salary Maximum: 60% of the Annual Base Salary |
|
| 1. Group Operating Income (40%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget + 3% Maximum: budget + 6% |
|
| 2. Group Net Revenues (24%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +1.5% Maximum: budget +3% |
|
| 3. Group Net Profit (16%) |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +3% Maximum: budget +6% |
|
| STRATEGIC OBJECTIVES (20%) | Threshold: 5% of the Annual Base Salary Target: 10% of the Annual Base Salary Maximum: 15% of the Annual Base Salary |
|
| 1. Implementation of the 'Recordati Group ESG Roadmap' 2. Support and participation in the evaluation of at least 2 Acquisition/Licensing transactions or other significant transactions signed in 2021 |
The objectives are strategic. The result of each objective is measured in relation to the assessment attributed on the basis of 3 different performance assessments: Achieved, Overachieved, Outstanding). |
The Company reserves the right not to provide the annual value of the parameters as it considers this information to be sensitive. More detailed information regarding the level of achievement of the objectives will only be communicated at the end of the performance period.
The right to payment of the bonus accruals upon approval by the Board of Directors of the consolidated financial statements, which show that at least 95% of the Group Operating Income objective that was set when the objective was determined has been achieved. The payment of the bonus is made during the financial year in which the aforementioned consolidated financial statements are approved.
The amount of the incentive actually paid varies according to the level of achievement of the targets assigned to the individual objectives. The following charts illustrate the bonus opportunities awarded to the Chief Executive Officer and the Group General Manager according to their financial objectives (Group Operating Income, Group Net Revenues and Group Net Profit):
For the Chief Executive Officer, the remaining 30% of the bonus is calculated on the basis of the Acquisition/Licensing objective, whose incentive curve is illustrated in the following chart:
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In the event of failure to achieve 95% of the Group Operating Income objective, nothing is due. In the event of over-performance, it is not possible to obtain a bonus higher than the maximum one set, which for the Chief Executive Officer is equal to 117.5% of his fixed remuneration, while for the Group General Manager it is equal to 75% of his Annual Base Salary.
The following table summarizes the potential bonus payouts for the Chief Executive Officer and for the Group General Manager according to the different performance levels:
| CEO | Group General Manager | |
|---|---|---|
| Threshold | 582,000 € | 112,500 € |
| Target | 996,000 € | 225,000 € |
| Maximum | 1,410,000 € | 337,500 € |
The short-term variable component to be paid to the Chief Executive Officer is equal to € 1,410,000 gross per year if the maximum overall performance is achieved, while for the Group General Manager it is equal to € 337,500.
In setting the MBO objectives of the Chief Executive Officer and the Group General Manager, the Board of Directors may, subject to the opinion of the Remuneration and Nominations Committee, assess the achievement of such objectives net of significant extraordinary items, where appropriate, on an equitable basis.
At present, there is no need to defer the payment of this bonus with respect to the time when the right to receive it is acquired, because it is part of a scheme that is already significantly challenging and which, with a view to continuity, favours the setting of the same objectives for each financial year; moreover, the circuit breaker of the scheme and its main objective, represented by the Group Operating Income, is a target that all the above persons contribute to achieving, without the individual person being able to influence this achievement exclusively. Finally, it should be noted that the deferral of part of the variable remuneration is in any case ensured by the long-term incentive scheme based on the assignment of Stock Options, as described below.
Without prejudice to the right to compensation for any further damages, the Company reserves the right, within 5 years from the payment and regardless of whether the relationship is still ongoing or terminated, to request the Chief Executive Officer and the Group General Manager to refund the bonus already paid (the so-called 'clawback'), if one of the following cases occurs:
A significant component of the variable remuneration of Recordati's Chief Executive Officer and Group General Manager is oriented towards a long-term horizon in order to strengthen the interests of sustainable creation of value for Shareholders and Stakeholders and is based on the assignment of Stock Options.
The Recordati Group, as in previous years, deems that this scheme ensures the full and constant alignment between the interests of Top Management and that of Shareholders, as it is naturally linked to the growth in value of the Recordati share.
During 2020, the Company deemed it appropriate to renew the features of the previously existing stock option plan and defined the new 2021-2023 Stock Option Plan, which will be submitted for approval by the Shareholders' Meeting of 20th April 2021.
It should also be noted that the 2014-2018 Stock Option Plan and the 2018-2022 Stock Plan, approved by the Shareholders' Meeting on 17th April 2014 and on 18th April 2018 respectively (and subsequently amended on 11th April 2019) continue to regulate the tranches of options granted based on those plans.
Such new plan provides for the grant to the beneficiaries of the right to purchase a certain number of the Company's shares at a predetermined price (strike price or exercise price), after a certain period of time (vesting period) has elapsed, once the condition for the achievement of the performance objective indicated below has been met, a right to be exercised within a certain period of time (the end of the eighth financial year following the grant of the options).
The grant of options under the 2021-2023 Stock Option Plan occurs on annual basis (the so-called 'rolling approach') and takes place in three cycles with grants in 2021, 2022 and 2023. The number of options granted to each beneficiary is linked to the importance of the organisational role held by the various top positions. There is, however, a cap to the maximum number of options available, equal to 10,400,000 options in total and 400,000 options per individual. The Executive Directors include the Company's Chief Executive Officer and the Group General Manager as beneficiaries.
The exercise price of each new grant is established by using the fair market value calculation (the arithmetic average of the Company's share prices quoted on the market in the period running from the date of grant of the options and the same day of the previous calendar month).
Options granted to beneficiaries vest no less than 3 years after the grant date (so-called 'vesting period').
An essential condition for the exercise of each of the options granted is the achievement of a performance objective, which is based on the Adjusted Net Income cumulated over the three-year reference period. The existence of a performance clause in the 2021-2023 Stock Option Plan is also in line with the principle of consistency of the Remuneration Policy with the pursuit of the interests of the Company and its Shareholders to which the interests of management must be aligned.
The vested options may be exercised at any time during each financial year, provided that they must be exercised no later than the end of the eighth financial year following the financial year in which they were granted.
The beneficiaries will be entitled to exercise the options granted to them earlier than the relevant vesting date, upon the occurrence of a change of control of the Company resulting in the delisting of the Company's ordinary shares from a regulated market.
The Plan also requires beneficiaries who are members of Recordati's top management to continuously hold a number of shares - equal to 50% of the shares resulting after the sale of the shares necessary to cover the payment of the exercise price and the tax, social security and welfare charges connected with the exercise of the options - until the end of the 24th month following the relevant vesting date.
The following is a timeline of the 2021-2023 Stock Option Plan for the first allocation cycle:
Without prejudice to the right to compensation for any further damages, the Company reserves the right (socalled 'clawback'), within 5 years from the vesting date and regardless of whether the relationship is still in existence or terminated, to obtain from the beneficiary to revoke the exercisable options or to return the shares held by the beneficiary (less a number of shares of a value corresponding to the exercise price of the options and the tax, social security and welfare contributions connected with the exercise of the options, possibly also by offsetting them against the remuneration and/or severance indemnity of the beneficiary) if the shares of the beneficiary have already been sold, should any of the following cases occur:
For further information on the Plans, please refer to the information documents published in the Corporate Governance section of the Company's website:
https://www.recordati.com/en/corporate_governance/remuneration/stock_option_plans/.
Key Management Personnel are those persons who have the power and responsibility, directly or indirectly, for planning, management and control of the Company's activities. At the date of this Report, the following persons are Key Management Personnel:
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Alberto Martinez – Executive VP Specialty and Primary Care Business Unit.
In defining the Remuneration Policy for Key Management Personnel, it was taken into account that these are recipients of a Policy in which a part of the remuneration is linked to the achievement of specific performance objectives, non-financial objectives, predetermined, measurable and linked in significant part to a long-term horizon. They are consistent with the Company's strategic objectives and are aimed at promoting its sustainable success (Article 5, Recommendation 27 of the Corporate Governance Code).
The managerial employment relationship of Key Management Personnel in Italy is governed by the applicable National Collective Bargaining Agreement (CCNL) of companies producing goods and services in force. For other Key Management Personnel employed by the Group's foreign subsidiaries, the employment relationship is governed by the applicable local regulations and, where applicable, by the collective bargaining agreements provided where the subsidiary is located. In Italy the general treatments provided for Executives are applicable to Key Management Personnel in addition to those listed below.
The total remuneration of Key Management Personnel is structured into a fixed remuneration and a short and a long-term variable remuneration, identified as follows:
The fixed component of the remuneration of the Key Management Personnel, the Gross Annual Remuneration (Retribuzione Annua Lorda - RAL), i.e. the contractually guaranteed annual remuneration, is monitored for all the top positions by the industry remuneration surveys and its value is positioned, in order to meet adequate retention and remuneration criteria, at a competitive level with respect to the market.
Changes over time in the fixed component of remuneration are implemented on the basis of growth rules that take into account the role, the level of performance over time and the pay gap with respect to the remuneration levels of the reference market.
Recordati's Key Management Personnel are beneficiaries of the same short-term incentive scheme (MBO, Management by Objectives) assigned to the Chief Executive Officer and the Group General Manager. Therefore, what has been described above is intended to be fully referred to herein, with the exception of the performance objectives assigned and the bonus opportunities of the beneficiaries.
The following table shows the type of objectives assigned to the Key Management Personnel:
| CIRCUIT BREAKER | ON/OFF CONDITION |
|---|---|
| Group Operating Income | Activation of the scheme only if at least 95% of the budget objective is achieved |
All Key Management Personnel have the following Group objectives:
| OBJECTIVES | FEATURES | |
|---|---|---|
| ECONOMIC AND FINANCIAL OBJECTIVE | Set excluding new M&A/licensing transactions related to products already on the market, performed during the reference financial year |
|
| Group Operating Income | The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +3% Maximum: budget +6% |
The Key Management Personnel are also assigned, depending on the position held, other economic and financial objectives (set excluding M&A/licensing transactions related to products already on the market, performed during the reference financial year), and/or qualitative objectives, with different weights:
| OBJECTIVES | FEATURES | |
|---|---|---|
| Net Revenues of Business Unit/Division | The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +1.5% Maximum: budget +3% |
|
| Group Operating Income of Business Unit/Division |
The result is measured in relation to the predefined budget. The following performance levels are provided: Threshold: budget Target: budget +3% Maximum: budget +6% |
|
| Management Objectives | There are two objectives linked to specific responsibility areas measured on a performance scale that provides for a Threshold, an intermediate and a maximum level which corresponds a predefined portion of the bonus, or, in some cases, on/off objectives. |
The Company reserves the right not to provide the annual value of the parameters as it considers this information to be sensitive.
More detailed information regarding the level of achievement of the objectives will only be communicated at the end of the performance period.
As mentioned in section 3.1.1, one Key Management Personnel member is also assigned ESG objectives in the area of 'Climate Action'.
In the event of over-performance, it is not possible to achieve a bonus higher than the maximum set, which, for Key Management Personnel, can vary from 42% to 50% of the annual base salary depending on the position held with the exception of three cases where in one case the maximum opportunity can reach 62% and, in the other two cases, 75% of the annual base salary.
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A component of the variable remuneration of Recordati's Key Management Personnel is oriented towards a longterm horizon in order to strengthen the interests of sustainable creation of value for Shareholders and Stakeholders.
Recordati's Key Management Personnel are beneficiaries of the same long-term incentive scheme (LTI) as that envisaged for the Chief Executive Officer and the Group General Manager, i.e. the 2021-2023 Stock Option Plan, when approved by the Shareholders' Meeting of 20th April 2021, and, upon exhaustion, the 2014-2018 Stock Option Plan and the 2018-2022 Plan. Therefore, the contents of the preceding paragraphs are to be considered referred to here in full.
Recordati's Remuneration Policy provides for the possibility of paying a bonus linked to the achievement of significant results for the Group in the case of significant business development transactions (M&A/Licensing). This provision is linked to the strategic importance of such transactions as a growth mechanism for the Recordati Group, as well as an instrument to ensure the Group's continued success in the Specialty & Primary Care and Rare Diseases areas. The proven ability to achieve significant growth through external operations will continue to support the Recordati Group in identifying new partners and in implementing new acquisition or licensing agreements. Therefore, M&A/licensing transactions represent fundamental activities so as to enable the Company to offer an increasingly richer product portfolio, an increasingly wider geographical coverage and consequently ensure the sustainability of the business in the long-term. In addition, it should be noted that in the new MBO scheme, financial targets are set on a constant perimeter, i.e. excluding M&A/licensing transactions related to products already on the market, performed during the reference financial year. It is therefore important to provide for an additional bonus scheme to reward the Top Management's activities in relation to such strategically significant transactions for the Group. It should be noted that the beneficiaries of any Transaction Bonus and Integration Bonus do not include the Chief Executive Officer and the Group General Manager, since the implementation of this type of transactions is already provided for at the short-term incentive scheme level.
In order to provide an incentive to other Key Management Personnel of the Company to carry out strategic M&A/licensing transactions, the following may be awarded:
the bonus awarded may vary between 15% and 30% of the Gross Annual Remuneration. 70% of the bonus will be paid at the time when predefined milestones have been reached in the integration plan, and 30% at the end of the integration plan and subject to the achievement of predefined integration objectives.
It should be noted that Transaction Bonuses and Integration Bonuses may also be awarded to other managers who, although not qualifying as Key Management Personnel, are directly involved and have a significant impact on the success, respectively, of an M&A/Licensing transaction, or of the integration process following an M&A transaction.
The Remuneration Policy does not provide for particular non-monetary benefits other than those that can be defined as standard for top positions (e.g. company car).
The Remuneration Policy does not provide for severance indemnities for non-executive Directors.
With regard to other Key Management Personnel, including executive Directors (excluding the Executive Directors qualified as such by the Board pursuant to the Corporate Governance Code, who, as noted above, have previously declared that they do not wish to receive any remuneration), if deemed appropriate in the best interests of the Company and in relation to the importance of the Manager's position within the company organisation, agreements may be entered into which involve the payment of special indemnities, in any case not exceeding 24 months of the fixed remuneration and the short-term variable remuneration calculated as the average of the annual bonuses paid in the 36 months previous to the date of termination of the employment relationship (without prejudice to the provisions of the applicable National Collective Agreement), except for what provided for Mr. Andrea Recordati and Mr. Fritz Squindo, in the event that the Company terminates the employment relationship for reasons other than just cause, also with reference to the market practices in force at the time; taking these practices into account, there is generally no provision for links between such treatments and the Company's performance. In particular, agreements have been entered into that provide for termination indemnities for the Chief Executive Officer, in addition to an agreement providing for a severance indemnity for the Group General Manager and for another Key Management Person. In all other cases, in the event of early termination of the employment relationship for reasons other than just cause, Key Management Personnel will be paid the indemnities provided for, in Italy, by law and the current National Collective Bargaining Agreement for 'Executives of Companies Producing Goods and Services' (so-called Industrial Companies) or for employees of foreign subsidiaries, by locally applicable regulations/collective bargaining agreements, in certain cases in addition to a further amount, determined on an equitable basis.
In the event of termination from office and/or termination of the relationship with an executive Director or a General Manager, as a result of internal processes leading to the granting or payment of indemnities and/or other benefits, the Company will disclose detailed information on the matter to the market.
On 11th February 2019 - in the context of the change of control of the Company, after having approved the signing of the mutual termination agreement, with effect from the same date, of the employment relationship existing between the Company itself and Mr Andrea Recordati, remaining therefore between the Company and Mr Andrea Recordati only the relationship as a member of the governing body - the Board of Directors, having heard the favourable opinion of the Remuneration Committee, as part of the determination of the remuneration of Mr Andrea Recordati as Chief Executive Officer, resolved to grant to Mr Andrea Recordati: (i) an amount equal to 7.4% of the overall remuneration – composed of the overall gross fixed annual remuneration8 and of the shortterm variable remuneration based on the M.B.O. system, the 'Overall Remuneration' – received for each year of term of office as Chief Executive Officer, gross of any tax or social contribution, as severance indemnity (trattamento di fine mandato); and (ii) an exit indemnity in case of termination of the office (indennità di fine carica) in case of revocation, without just cause, before the expiry of the term of the office, resignation from the office and termination of office for expiration of the term, pursuant to the terms described below. In case of revocation, without just cause, before the expiry of the term of his office (namely, before the date of the Shareholders' Meeting convened for the approval of the financial statements relating to the 2021 financial year), Mr Andrea Recordati or his heirs will be entitled to an amount pursuant to Article 2383, paragraph 3, of the Italian Civil Code, inclusive of any greater damage and any other claims related thereto, equal to the Overall Remuneration received in the twelve months preceding the termination of his office (or an amount equal to EUR
8 Note that the overall gross fixed annual remuneration of the Chief Executive Officer is equal to EUR 1,200,000, of which EUR 1,140,000 is granted as gross fixed annual remuneration pursuant to Article 2389, paragraph 3 of the Italian Civil Code and EUR 60,000 is granted as gross annual 'basic' remuneration as a director of Recordati.
2,400,000.00 should the revocation occur in the first twelve months of his office as director) multiplied by 3 (the 'Revocation Case'). Should Mr Andrea Recordati resign from his office for a reason that does not allow the continuation, even temporarily, of his relationship with the Company, as well as in the event that the resignation is necessary following a revocation or modification of the powers granted to him, Mr Andrea Recordati or his heirs will be entitled to an overall amount, inclusive of any other claims related thereto, equal to the Overall Remuneration received in the twelve months preceding the termination of his office (or an amount equal to EUR 2,400,000.00 if the revocation occurs in the first twelve months of his office as director) multiplied by 3 (the 'Resignation Case'). Finally, upon termination of office for expiration of the term, with the exclusions set out below, Mr Andrea Recordati or his heirs will receive, as additional remuneration for the expiration of his mandate, inclusive of any other claims related thereto, an amount equal to the Overall Remuneration received by Mr Andrea Recordati in the twelve months prior to termination of his office, multiplied by 3 (the 'Additional Remuneration'). The Additional Remuneration will not be granted to Mr Andrea Recordati in the following cases: (i) if the mandate of Mr Andrea Recordati is renewed or extended for further 3 financial years (A) on economic terms and conditions that are not less favourable than the actual one, (B) with the same powers delegated during the first term and (C) with the provision that, if a Revocation Case or a Resignation Case occurs during the second mandate, Mr Andrea Recordati or his heirs will receive an amount equal the Overall Remuneration received during the twelve months preceding the termination of the mandate, multiplied by 3; (ii) if the nonrenewal or non-extension of the mandate is in any case due to the choice of Mr Andrea Recordati; and (iii) in the event of early termination of the mandate in a Revocation Case or in a Resignation Case.
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In 2014, a supplementary agreement to the permanent executive employment contract between the Company and Mr. Fritz Squindo (the 'Supplementary Agreement') was signed with a favourable opinion from the Remuneration Committee. This agreement provides for the payment to this Manager of an indemnity equal to his gross remuneration (inclusive of variable remuneration, premiums and bonuses) received in the 60 months prior to the date of the termination of the employment relationship, in the event of termination of the employment relationship by the Company, except for the case of dismissal for 'just cause' and termination of the contract by the manager in application of the provisions of the National Collective Bargaining Agreement for managers of companies that produce goods and services (hereinafter, 'Managers' CCNL') in the following cases: transfer of the ownership of the company, inclusive of cases of concentrations, mergers, demergers; transfer of the manager to another place of work; committal to trial of the Manager for facts relating to the duties assigned to him, and change of job role. The indemnity shall replace and fully cover any indemnities determined in application of the aforementioned Managers' CCNL in the cases mentioned above. With regard to incentive schemes based on financial instruments, the Company agrees to act in such a way that the Manager maintains the right to exercise the option rights granted, once they have matured, under the terms and conditions provided for under the aforementioned plans for the beneficiaries in general.
On 11th February 2019, upon resolution of the Board of Directors on the same date, having heard the favourable opinion of the Remuneration Committee, in the context of the change of control of the Company, a further agreement was signed between the Company and Mr. Fritz Squindo, replacing the Supplementary Agreement, pursuant to which the indemnity provided for by the Supplementary Agreement will continue to be due to Mr. Fritz Squindo in the cases of termination of the employment relationship described above, as well as in the following cases: (i) withdrawal by Mr. Fritz Squindo from the employment relationship, other than in the circumstances considered by the Managers' CCNL, provided that in the 12 months following the termination, Mr. Fritz Squindo does not cooperate (as director, employee or consultant) with competitors of the Recordati Group, unless the Company exempts Mr Fritz Squindo from such obligation; (ii) termination of the employment agreement due to death, disability, illness, incapacity or retirement of Mr. Fritz Squindo; (iii) termination of the employment relationship due to mutual agreement of the Company and Mr. Fritz Squindo. The notice period is that provided for by the Managers' CCNL.
Furthermore, with respect to another member of key manager personnel, prior to signing a permanent employment contract, a supplementary agreement to the contract subsequently entered into was signed, which provides for the payment to the senior manager of a 'golden handshake' remuneration of 36 month's salary consisting of the monthly payments provided for the indemnity in lieu of notice and the treatment provided for by art. 19 of the Managers' CCNL in the event of termination of employment contract by the Company, except for termination for 'just cause'. The senior manager shall have the right to that remuneration until the moment when there will be three years to obtaining the right to a pension, after which time the remuneration will diminish by one month for each month of employment. The notice period is that provided for by the Managers' CCNL.
There are no agreements which involve the assignment or maintenance of non-monetary benefits or the stipulation of special consultancy contracts in the event of the termination of an employment relationship. There are no agreements which involve remuneration for non-competition commitments on termination of an employment relationship or end of office.
As concerns the effects of the end of an employment relationship/other relationship equivalent to an employment relationship or an administrative relationship on existing incentive plans based on current financial instruments approved by Recordati S.p.A., in accordance with Article 114-bis of TUF (Testo Unico della Finanza), it should be noted that, without prejudice to the foregoing for Mr. Fritz Squindo, the 2014-2018 Stock Option Plan approved by the Shareholders' Meeting of 17th April 2014, the 2018-2022 Stock Option Plan approved by the Shareholders'
Meeting of 18th April 2018, (amended by 'Shareholders' Meeting of 11th April 2019), as well as the Stock Option Plan submitted for approval by the Shareholders' Meeting of 20th April 2021, provide, in summary, the following: unless otherwise determined by the Board, having heard the opinion of the Remuneration and Nominations Committee, with reference to the executive directors, or the Chairman of the Committee, for the other beneficiaries, the termination, as the case may be, of the administrative relationship or of the employment relationship/other relationship equivalent to an employment relationship of the participant in the Plan ( the "Participant") for any reason (the "Termination of the Relationship"), shall result in the automatic exclusion of the Participant from the Plan and in the definitive, irreversible loss of effectiveness, for the Options already granted and not yet vested at the date of Termination of the Relationship.
Without prejudice to the previous paragraph, if on the date of the Termination of Relationship, the Participant holds Options in relation to one or more tranches that have already vested, but which have not yet been exercised, that Participant may exercise these Options in relation to those tranches that have already vested within 30 days of the date of the Termination of Relationship, while those Options lose all validity if they are not exercised within that period; nevertheless, if the Termination of the Relationship is due to the retirement of the Participant, the latter may, unless decided otherwise by the Remuneration and Nominations Committee or by the Board, exercise those Options already vested, but not yet exercised on the date of the Termination of the Relationship, until the Expiry Date.
Without prejudice to the previous paragraph, in the event of the Termination of the Relationship due to death or permanent invalidity of a Participant in the Plan, the Options already granted on the date of the Termination of the Relationship shall become immediately exercisable by the heirs of the Participant in the case of the death of the latter, or by the Participant in person or his/her legal representative if incapacitated in the case of permanent invalidity, for a period of one year following the date of the Termination of the Relationship. After that period of one year has passed, the Options shall permanently and irrevocably lose their validity. If the Termination of the Relationship occurs for other reasons, the Board or the Remuneration and Nominations Committee may decide that the Options granted to the Participant in question may be exercised immediately, if it considers, at its sole discretion, that particular circumstances exist which make it appropriate, in the case in question, to make this decision.
In any case, the termination of the employment relationship/other relationship equivalent to an employment relationship or an administrative relationship of a Participant with the Company as a result of the transfer of such Participant to another company in the Group does not constitute a case of Termination of the Employment Relationship for the purposes of the previous provisions of this Section. However, it does constitute Termination of Employment in cases where a change of control occurs, in the sense of a transfer to third parties (i) of the subsidiary to which the Participant belongs by the Company or (ii) of the business or the business branch in which the Participant works by the Company or one of its subsidiaries.'
No further coverage other than those required by law or by collective bargaining agreement is entered into by the Company, with the exception of supplementary insurance to the Italian Supplementary Health Care Fund (F.A.S.I.) for 'Executives of Companies Producing Goods and Services' (so-called Industrial Companies) to cover medical expenses (or similar forms of insurance for employees of foreign subsidiaries) and a D&O policy, as well as an insurance policy for the Chief Executive Officer to cover life risk, health risk, disability risk and accident risk.
Section II: Report on the remuneration paid for 2020
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This section is divided into two parts which illustrate respectively the following:
This Section is subject to a non-binding vote by the Shareholders' Meeting as provided for by article 123-ter of Italian Legislative Decree no. 58 of 24th February 1998 (the 'Consolidated Law on Finance', updated on the basis of Italian Legislative Decree no. 49 of 10th May 2019) which provides in paragraph 6: 'Without prejudice to the provisions of [...] the Shareholders' Meeting called [...] resolves in favour or against the second section of the report established by paragraph 4. The resolution is not binding'.
In addition, the person appointed to carry out the statutory audit of the financial statements verifies that the directors have appropriately prepared this Section, as required by article 123-ter of the Consolidated Law on Finance (as updated by Italian Legislative Decree of 10th May 2019).
The remuneration of the members of the management and supervisory bodies is illustrated on individual basis; instead, the remuneration provided for the other Key Management Personnel members is represented in the aggregate.
The implementation of the Policy, as verified by the Remuneration and Nominations Committee during the periodic assessment provided for in the Corporate Governance Code, was substantially in line with the general principles approved by the Board of Directors.
With reference to the representation of each of the items that make up remuneration, including the treatments provided in the event of termination from office or termination of the employment relationship, please refer to what has already been described in detail in Section I.
The remuneration items reported are consistent with the Policy approved in 2020 by the Board of Directors and submitted to the advisory and non-binding vote of the Shareholders' Meeting on 29th April 2020 pursuant to article 123-ter, paragraph 6, of the Consolidate Law on Finance, which voted in favour.
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The Shareholders' Meeting of 29th April 2020 voted in favour of Section II of the Report on Remuneration Policy and Remuneration Paid published in 2020. The chart below illustrates the result of the advisory vote.
The considerations that emerged at the Shareholders' Meeting of 29th April 2020, mainly related to increases in the fixed component and the annual bonus opportunity for the Chief Executive Officer and the Group General Manager, were examined to identify potential areas for improvement and were taken into account in the definition of Recordati's Remuneration Policy for 2021.
During 2020 the Remuneration and Nominations Committee convened 9 times. The percentage of attendance of Committee members at meetings is shown in the table at the end of paragraph 4.2 of the Report on Corporate Governance and the Ownership Structure.
Minutes of the Remuneration and Nominations Committee meetings have been duly taken.
The Committee had the opportunity to access the information and Company Functions necessary to carry out its duties.
During the Financial Year, the Committee did not incur any expenses in the performance of its duties.
During 2020 and up to the date of the approval of this Report, the activity of the Committee has mainly concerned the following:
| Activities performed during 2020 and early 2021 | |
|---|---|
| Report on the Remuneration Policy and the Remuneration Paid |
Proposal to the Board regarding the 2020 Remuneration Policy Analysis of the 2020 AGM votes on the Remuneration Report Analysis of the new Corporate Governance Code with reference to remuneration topics Preliminary analysis of the 2021 Remuneration Policy Assessment of the amendments to be implemented in relation to the Report also following recent amendments of the Issuers' Regulation Review of the draft of the 2021 Report and proposal to the Board regarding the 2021 Report including the 2021 Remuneration Policy |
| Short-term incentive plan |
Payment of 2019 bonuses Examination and proposal to the Board of a new MBO system Setting of 2020 objectives Analysis of the MBO plan in order to assess possible proposal of changes for 2021 Preliminary review of 2021 MBO quantitative objectives scheme Setting of 2021 objectives Payment of 2020 bonuses |
| Long-term incentive plan |
Analysis of the appropriateness of alternative long-term incentive plans to stock options Analysis of the elements that should be amended with regards to the 2018-2022 Stock Option Plan Proposal of a new Stock Option Plan Proposal to the Board with regards to the setting of 2020 objective of the Stock Option Plans Proposal to the Board regarding the new 2021-2023 Stock Option Plan Setting of the 2021 objective of the Stock Option Plans |
| Other activities | Benchmarking analysis for the CEO and Group General Manager remunerations Examination and formulation of a proposal to the Board regarding the remuneration of the new Chairman of the Board Analysis of the adequacy of the remuneration of the members of the Board of Statutory Auditors and formulation of recommendation to the Board Update of the Regulation of the Remuneration and Nominations Committee Remuneration and Nominations Committee work plan for 2021 |
The amounts relating to fixed remuneration are specified under the respective item in Table 1.
Non-executive Directors were paid - eventually on a pro rata temporis basis - the fixed remuneration for the office held during 2020, amounting to € 60,000.
The Chair, Flemming Ørnskov, in office until 29th April 2020, was paid:
Therefore, the total annual financial treatment for the Chair in office until 29th April 2020, paid as fixed remuneration, was equal to € 98,835.62.
The current Chair, Alfredo Altavilla, appointed by the Board of Directors on 29th April 2020, was paid:
the 'basic' pro rata remuneration as a director of Recordati S.p.A., equal to € 60,000, for the office held from 1st January 2020 to 31st December 2020;
the pro rata remuneration for the special office as Chair, pursuant to article 2389, paragraph 3, of the Italian Civil Code, equal to € 120,534.25, from 29th April 2020 to 31st December 2020.
Therefore, the total annual financial treatment for the Chair currently in office, paid as fixed remuneration, was equal to € 180,534.25.
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The Chief Executive Officer, Andrea Recordati, was paid:
Therefore, the total annual economic treatment for the Chief Executive Officer, paid as fixed remuneration, was equal to € 1,200,000. This fixed remuneration represents 64% of the total remuneration received by the Chief Executive Officer, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
In addition, the Board convened on 11th February 2019 resolved upon:
The Group General Manager, Fritz Squindo, was paid:
Therefore, the total annual economic treatment for the Group General Manager, paid as fixed remuneration, was equal to € 509,998.05. This fixed remuneration represents 69% of the total remuneration received by the Group General Manager, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
The other Executive Directors, as already mentioned in Section 1 of the 2020 Report on the Remuneration Policy and the Remuneration Paid, have waived in advance their remuneration as Directors of the Company and therefore nothing was paid.
As at 31st December 2020, the following 6 Key Management Personnel members were in office at the Company:
and the following 2 Key Management Personnel members were in office at subsidiaries:
These Key Management Personnel members has received an overall gross annual remuneration equal to € 2,743,799.26.
The amounts relating to variable remuneration are specified under the respective item in Tables 1 and 3B.
With reference to the short-term incentive scheme (MBO), the level of achievement of the objectives approved by the Board of Directors with regard to the Chief Executive Officer is shown below:
| CIRCUIT BREAKER | ON/OFF CONDITION | |
|---|---|---|
| Group Operating Income* | ON | |
| OBJECTIVES | LEVEL OF ACHIEVEMENT | |
| ECONOMIC AND FINANCIAL OBJECTIVES (70%) set excluding new M&A/licensing transactions related to products already on the market, performed during the reference financial year |
||
| Group Operating Income* (35%) | Threshold level not achieved | |
| Group Net Revenues (21%) | Threshold level not achieved | |
| Group Net Profit* (14%) | Intermediate between threshold (Budget) and maximum achievement |
|
| STRATEGIC OBJECTIVES (30%) | ||
| Acquisition/Licensing | Maximum achievement |
* Adjusted for the impact of exceptional, non-recurring costs related to the Covid-19 pandemic, i.e. donations to hospitals and national health services, as well as costs for ensuring the safety of workplaces and for the purchase of personal protective equipment. The Board of Directors, having heard the favourable opinion of the Remuneration and Nominations Committee, has approved this adjustment, being in line with the Policy which allows adjustments for exceptional items on an equitable basis.
On the basis of the performance achieved, the overall remuneration for the Chief Executive Officer, to be paid as short-term variable component relating to the 2020 performance period, is therefore equal to € 481,800 gross, equal to 40.15% of the gross annual remuneration. The incentive accrued in 2020 as MBO will be paid in 2021 in accordance with the procedures set out in the MBO system. This short-term variable remuneration represents 26% of the total remuneration received by the Chief Executive Officer, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
As regards the Group General Manager, the level of achievement of the objectives approved by the Board of Directors is shown below:
| CIRCUIT BREAKER | ON/OFF CONDITION | |
|---|---|---|
| Group Operating Income* | ON | |
| OBJECTIVES | LEVEL OF ACHIEVEMENT | |
| ECONOMIC AND FINANCIAL OBJECTIVES (80%) set excluding new M&A/licensing transactions related to products already on the market, performed during the reference financial year |
||
| Group Operating Income* (40%) | Threshold level not achieved | |
| Group Net Revenues (24%) | Threshold level not achieved | |
| Group Net Profit* (16%) | Intermediate between threshold (Budget) and maximum achievement |
|
| QUALITATIVE OBJECTIVES (20%) | ||
| 1. Presentation of the 'Recordati Group ESG Roadmap' 2. Definition of integration plans and subsequent implementation in relation to potential M&A transactions |
Maximum achievement |
* Adjusted for the impact of exceptional, non-recurring costs related to the Covid-19 pandemic, i.e. donations to hospitals and national health services, as well as costs for ensuring the safety of workplaces and for the purchase of personal protective equipment. The Board of Directors, having heard the favourable opinion of the Remuneration and Nominations Committee, has approved this adjustment, being in line with the Policy which allows adjustments for exceptional items on an equitable basis.
On the basis of the performance achieved, the overall remuneration for the General Manager, to be paid as short-term variable component relating to the 2020 performance period, is therefore equal to € 94,500 gross, equal to 21% of the gross annual remuneration. The incentive accrued in 2020 as MBO will be paid in 2021 in accordance with the procedures set out in the MBO scheme. This short-term variable remuneration represents 13% of the total remuneration received by the Group General Manager, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
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The other Key Management Personnel members have accrued - on the basis of the performance achieved in relation to the MBO system - an overall annual variable remuneration of € 319,210 gross.
In addition, the Chief Executive Officer proposed to grant to some Key Management Personnel members some bonuses, of not significant amount (aggregate amount of € 83,230 gross), despite the failure to achieve some objectives, or slightly higher than the amount resulting from the mathematical calculation of the objectives achievement, and this to take into account of the significant contribution of these managers, in such a difficult financial year due to the pandemic, and to retain and motivate key managers necessary to pursue the Company's short- and long-term interests in key strategic areas in a sustainable manner.
The payment of these bonuses takes place anyway in a context of more than satisfactory results of the Group. In fact, despite the pandemic, the economic and financial performance in 2020 remained solid, recording an increase in EBITDA and adjusted Operating Income compared to 2019. Also, in this context strongly influenced by the crisis caused by Covid-19, Recordati's commitment to its employees has materialized in numerous initiatives aimed at the protection, health and safety of people.
These bonuses were approved by the Board of Directors, on the proposal of the Chief Executive Officer, after preliminary investigation and favorable opinion of the Remuneration and Nominations Committee, acting as Committee responsible for related party transactions (although the Related Party Transaction Procedure of the Company currently in force would not apply, being said bonuses transactions with a related party of negligible amount).
Overall, the amount of variable remuneration granted to Key Management Personnel is on average equal to 14.67% of the gross annual remuneration.
As at 31st December 2020, the following long-term incentive plans are in place:
For the Chief Executive Officer, with reference to the long-term incentive scheme, given that the performance condition relating to the Group's consolidated Net Income has been met, the following options have matured:
During 2020, the Chief Executive Officer did not exercise option rights.
The remaining options, already assigned and not yet matured in 2020, will mature in the next years according to the timeframe set out in the Plan Regulations.
The fair value of the options relating to 2020 assigned to the Chief Executive Officer is € 192,617.74. This value represents 10% of the total remuneration received by the Chief Executive Officer, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
For the Group General Manager, with reference to the long-term incentive scheme, given that the performance condition relating to the Group's consolidated Net Income has been met, the following options have matured:
During 2020, the Group General Manager exercised the following options:
90,000 options of the 2010-2013 Stock Option Plan, matured in relation to the 2012 assignment.
The remaining options, already assigned and not yet matured in 2020, will mature in the next years according to the timeframe set out in the Plan Regulations.
The fair value of the options relating to 2020 assigned to the Group General Manager is € 131,757.28. This value represents 18% of the total remuneration received by the Group General Manager, calculated as the sum of fixed remuneration and short-term and long-term variable remuneration relating to 2020.
Also for the other Key Management Personnel members, with reference to the long-term incentive scheme, given that the performance condition relating to the Group's consolidated Net Income has been met, the following options have matured:
a total of 37,500 options assigned to two (2) Managers of subsidiaries with Strategic Responsibilities in 2018 in relation to the 2018-2022 Stock Option Plan.
During 2020, the 6 Managers of the Company with Strategic Responsibilities exercised the following options:
During 2020, the 2 Managers of subsidiaries with Strategic Responsibilities, instead, exercised the following options:
a total of 46,000 options of the 2014-2018 Stock Option Plan, matured in relation to the 2016 assignment.
The remaining options, already assigned and not yet matured in 2020, will mature in the next years according to the time scales provided for in the Plan Regulations.
It is hereby clarified, for the avoidance of any doubt, that in Table 1 column 7 (fair value of equity remuneration), the amounts indicated therein do not include the fair value of Rossini Luxembourg (indirect shareholder of Recordati S.p.A.) shares, acquired at nominal value by said Key Management Personnel, as beneficiaries (in addition to a limited number of other managers) of an incentive plan, with a vesting period of five years, managed exclusively by Rossini Luxembourg and which does not establish obligations for Recordati. At termination of the vesting period they will benefit from a return. As prescribed by IFRS 2 a charge of € 1.1 million was booked to profit and loss as at 31st December 2020.
Remuneration paid for members of Committees was paid - eventually on a pro rata temporis basis - the following fixed fees:
| Remuneration and Nominations Committee | Risk, Control and CSR Committee | ||
|---|---|---|---|
| Chair | € 15,000 | Chair | € 20,000 |
| Member | € 10,000 | Member | € 10,000 |
Remuneration to the members of the Board of Statutory Auditors in charge from 1st January 2020 to 29th April 2020 was paid on a pro rata temporis basis. In particular, it was paid:
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Below are the remuneration to the members of the Board of Statutory Auditors in charge from 29th April 2020 to 31st December 2020, paid on a pro rata temporis basis:
| Chair | € 41,786.30 |
|---|---|
| Statutory Auditor | € 30,328.77 |
In addition, a total remuneration of € 27,500 was paid to Mr. Marco Nava for the offices held in the subsidiaries (Innova, Italchimici, Natural Point, RRD Italy).
During 2020 benefits were awarded in line with the Policy, with regard to the Chief Executive Officer and the other Key Management Personnel members, the value of which is shown in Table 1.
During 2020, no severance payments were made to Executive Directors and to Key Management Personnel.
In line with the requirements introduced by the updated version of the Issuers' Regulation published by Consob and in light of the remuneration paid described in this Section of the 2021 Report on the Remuneration Policy and the Remuneration Paid, the following is a comparison, considering the 2019 and 2020 Financial Years, of the annual variations:
| NAME | POSITION | Δ 2020-2019 |
|---|---|---|
| Andrea Recordati | Chief Executive Officer | -16.85% |
| Michaela Castelli | Director | +2.24%* |
| Giampiero Mazza | Chair (until 5th February 2019) and Director |
0%** |
| Cathrin Petty | Director | 0%** |
| Fritz Squindo | Director | -26.01% |
* Please note that on 5th February 2019 the Shareholders' Meeting has appointed the new Board of Directors and has established the remuneration for the new Directors, on the basis of the proposal made by the reference shareholder. The fixed remuneration for Directors has been € 40,000 on yearly basis until 5th February 2019 and € 60,000 on yearly basis from 5th February 2019. ** The Director waived his right to receive any remuneration for the office of Director in both 2019 and 2020 Financial Years.
| NAME | POSITION | Δ 2020-2019 |
|---|---|---|
| Antonio Santi | Chair | +16.18%* |
| Livia Amidani Aliberti | Statutory Auditor | +19.26%* |
* Please note that on 29th April 2020 the Shareholders' Meeting has appointed the new Board of Statutory Auditors and has established the remuneration for the new Statutory Auditors, on the basis of the benchmarking analysis conducted by Willis Towers Watson on the remuneration practices in industrial and services companies belonging to FTSE MIB Italia index. The fixed remuneration for Statutory Auditors has been:
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| PARAMETER | Δ 2020-2019 |
|---|---|
| EBITDA* | +4.66% |
* Net income before income taxes, financial income and expenses, depreciation and write down of both property, plant and equipment, intangible assets and goodwill, and non-recurring events.
| PERIMETER | Δ 2020-2019 |
|---|---|
| Total number of employees as at 31st December* | +1.73% |
* Excluding the Chief Executive Officer and the Group General Manager.
Table 1 - Remuneration paid to Directors, Statutory Auditors, General Managers and other Key Management Personnel (€000)
| Remuneration paid to Directors (*) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Non-equity variable remuneration |
Severance indemnity for |
|||||||||||
| Name and Surname |
Position | Period in which the office was held |
Date at which the office ends |
Fixed remuneration |
Remuneration for attendance on committees |
Bonuses and other incentives |
Share in profits |
Non monetary benefits |
Other remuneration |
Total (**) |
Fair Value of equity remuneration |
end of office or termination of employment |
| Alfredo Altavilla |
Chair (in office from 29th April 2020) |
From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 (ii) 121 |
0 | 0 | 0 | 0 | 0 | 181 | 0 | 0 |
| Guido Guidi |
Vice-Chair | From 29.04.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 40 |
0 | 0 | 0 | 0 | 20 | 60 | 0 | 0 |
| Andrea Recordati |
Chief Executive Officer |
From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 (ii) 1,140 |
0 | 482 | 0 | 110 | 0 | 1,792 | 193 | 0 |
| Francesco Balestrieri |
Director | From 29.04.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 40 |
0 | 0 | 0 | 0 | 20 | 60 | 0 | 0 |
| Silvia Candini |
Director | From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 |
(a) 10 (b) 10 |
0 | 0 | 0 | 0 | 80 | 0 | 0 |
| Michaela Castelli |
Director | From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 |
(a) 10 (d) 20 |
0 | 0 | 0 | 0 | 90 | 0 | 0 |
| Joanna Le Couilliard |
Director | From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 |
(b) 3 (c) 15 |
0 | 0 | 0 | 0 | 78 | 0 | 0 |
| Piergiorgio Peluso |
Director | From 29.04.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 40 |
(b) 7 |
0 | 0 | 0 | 0 | 47 | 0 | 0 |
| Fritz Squindo |
Director | From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
(i) 60 (iii) 450 |
0 | 95 | 0 | 3 | 0 | 608 | 132 | 0 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Giorgio De Palma |
Director | From 29.04.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
Mr Giorgio De Palma waived his right to receive any remuneration for the office of Director. | ||||||||
| Giampiero Mazza |
Chair (up to 05.02.2019) and Director |
From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
Mr Giampiero Mazza waived his right to receive any remuneration for the office of Director. | ||||||||
| Cathrin Petty |
Director | From 01.01.2020 to 31.12.2020 |
Approval of the financial statements as at 31.12.2021 |
Ms Cathrin Petty waived her right to receive any remuneration for the office of Director. | ||||||||
| Total | 2,191 | 75 | 576 | 0 | 113 | 40 | 2,996 | 324 | 0 |
| Remuneration paid to Directors whose office ended during the 2020 Financial Year | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Period in which | Remuneration | Non-equity variable remuneration |
Non | Fair Value of | Severance indemnity for |
|||||||
| Name and Surname |
Position | the office was held |
Date at which the office ends |
Fixed remuneration |
for attendance on committees |
Bonuses and other incentives |
Share in profits |
monetary benefits |
Other remuneration |
Total (**) |
equity remuneration |
end of office or termination of employment |
| Flemming Ørnskov |
Chair | From 01.01.2020 to 29.04.2020 |
29.04.2020 | (i) 20 0 0 0 0 0 99 0 0 (ii) 79 |
||||||||
| Francisco Javier de Jaime Guijarro |
Director | From 01.01.2020 to 29.04.2020 |
29.04.2020 | Mr Francisco Javier de Jaime Guijarro waived his right to receive any remuneration for the office of Director | ||||||||
| Søren Vestergaar d-Poulsen |
Director | From 01.01.2020 to 29.04.2020 |
29.04.2020 | Mr Søren Vestergaard-Poulsen waived his right to receive any remuneration for the office of Director. | ||||||||
| Total 99 0 0 0 0 0 99 0 |
0 |
(*) Directors receive remuneration solely from the Company Recordati S.p.A. (and therefore not from its subsidiaries or associated companies).
(**) The 'Total' in column (6) contains the sum of items (1) to (5).
\
(i) Emoluments approved by shareholders even if not paid.
(ii) Remuneration for special positions pursuant to Article 2389, paragraph 3 of the Italian Civil Code.
(iii) Fixed employee remuneration gross of social security and tax obligations borne by the employee, net of compulsory collective social security obligations borne by the Company.
Neither attendance payments nor lump-sum expense reimbursements are paid.
(a) For the office of member of the Remuneration and Nominations Committee.
(b) For the office of member of the Risk, Control and CSR Committee.
(c) For the office of Chair of the Remuneration and Nominations Committee.
(d) For the office of Chair of the Risk, Control and CSR Committee.
This refers to the portion of equity remuneration paid recognised in the financial statements.
| Remuneration paid to Statutory Auditors | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Period in | Remuneration | Non-equity variable remuneration |
Non | Fair Value of | Severance indemnity for end of |
|||||||
| Name and Surname |
Position | which the office was held |
Date at which the office ends |
Fixed remuneration |
for attendance on committees |
Bonuses and other incentives |
Share in profits |
monetary benefits |
Other remuneration |
Total (*) |
equity remuneration |
office or termination of employment |
| Antonio Santi | Chair | From 01.01.2020 to 31.12.2020 |
Approval of Financial Statements as at 31.12.2022 |
58 | 0 | 0 | 0 | 0 | 0 | 58 | 0 | 0 |
| Livia Amidani Aliberti |
Statutory Auditor |
From 01.01.2020 to 31.12.2020 |
Approval of Financial Statements as at 31.12.2022 |
42 | 0 | 0 | 0 | 0 | 0 | 42 | 0 | 0 |
| Ezio Simonelli |
Statutory Auditor |
From 29.04.2020 to 31.12.2020 |
Approval of Financial Statements as at 31.12.2022 |
30 | 0 | 0 | 0 | 0 | 0 | 30 | 0 | 0 |
| Total | 130 | 0 | 0 | 0 | 0 | 0 | 130 | 0 | 0 | |||
| Remuneration paid to Statutory Auditors whose office ended during the 2020 Financial Year | ||||||||||||
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Period in | Non-equity variable remuneration |
Severance indemnity |
||||||||||
| Name and Surname |
Position | which the office was held |
Date at which the office ends |
Fixed remuneration |
Remuneration for attendance on committees |
Bonuses and other incentives |
Share in profits |
Non monetary benefits |
Other remuneration |
Total (*) |
Fair Value of equity remuneration |
for end of office or termination of employment |
| (I) Remuneration at Recordati S.p.A. | ||||||||||||
| Marco Nava | Statutory Auditor |
From 01.01.2020 to 29.04.2020 |
29.04.2020 | 11 | 0 | 0 | 0 | 0 | 0 | 11 | 0 | 0 |
| (II) Remuneration from subsidiaries and associates | ||||||||||||
| Marco Nava | 28 | 0 | 0 | 0 | 0 | 0 | 28 | 0 | 0 | |||
| (III) Total | ||||||||||||
| Marco Nava | 39 | 0 | 0 | 0 | 0 | 0 | 39 | 0 | 0 |
(*) The 'Total' in column (6) contains the sum of items (1) to (5).
\
| Remuneration paid to Key Management Personnel | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | 1 | 2 | 3 4 5 6 7 |
||||||||||
| Period in which | Remuneration | Fixed remuneration | Non | Fair value of | Severance indemnity for end of office |
|||||||||
| Name and Surname | the office was held |
Fixed remuneration |
for attendance on committees |
Bonuses and other incentives |
Share in profits | monetary benefits |
Other remuneration |
Total (**) |
equity remuneration |
or termination of employment |
||||
| Six (6) Key Management Personnel members of the Company (*) |
2,151 | 0 | 365 (A) |
0 | 18 | 0 | 2,534 | 514 | 0 | |||||
| Two (2) Key Management Personnel members of subsidiaries (*) |
593 | 0 | 37 | 0 | 38 | 0 | 668 | 142 | 0 | |||||
| Total | 2,744 | 0 | 402 | 0 | 56 | 0 | 3,202 | 656 | 0 |
(*) As at 31st December 2020, 6 Key Management Personnel members were in office at the Company and 2 Key Management Personnel members were in office at subsidiaries.
(**) The 'Total' in column (6) contains the sum of items (1) to (5).
(A) Includes bonuses (equal to € 83,230 overall) granted by the Chief Executive Officer to some Key Management Personnel members, despite the failure to achieve some individual objectives, or slightly higher than the amount resulting from the mathematical calculation of the objectives, and this to take into account of the significant contribution of these managers, in such a difficult financial year due to the pandemic, and to retain and motivate key managers necessary to pursue the Company's short- and long-term interests in key strategic areas in a sustainable manner.
| Options held as at 01.01.2020 | Stock options granted to Directors, General Managers and other Key Management Personnel members Options assigned in 2020 |
Options exercised in 2020 | Options expired in 2020 |
Options held as at 31.12.2020 |
Options related to 2020 |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15= 2+5-11-14 | 16 |
| Name and Surname and position held as at 31.12.2020 |
Plan - Resolution date |
Number of options |
Exercise price (€) |
Exercise period (from - to) |
Number of options |
Exercise price (€) |
Exercise period (from - to) |
Fair value as at date of assignment (€) |
Date of assignment |
Market price of Recordati share as at date of assignment of options (€) |
Number of options |
Exercise price (€) |
Market price of Recordati share as at exercise date (€) |
Number of options |
Number of options |
Fair value (€) |
| Andrea Recordati Chief Executive Officer |
2014-2018 Plan - 17.04.2014 |
45,000 45,000 |
12.29 12.29 |
2018-31.12.22 2019-31.12.22 |
0 | 398,000 | 192,617.74 | |||||||||
| 27,000 | 21.93 | 2018*-31.12.24 | ||||||||||||||
| 27,000 | 21.93 | 2019*-31.12.24 | ||||||||||||||
| 27,000 | 21.93 | 2020*-31.12.24 | ||||||||||||||
| 27,000 | 21.93 | 2021*-31.12.24 | ||||||||||||||
| 2018-2022 Plan - |
50,000 | 30.73 | 2020*-31.12.26 | |||||||||||||
| 18.04.2018 | 50,000 | 30.73 | 2021*-31.12.26 | |||||||||||||
| 50,000 | 30.73 | 2022*-31.12.26 | ||||||||||||||
| 50,000 | 30.73 | 2023*-31.12.26 | ||||||||||||||
| Fritz Squindo Group General |
2010-2013 Plan - |
45,000 | 5.307 | 2016*-31.12.20 | 45,000 | 5.307 | 38.477 | 0 | 328,000 | 131,757.28 | ||||||
| Manager | 13.04.2010 | 45,000 | 5.307 | 2017*-31.12.20 | 45,000 | 5.307 | 38.477 | |||||||||
| 2014-2018 Plan - 17.04.2014 |
45,000 45,000 |
12.29 12.29 |
2018-31.12.22 2019-31.12.22 |
|||||||||||||
| 27,000 27,000 27,000 27,000 |
21.93 21.93 21.93 21.93 |
2018-31.12.24 2019-31.12.24 2020-31.12.24 2021-31.12.24 |
||||||||||||||
| 2018-2022 Plan | 32,500 | 30.73 | 2020*-31.12.26 | |||||||||||||
| - | 32,500 | 30.73 | 2021*-31.12.26 | |||||||||||||
| 18.04.2018 | 32,500 | 30.73 | 2022*-31.12.26 | |||||||||||||
| 32,500 | 30.73 | 2023*-31.12.26 |
\
| Six (6) Key | 2014-2018 Plan | 27,250 | 12.29 | 2018*-31.12.22 | 0 | 756,500 | 514,206.50 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Management | - | 58,750 | 12.29 | 2019*-31.12.22 | 27,500 | 12.29 | 42,7789 | ||||||
| Personnel | 17.04.2014 | ||||||||||||
| members of the Company (*) |
38,250 | 21.93 | 2018*-31.12.24 | ||||||||||
| 53,250 | 21.93 | 2019*-31.12.24 | |||||||||||
| 83,250 | 21.93 | 2020*-31.12.24 | 30,000 | 21.93 | 43,0169 | ||||||||
| 83,250 | 21.93 | 2020*-31.12.24 | |||||||||||
| 2018-2022 Plan | 131,250 | 30.73 | 2020*-31.12.26 | 55,000 | 30,73 | 44.3729 | |||||||
| - | 131,250 | 30.73 | 2021*-31.12.26 | ||||||||||
| 18.04.2018 | 131,250 | 30.73 | 2022*-31.12.26 | ||||||||||
| 131,250 | 30.73 | 2023*-31.12.26 | |||||||||||
| Two (2) Key | 2014-2018 Plan | 17,000 | 21,93 | 2018*-31.12.22 | 17,000 | 21.93 | 42,2293 | 0 | 172,000 | 142,208.69 | |||
| Management | - | 17,000 | 21.93 | 2019*-31.12.24 | 17,000 | 21.93 | 42,2293 | ||||||
| Personnel members of |
17.04.2014 | 17,000 | 21.93 | 2020*-31.12.24 | 12,000 | 21.93 | 42,2293 | ||||||
| subsidiaries (*) | 17,000 | 21.93 | 2021*-31.12.24 | ||||||||||
| (B) | 2018-2022 Plan | 37,500 | 30.73 | 2020*-31.12.26 | |||||||||
| - | 37,500 | 30.73 | 2021*-31.12.26 | ||||||||||
| 18.04.2018 | 37,500 | 30.73 | 2022*-31.12.26 | ||||||||||
| 37,500 | 30.73 | 2023*-31.12.26 |
* 30 days after the Shareholders' Meeting approving the financial statements of the previous financial year.
(*) As at 31st December 2020, 6 Key Management Personnel members were in office at the Company and 2 Key Management Personnel members were in office at subsidiaries.
| Cash plans granted to Directors, General Managers and other Key Management Personnel members | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| A | B | 1 | 2 | 3 | 4 | ||||
| Name and Surname | Position | Plan | Bonus for 2020 | Bonuses for prior years | Other Bonuses | ||||
| (A) | (B) | (C) | (A) | (B) | (C) | ||||
| Payable / paid | Deferred | Deferment period |
No longer payable |
Payable / paid | Still deferred | ||||
| Andrea Recordati | Chief Executive Officer |
2020 MBO | 481,800 | ||||||
| Fritz Squindo | Group General Manager |
2020 MBO |
94,500 | ||||||
| Six (6) Key Management Personnel members of the Company (*) |
2020 MBO |
365,200 (A) |
|||||||
| Two (2) Key Management Personnel members of subsidiaries (*) |
2020 MBO |
37,240 | |||||||
| Total | 978,740 | 0 | 0 | 0 | 0 | 0 | 0 |
(*) As at 31st December 2020, there were 6 Key Management Personnel members in office at the Company and 2 Key Management Personnel members in office at subsidiaries.
(A) Includes bonuses (equal to € 83,230 overall) granted by the Chief Executive Officer to some Key Management Personnel members, despite the failure to achieve some individual objectives, or slightly higher than the amount resulting from the mathematical calculation of the objectives, and this to take into account of the significant contribution of these managers, in such a difficult financial year due to the pandemic, and to retain and motivate key managers necessary to pursue the Company's short- and long-term interests in key strategic areas in a sustainable manner.
\
| Board of Directors | Position | Recordati S.p.A. | No. of shares held | No. of shares | No. of shares sold | No. of shares held |
|---|---|---|---|---|---|---|
| (Name and Surname) | type of shares DIRECTORS IN OFFICE AS AT 31ST DECEMBER 2020 |
as at 31.12.2019 | purchased in 2020 | in 2020 | as at 31.12.2020 | |
| Alfredo Altavilla | Chair | ordinary | 0 | 0 | 0 | 0 |
| Guido Guidi | Vice-Chair | ordinary | 0 | 0 | 0 | 0 |
| Andrea Recordati | Chief Executive Director | ordinary | 0 | 0 | 0 | 0 |
| Francesco Balestrieri | Director | ordinary | 0 | 0 | 0 | 0 |
| Silvia Candini | Director | ordinary | 0 | 0 | 0 | 0 |
| Michaela Castelli | Director | ordinary | 0 | 0 | 0 | 0 |
| Giorgio De Palma | Director | ordinary | 0 | 0 | 0 | 0 |
| Joanna Le Couilliard | Director | ordinary | 0 | 0 | 0 | 0 |
| Giampiero Mazza | Director | ordinary | 0 | 0 | 0 | 0 |
| Piergiorgio Peluso | Director | ordinary | 0 | 0 | 0 | 0 |
| Cathrin Petty | Director | ordinary | 0 | 0 | 0 | 0 |
| Fritz Squindo | Director | ordinary | 122,000 | 90,000* | 70,000* | 142,000 |
| DIRECTORS NO LONGER IN OFFICE AS AT 29TH APRIL 2020 | ||||||
| Flemming Ørnskov | Chair | ordinary | 0 | 0 | 0 | 0 |
| Francisco Javier de Jaime Guijarro | Director | ordinary | 0 | 0 | 0 | 0 |
| Søren Vestergaard-Poulsen | Director | ordinary | 0 | 0 | 0 | 0 |
* Shares resulting from the exercise of stock options.
| Recordati S.p.A. | No. of shares held | No. of shares | No. of shares sold | No. of shares held | |
|---|---|---|---|---|---|
| type of shares | as at 31.12.2019 | purchased in 2020 | in 2020 | as at 31.12.2020 | |
| Eight (8) Key Management Personnel members (*) | ordinary | 20,000 | 164,100* | 171,100* | 13,000 |
(*) As at 31.12.2020, 6 Key Management Personnel members were in office at the Company and 2 Key Management Personnel members were in office at subsidiaries. * Shares resulting from the exercise of stock options.
| Board of Statutory Auditors (Name and Surname) |
Position | Recordati S.p.A. type of shares |
No. of shares held as at 31.12.2019 |
No. of shares purchased in 2020 |
No. of shares sold in 2020 |
No. of shares held as at 31.12.2020 |
|---|---|---|---|---|---|---|
| BOARD OF STATUTORY AUDITORS IN OFFICE AS AT 31ST DECEMBER 2020 | ||||||
| Antonio Santi | Chair | ordinary | 0 | 0 | 0 | 0 |
| Livia Amidani Aliberti | Statutory Auditor | ordinary | 0 | 0 | 0 | 0 |
| Ezio Simonelli | Statutory Auditor | ordinary | 0 | 0 | 0 | 0 |
| STATUTORY AUDITORS NO LONGER IN OFFICE AS AT 29TH APRIL 2020 | ||||||
| Marco Nava | Statutory Auditor | ordinary | 0 | 0 | 0 | 0 |
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