Remuneration Information • Mar 8, 2019
Remuneration Information
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Telecom Italia S.p.A. Registered Office in Milan at Via Gaetano Negri 1 General Administration and Secondary Office in Rome at Corso d'Italia 41 PEC (Certified electronic mail) box: [email protected] Share capital 11,677,002,855.10 euros fully paid up Tax Code/VAT Registration Number and Milan-Monza-Brianza-Lodi Business Register Number 00488410010
Pursuant to art. 123-ter CLF Report approved by the Board of Directors at its meeting of 21 February 2019 Available on the website www.telecomitalia.com)
Alfredo Altavilla Chair of the Nomination and Remuneration Committee
Dear Shareholders,
As Chair of the Nomination and Remuneration Committee of Telecom Italia, I am pleased to present to you the Remuneration Report for the year 2018.
In compliance with current legislation, the first section of the document contains a description of the remuneration policy for 2019 for Directors and Key Managers with Strategic Responsibilities, while the second provides the final remuneration figures for the financial year 2018, including the shares in the Company and its Subsidiaries owned by Directors, Statutory Auditors and Key Managers with Strategic Responsibilities.
TIM's remuneration policy reflects its growth and economic results over the medium-longterm, contributing to aligning the actions of its management with the interests of its shareholders.
2018 was characterized by renewal of both the Board of Directors and the arrangements of the Company's Executive Directors.
The Committee set itself the primary objective of working on the remuneration systems so that they support and are consistent with the business strategy and help create value for shareholders, while remaining in alignment with international best practice.
The Committee has considered many topics: the main ones include the launch of the new performance share 2018-2020 Plan, the remuneration subjects connected to the Top Management renewal, the CEO position succession; and examination of the remuneration packages of the Chief Executive Officer and the Chairman, with subsequent transfer to the Board of Directors of its recommendations on the subject.
In the last part of the year, the Committee redesigned the short-term bonus system architecture (MBO) with special attention for both fixing the gate target and identifying economic-financial and functional targets related to the company's new structural and strategic guidelines.
I am confident that this Report testifies to the Committee's commitment to continuing the transparent approach required by legislation and endorsed by the Company, and thank you for your acceptance of and support for the policies adopted for 2019.
Alfredo Altavilla Chair of the Nomination and Remuneration Committee
This Report, approved by the Board of Directors at the proposal of the Remuneration Committee (henceforth "the Committee"), sets out:
The Policy described in the first section of the Report has been drawn up in accordance with the recommendations on remuneration contained in the Corporate Governance Code approved by the Corporate Governance Committee of Borsa Italiana (hereinafter, the "Corporate Governance Code"), to which TIM adheres.
TIM's remuneration policy is intended to guarantee necessary competitiveness on the job market, and to help fulfill the Company's strategic objectives. The primary aim of the resulting pay structure is to balance the fixed and variable pay components, and to utilize the benefits and welfare system with a view to pursuing sustainable results over the long-term, in accordance with the risk management policy of TIM's business.
TIM's remuneration policy for the executive directors and Managers with Strategic Responsibilities is essentially made up of the following components:
The key elements of these are summarized below.
| Remuneration Element |
Aims and features | Description | Economic Value | ||
|---|---|---|---|---|---|
| Fixed remuneration (see p. 7) |
The fixed remuneration component is aimed at rewarding the breadth and strategic nature of the role held and is anchored to the reference market. |
For 2019 the Committee confirms the policy of gradually aligning individual positioning (commensurate with the assigned responsibilities and role held) with the market references, determined on the basis of periodic market benchmarking. |
Chairman: 600,000 euros, gross Chief Executive Officer: 1,400,000 euros, gross, of which: 400,000 euros gross as fee for the office 1,000,000 euros gross as employment salary Key Managers with Strategic |
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| Responsibilities (KMSRs): commensurate with the role held. |
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| Short-term variable remuneration (MBO) (see p. 8) |
The short-term variable component aims to support achievement of the company's results, ensuring that the objectives are articulated coherently through the assignment of challenging targets across the entire organization. |
Bonuses are paid on the basis of the results achieved during the reference year according to a payout scale of 50%-100%-150%, with a linear interpolation between the minimum and target, and between the target and the maximum. The targets are set according to generally quantitative indicators that represent and are consistent with the strategic and business priorities, measured according to |
Chairman: not applicable Chief Executive Officer: gross value of 1,400,000 euros at target (100% of Fixed Remuneration) KMSRs: gross value at target up to 50% of the Fixed Remuneration and commensurate with the role covered. |
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| The target value of the bonuses is commensurate with the fixed component, according to proportions |
pre-established and objective criteria. The targets are: Group/Company-based, and strategic/role-specific. A gate target |
Head of Control Departments: gross value at target equal to 35% of Fixed Remuneration |
| Remuneration Element |
Aims and features | Description | Economic Value | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| that vary according to the role covered. |
made up of TIM Group EBITDA is set for all the beneficiaries. Any variable remuneration paid is subject to a clawback clause. |
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| Long-term variable | The long-term variable component of the remuneration is aimed at alignment promoting between the interests of the management and those of shareholders, |
The Chair is paid an end-of-mandate bonus at the end of 2020, based on Board management efficiency. The 2018-2020 Performance Share Plan, which has a three-year vesting period and a two-year lock up, is a |
Chairman: this equates to a 400,000 euros, which is subject to assessment by the Board. |
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| Remuneration (see p. 9) Severance |
through participation in the business risk. The target value of the bonuses is commensurate with the fixed component, according to proportions that vary according to the role covered. |
one-shot plan for the CEO and managerial roles, who have a strong impact on the business results. The Plan is subject to the achievement of performance conditions related to both the increase in the share price Performance) the (Stock and economic-financial indicators (Equity Free Cash Flow). The Plan is subject to a claw-back clause. |
Chief Executive Officer: the annual target for 2019-2020 twice the Fixed is. Remuneration. DRS and Other Managers (including Heads of Control Functions): annual target from 25% to 75% of Fixed Remuneration. |
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| (see p. 10) | Regulates indemnity to be paid if the director or employee relationship should be terminated early, with true and just cause. |
The severance clause could be combined with a non-competition clause, based on the importance and strategic aspects of the role held. |
Executive directors: not exceeding 24 months of remuneration. KMSRs: treatments foreseen by law, the National Labor Contract and individual agreements for a maximum of 36 months (including notice period). |
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| Benefits and welfare (see p. 11) |
Services offered to all (welfare) or in relation to the role covered (benefits) that increase the well-being of the individual and his or her family in economic and social terms. |
Defined along the lines of last year's policy: coverage of health expenses, supplementary pension, insurance policies, personal services, checkups, loans, car for all uses, mobile phone. |
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| For the most senior roles in Telecom Italia (Chairman, Chief Executive Officer and Managers with Strategic Responsibilities), the pay-mixes hypothesized for 2019 are as follows (the percentages assume the allocation of the annual target value both for the short-term incentive scheme - MBO - and the 2018-2020 Performance Share Plan): |
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| CHAIRMAN |
The C is repr long-t is only 2020 positiv mana evalua Chairman's pay resented net of term bonus - w y paid at the en - and is linked t ve Board agement ation. mix f the hich nd of to a
The corre allows pe Company ect balancing erformance to y's fundament of the fixed a o be maintain tal aims at the nd variable co ed and rewar e same time. omponents, c rded through compared to t participation the Company' in business ris 's strategic ob sk, while purs bjectives, uing the
The remuneration policy, meaning the set of principles and tools adopted to define the compensation packages of Directors and Managers with Strategic Responsibilities, involves the bodies listed below.
In order to ensure that the decisions taken regarding remuneration are appropriately investigated, the Board of Directors avails itself of the support of the Nomination and Remuneration Committee.
For specific information on how the Committee operates, please refer to the provisions in its Regulations, available on the website www.telecomitalia.com, Group section, channel Governance System.
For 2019, the Committee has planned its activities as follows:
The Committee met 12 times between the time of its formation in May 2018 and the Report on Remuneration approval date. The meetings were attended by the Head of the Human Resources and Organizational Development Department and the managers responsible for the areas being discussed were invited to provide support, from time to time. To calculate the Compensation package of the Chairman of the Board of Directors, the Committee was assisted by the consultancy Firm Russell Reynolds, which also supported it during the Chief Executive Office succession process, following revocation of attributions granted to Director Amos Genish. To perform its functions, the Committee relies on the relevant Departments within the Company, and also on the support of external consultants. Since October 2018, the Company has started using the services of Mercer Italia, which does not provide other services for Group companies.
The Remuneration Committee has since June 2018 been composed of the following Directors:
| First | Title |
|---|---|
| Alfredo Altavilla | Chairman, independent non-executive director |
| Paola Bonomo | Independent non-executive member |
| Giuseppina Capaldo | Independent non-executive member |
| Rocco Sabelli | Independent non-executive member |
| Michele Valensise | Independent non-executive member |
For further information on the Committee, please refer to the Report on corporate governance and the proprietary structures of TIM for the year 2018.
The Board of Statutory Auditors expresses the opinions required by current legislation on the proposed remuneration of Executive Directors holding specific offices. As required by the Company's Code of Corporate Governance, it also expresses an opinion on the remuneration paid to the heads of control functions.
Committee meetings are attended by the Chairman of the Board of Statutory Auditors or, if he is unavailable, by another Statutory Auditor designated by him.
The remuneration policy of the Telecom Italia Group is aimed at ensuring the company's competitiveness in the labor market, as well as its capacity to attract, retain and motivate people.
The guidelines and related remuneration tools are aimed at ensuring that:
Definition of policies is supported by analysis of market practices in terms of both compensation levels and the composition of compensation packages, benchmarked to a panel of companies of the Telco and Media segment at the international level and Italian companies comparable in size and/or market capitalisation.
The components of individual remuneration are:
The integration of the various components will allow the company to appropriately balance the monetary and nonmonetary tools, with the aim of increasing the satisfaction of recipients at a sustainable cost.
For 2019, the trend towards gradual alignment with market practices continues. The need for economically-viable business growth means that pay adjustments are selective, especially in terms of the fixed component, and relate to high-quality individuals and cases that do not align with the reference market.
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The individual remuneration components are analyzed below:
The breadth and strategic importance of a position are measured through a role evaluation system based on internationally recognized, certified methods. Every year TIM checks its remuneration positioning through market benchmarks which analyze both the national and international context.
Fixed remuneration is gradually aligned to the market benchmark in different ways:
For 2019 a conditio In order t minimum the MBO plan on for obtainin to differentiat m has been int n will again inc ng the bonus, e the level of troduced: clude a gate o itself linked to challenge req objective. This o all the targe quired of Man consists of th ets assigned to agement, in r he Group's EBI o the beneficia reaching the g ITDA indicator aries of the inc gate objective r, which is still centive plan. e, a diversified l d
Regarding financial manager objectives g the type of targets set fo s, the most s which are al f targets that or the CEO, an important fin lways objectiv t are set, for nd there is als ancial target vely measurab those reporti so a strategic s are conside ble. ing directly to c objective link ered, while ad o the CEO, th ked to the Ind dequate spac here is still a dustrial Plan. ce is given to focus on the For the other o role-specific e r c
Targets w Performa conduct system. will therefore ance Managem will also be a e be Group/S ment has also assured in the trategic or G o been definit e correspondi Group/role sp tively supersed ing monitorin ecific, with w ded as an MB ng process, pa weights indica BO objective. A arallel to and ated in the t Assessment o d independent tables below. of managerial t of the MBO . l O
For 2019 supersed Executive , the differen ed. Award of e Directors. ntiation of th f the bonus is e payout cur s based on th rves between he 50%-100% n Top Manag -150% scale t ement and o that was prev other manage viously only a ers has been applied to the n e
Linear int been rein minimum terpolation ap ntroduced for m and target. pplies to the the remainin intermediate ng manageria levels, if reac al population ched, and, co beneficiary o mpared to th f the Plan als he past two y so for the le ears, this has vels between s n
For those fixed com the fixed e reporting dire mponent. For t component, a ectly to the Ex the remaining according to t xecutive Direc g personnel o he complexity ctors, the targ n incentive sc y of the role co et values for t chemes, the t overed. the bonus will arget values w l be set at up will be set at to 50% of the up to 30% of e f
The bonu us, if awarded, , is paid entire ely in cash, wh hen the results s achieved hav ve been ascer rtained.
Finally, d excluding outstand uring salary r g the Manag ing results rel reviews, other gers with Str ating to extra r variable rem rategic Respo ordinary initia muneration to onsibilities atives that can ools (One-off to reward s nnot be classif Bonuses) may significant pe fied as ordinar y be adopted erformance o ry activities. d - potentially r particularly y y
The Long-Term Plan for 2018-2020 was launched in 2018, by assigning Performance Shares.
The Plan is intended to reward Beneficiaries for reaching the Group's strategic objectives, as stated in the industrial plan announced to the market, by aligning the interests of business management roles considered to be decisive with the interests of TIM shareholders, in terms of increasing share value over the medium to long-term.
The Share Performance Plan includes assigning Company shares free of charge, where accrual is conditional on achieving the Performance Conditions stated below, defined in line with the main 2018-2020 Strategic Plan objectives:
Relative performance of Telecom Italia ordinary share against the average performance of a group of competitors composed of:
| BT Group PLC |
|---|
| Deutsche Telekom AG |
| Elisa OYJ. |
| Koninklijke KPN NV |
| Orange SA |
| Proximus SADP |
| Swisscom AG |
| Telefonica SA |
| Telenor ASA |
| Telia Co AB |
| Vodafone Group PLC |
The benchmark achievement values are set as follows:
For intermediate performance levels we will proceed to linear interpolation:
The Performance Parameter linked to cash generation is represented by the cumulated equity free cash flow over the three-year period. This amount, defined as the net cash flow before dividend and investments in frequencies, as per the 2018-2020 business plan, is measured as follows:
This amount represents the available free cash flow for the payment of dividends, the repayment of debt, the impact of IAS 17 (finance leases) and the investment in frequencies, and does not include the financial impact of acquisitions or disposals of investments (M&A), if any.
The target value will be recalculated excluding the impact of the changes, compared to the three-year plan, related to the scope of consolidation, the exchange rates and the accounting policies. The achievement values are set as follows:
Where the Performance Parameter value of the cumulated Equity Free Cash Flow is found at intermediate levels with respect to those indicated above, the number of Performance Shares accrued will be calculated using a linear interpolation criterion.
The bonus is calculated for the full three years. Pro rata payments will be made in the case of premature death or termination of contract (i) with the Company, by the CEO or (ii) with the Company or a Subsidiary by the remaining beneficiaries, after January 1, 2020, provided that the outgoing person is a "good leaver" (this is always subject to the Beneficiary having accepted a non-competition obligation of at least 12 months).
There will be no entitlement to pro rata reproportioning for termination for any reason between January 1, 2018 and December 31, 2019.
The vesting period will be three years, at the end of which a number of shares commensurate with the achievement of the performance conditions will be allocated (with clawback clause). After the award is made, all the shares will be subject to a two-year lock up, but this does not affect the beneficiaries' right to sell, at the time of allocation, enough shares to cover all the costs of the operation including the taxes, commission and other charges payable by the beneficiary.
For more details, please see the information document, available at www.telecomitalia.com.
A review of the Equity Free Cash Flow parameter will be proposed at the Shareholders 'Meeting of 29 March 2019, with alignment of the same parameter to the 2019 and 2020 targets, as per 2019-2021 Business Plan (please see the Report to the Shareholders' Meeting and the Supplement Information Document).
The Special Award, introduced in 2016 with the appointment of Mr Cattaneo as CEO, was a four year plan (2016- 2019), based on the allocation for each of the financial years included of a percentage share of the overperformance compared to the targets for the period, with a total gross maximum (for the whole four years, relating to 5.5% of overperformance) of 55,000,000 euros.
The indicators were EBITDA (weight 50%), Net Financial Position (weight 25%) and Opex Reduction (weight 25%). The bonus (subject to clawback) was paid at the end of the cycle, 80% in equity and the remainder in cash.
The 2016-2019 Special Award was exceeded following the departure of Flavio Cattaneo. Managers who were beneficiaries of the Special Award in 2017 will receive the bonus accrued for 2016, after the approval of the 2019 Financial Statements.
The information document on the Special Award is available on the website www.telecomitalia.com.
In light of the best practices on "Termination Provisions" for the Executive Directors, it is company policy that severance pay, in the event of the early termination of the office as Director without just cause, should not exceed 24 months of remuneration.
For the remaining Key Managers with Strategic Responsibilities, settlements applicable by virtue of legal provisions, national collective labor agreements and individual agreements will apply. Including any payment in lieu of notice, these payments may be equivalent to no more than 36 months of Total Remuneration (Gross Annual Remuneration + MBO).
The CEO is responsible for identifying individuals whose strategic importance and profile may qualify them for severance pay. This may be linked to a non-competition agreement.
A contractual clawback mechanism which enables the variable remuneration allocated to Executive Directors and Key Managers with Strategic Responsibilities to be recovered has been in existence since 2016. The clawback clause may be activated in the three years following the payments when said disbursement occurred following willful misconduct or gross negligence on the part of the executives concerned or in the case of an error in the formulation of data which resulted in a restatement correction to a Financial Statement.
Benefits and welfare constitute non-monetary elements of remuneration. In particular:
For 2019, the Company again confirms its significant investment in terms of the economic resources dedicated to this area.
The total gross annual remuneration of the Board of Directors (Art. 2389(1) of the Italian Civil Code) was set at 2,200,000 euros at the Meeting of Shareholders on May 4, 2018.
The Board of Directors' meeting of May 16, 2018 divided up that amount by allocating 100,000 euros gross per annum to each Director (excluding the Chairman and the Chief Executive Officer); this is fixed remuneration. The non-executive Directors are not entitled to any remuneration linked to company results, nor to any severance pay.
The following additional remuneration will be also paid to the Directors who are members of Committees:
| Strategy Committee |
Control and Risk Committee |
Nomination and Remuneration Committee |
|---|---|---|
| Fulvio Conti (C) | Paola Giannotti De Ponti (C) | Alfredo Altavilla (C) |
| Luigi Gubitosi (CEO) | Massimo Ferrari | Paola Bonomo |
| Massimo Ferrari | Marella Moretti | Giuseppina Capaldo |
| Arnaud Roy de Puyfontaine | Lucia Morselli | Rocco Sabelli |
| Rocco Sabelli | Michele Valensise | Michele Valensise |
| Remuneration: 25,000 euros per director (the Chair of the Board of Directors and CEO do not receive this compensation) |
Remuneration: Members: € 45,000 Chairman: € 65,000 |
Remuneration: Members: € 40,000 Chairman: € 60,000 |
| Strategy Related parties |
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|---|---|---|---|---|---|---|---|---|
| Lucia Morselli (C) | ||||||||
| Giuseppina Capaldo | ||||||||
| Maria Elena Cappello | ||||||||
| Marella Moretti | ||||||||
| Dante Roscini |
Remuneration: Members: € 25,000 Chairman: € 40,000
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No sp pecific severan nce treatment has been agr reed.
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Each target is measured individually, so different combinations of the levels of achievement of the targets are possible; the linear interpolation mechanism will be used to assess these levels.
On February 21, 2019 the Board of Directors decided on the following incentive targets for the 2019 MBO, as proposed by the Nomination and Remuneration Committee and in line with the overall architecture (of the plan):
| Objectives | Weight | Min (% of tgt) | Tgt | Max (% of tgt) | |||
|---|---|---|---|---|---|---|---|
| A | TIM Group Ebitda GATE | 30% | 95% | budget | 105% | ||
| B | TIM Group Operating Free Cash Flow | 30% | -12% | budget | +12% | ||
| C | TIM Group Services Revenues | 15% | -2% | budget | +2% | ||
| D | TIM Group Net Financial Position Adj | 15% | +2,5% | budget | -2,5% | ||
| E | Project to maximize the value of the TIM's fixed network infrastructure |
10% | Evaluation of the project's progress milestones by the Board of Directors |
For 2019, the TIM Group EBITDA gate objective is confirmed. Achievement of this objective at the minimum level constitutes the condition to access all the bonus objectives, with the consequence that nonachievement would mean that the bonus could not be paid. The minimum gate objective for the CEO is 95% of the target value.
The clause to clawback the sums paid out may be activated in the three years following payment of the bonus, as set out in the policy.
The CEO was awarded the 2018-2020 Long-term Plan for the two-year period 2019-2020. The annual Plan participation target is 200% of the fixed component; depending on the degree to which the performance targets are met, the bonus may be as high as 350% of the fixed component for each year of participation in the Plan. Payment of this form of remuneration is subject to a deferral period of two-year (lock up) after the shares have been allocated. Share allocation is based on fulfillment of performance criteria. The 2018-2020 Long-term Plan is subject to a clawback clause.
For more details on the LTI Plan 2018-2020, please refer to the information document at www.telecomitalia.com.
Please see page 10 for the review proposed to the Shareholders' Meeting of March 29, 2019.
As per policy, in the event of termination of the office of Director without just cause, compensation is provided equal to the remuneration due up to the natural expiry of the mandate, with a maximum of 24 months. In addition to the prior notice, the same limit applies to the termination of the employment contract.
In relation to the managerial role, the Chief Executive Officer enjoys the benefits specified for the management of the Company (health insurance cover through the Telecom Italia Group Executive supplementary healthcare assistance; supplementary pension cover through membership of the Telecom Italia Group Executive complementary pension fund; work-related and non-work-related accident, life and invalidity due to illness insurance cover; company car for mixed use; checkups). The Company is also covered by a "professional risks policy" for all Directors & Officers.
Key Managers with Strategic Responsibilities, who have authority and responsibility for planning, directing and controlling the activities of the Telecom Italia Group, directly or indirectly, including directors, are at present identified as follows:
| Directors: | |
|---|---|
| Luigi Gubitosi | Managing Director and Chief Executive Officer of Telecom Italia S.p.A. 1 General Manager 1 |
| Executives: | |
| Sami Foguel | Chief Executive Officer TIM Brasil |
| Mario Di Mauro | Head of Innovation & Customer Experience 2 |
| Lorenzo Forina | Chief Revenue Office 3 |
| Carlo Nardello | Chief Strategic, Development & Transformation Office4 |
| Agostino Nuzzolo | Head of Legal and Tax 5 |
| Piergiorgio Peluso | Head of Administration, Finance and Control |
| Elisabetta Romano | Chief Technology Office 6 |
| Luciano Sale | Head of Human Resources & Organizational Development 7 |
| Stefano Siragusa | Chief Wholesale Infrastructures Network & Systems Office 8 |
| Anna Spinelli | Head of Procurement Unit & Real Estate 9 |
3 From January 18 2019, date on which the pre-existing functions Chief Business & Top Clients Office – assigned to Lorenzo Forina - and Chief Consumer Office – assigned to Stefano Azzi – were superseeded. 4 From February 20, 2019
1 From November 18, 2018
2 From January 7, 2019; Until January 6, Head of Strategy, Innovation & Quality
5 From January 7, 2019; Until January 6 Head of Legal, Regulatory & Tax
6 From July 1, 2018
7 From February 5, 2019 previously function responsibility was attributed to Riccardo Meloni
8 From April 12, 2018; Until April 11, Chief TIM Infrastructures Office
9 From September 3, 2018
The com Chairman mpensation pa n and the Chie ackage struct ef Executive O ure for 2019 Officer, is descr for Key Man ribed below: nagers with S Strategic Resp ponsibilities, e excluding the e
The s criteri strategy for 2 a for adjustm 019 is to ma ment of fixed re intain remune emuneration. eration in line e with marke t practice, wh hile providing g for selective e
The 2 2019 incentive e plan is linked d to the achiev vement of a c ombination o f predefined t targets:
The distribution o of objectives is s described in t the following etable:
| TARGETS | WEIGHT |
|---|---|
| TIM GROUP EBITDA (GATE) | 30% |
| TIM GROUP SERVICES REVENUES | 20% |
| TIM GROUP OPERATING FREE CASH FLOW | 20% |
| TIM GROUP NET FINANCIAL POSITION | 10% |
| 1 STRATEGIC OBJECTIVE | 20% |
For bon valu 2019 there w us system. Fo ue. ill again be a or Directors w gate objectiv with Strategic ve that constit Responsibiliti tutes the min es, the minim imum conditio mum gate obje on for access ective is 95% ing the entire of the target e t
A pa achi arameterized ieved, up to a scale is applie bonus equal t ed, whereby a to 150% of the a bonus of 50% e target amou % of the targe unt if the max et amount is p ximum level is paid if the min s achieved. nimum level is s
Each poss h target is me sible; the linea easured indivi ar interpolatio dually, so diff n mechanism ferent combin m will be used t ations of the to assess thes levels of achie se levels. evement of th he targets are e
The max MBO system ximum of 50% for Key Mana % of the fixed r agers with Str remuneration rategic Respo n. nsibilities prov vides an annu ual target bon nus of up to a a
The the clause to claw specific comp wback the sum pany Regulatio ms paid out m ons. may be activat ted in the thre ee years follow wing payment t, as set out in n
The pag the part Directors wit e 9, with an a performance ticipation in th h Strategic Re annual particip targets are m he Plan. esponsibilities pation target met, the bonus s have been a of 75% of the s may be as hi llocated the 2 e fixed compo igh as 112.5% 2018-2020 Lon nent; dependi of the fixed c ng-term Plan, ing on the de component fo described on gree to which r each year of n h f
Pay bee The ment of this f n allocated. S 2018-2020 Lo form of remun hare allocatio ong-term Plan neration is sub on is based on n is subject to bject to a defe fulfillment of a clawback cl erral period of f performance lause. two-year (loc criteria. ck up) after th e shares have e
Plea ase see page 1 10 for the revie ew proposed t to the Shareh olders' Meetin ng of March 29 9, 2019.
The 2016-2019 Special Award was exceeded in 2017. Several Directors with Strategic Responsibilities have received the Special Award and will receive the bonus accruing in 2016 following approval of the 2019 financial statements.
The Special Award is subject to a clawback clause.
Settlements applicable by virtue of legal provisions, national collective labor agreements and supplementary individual agreements, are specified (always excluding cases of dismissal with just cause). Including any payment in lieu of notice, these payments may be equivalent to no more than 36 months of Total Remuneration (Gross Annual Remuneration + MBO).
The CEO is responsible for identifying individuals whose strategic importance and profile may qualify them for severance pay. This may be linked to a non-competition agreement.
Benefits are granted similar to those provided for all other company managers: company car for mixed use, insurance policies (workplace accidents, life and infirmity caused by illness), complementary health insurance cover, complementary pension fund and checkups. The Company is also covered by a "professional risks policy" for all Directors & Officers.
In accordance with the Italian Stock Exchange recommendations, below is a representation of the bonus schemes for the Head of Audit and the Director responsible for financial reporting.
Head of Audit - Incentive schemes
The Head of Audit receives the short-term variable bonus scheme. The gate objective, parameterized scale and payout curve are the same as those given for the Directors with Strategic Responsibilities, in line with previous years.
Besides the gate target, the remaining objectives, with an overall weighting of 70%, are connected to the role and are proposed by the Risks and Control Committee, and approved by the Board of Directors.
The Head of Audit also receives the 2018-2020 LTI Plan, described above.
For the Director appointed to prepare the corporate accounts, bonus mechanisms are the same as those adopted for all Directors with Strategic responsibilities, described above.
This section describes the remuneration measures for the members of the Board of Directors and the Key Managers with Strategic Responsibilities in 2018.
The Shareholders' Meeting held on May 4, 2018, appointed the new Board of Directors, determining the total annual remuneration of the body as 2,200,000 euros, to be divided between its members in accordance with the resolutions to be made by the Board itself.
On May 16, 2018, the Board of Directors divided the aforementioned total compensation within terms summed up in the specific chapter of the First Section of this Report
The following additional remuneration will also be paid to current Directors who are members of Committees:
Fulvio Conti (C) Amos Genish (CEO pro tempore)* Luigi Gubitosi (CEO pro tempore)** Massimo Ferrari Arnaud Roy de Puyfontaine Rocco Sabelli Remuneration: € 25,000 with the exception of the Chair and the CEO (*) Position held until November 13,2018; (**) Position taken on November 18, 2018.
(**) Position taken on December 6, 2018.
(***) Position taken on June 25, 2018.
(*) Position taken on June 25, 2018.
| Alfredo Altavilla (C) |
|---|
| Paola Bonomo |
| Giuseppina Capaldo * |
| Rocco Sabelli |
| Michele Valensise |
Remuneration: Members: € 40,000 Chairman: € 60,000 Committee for Relations with Related Parties
| Lucia Morselli (C) |
|---|
| Giuseppina Capaldo |
| Maria Elena Cappello |
| Marella Moretti * |
| Dante Roscini |
| Remuneration: Members: € 25,000 Chairman: € 40,000 |
(*) Position taken on June 25, 2018.
In accordance with the Company's Code of Corporate Governance, the Chairman of the Board of Directors (not executive or independent) was appointed to liaise between the Heads of the Control Departments and the Board of Directors, and to manage their working relations with the Company.
There is no additional form of remuneration for this role.
The detailed analysis of the remuneration received by the named Directors in office in the period is shown in Table 1 in the second part of this section.
The position of Executive Chairman was held by Arnaud Roy de Puyfontaine from the beginning of the year to April 24, 2018. During the Board of Directors' meeting held on March 22, 2018, the Executive Chairman resigned from office. Said resignation came into effect as from April 24, 2018.
During the period, his remuneration was represented by the emolument provided for under Article 2389, paragraph 3, of the Italian Civil Code, consisting of a fixed component of 900,000 euro gross per annum, and a variable component in the form of an MBO totaling, at target, 900,000 euro gross per annum, not including remuneration as a member of the Board of Directors and of the Strategy Committee.
The Executive Chairman did not receive any variable short-term remuneration.
The detailed analysis of the remuneration received for the role is shown in Table 1 of the second part of this section.
TIM's Board of Directors' meeting, held on May 7, 2018 following the renewal decided by the Shareholders' Meeting of May 4, appointed Fulvio Conti as Chairman of the Company.
The Chairman was only granted the powers provided for by law, the Articles of Association and the Company's corporate governance documents.
Below please find the description of the Chairman's compensation package decided by the Board of Directors on July 24, 2018 and on February 20,2019:
The Board of Directors' meeting of November 13, 2018, following the Director Amos Genish ceasing the role of Chief Executive Officer, assigned all powers to the Chairman of the Board of Directors who exercised them until the next Board of Directors' meeting of 18 November (which appointed Director Luigi Gubitosi as Chief Executive Officer).
No additional remuneration was paid for the aforementioned temporarily held powers.
Detailed analysis of the remuneration received is shown in Table 1 of the second part of this section.
TIM's Board of Directors' meeting held on March 22, 2018, acknowledged the resignation of the Executive Deputy Chairman (and Chairman of the Strategy Committee), Giuseppe Recchi, with immediate effect.
During the period in question, his remuneration (in addition to that received for the office of Director and/or member of Committees) totaled 45,000 euro gross per annum.
The Vice Executive Chairman did not receive any variable short-term remuneration.
Bearing in mind that the Executive Deputy Chairman was temporarily assigned organizational responsibility for the Security Department and responsibility for the governance of the wholly owned subsidiary Telecom Italia Sparkle S.p.A., he was paid an additional fee of 2017 10,000 euro gross per month, until his remuneration could be completely reviewed, that is, upon implementation of the governance arrangements designed to meet the requirements of the Golden Power rules. This temporary period remained valid until the appointment was terminated.
The detailed analysis of the remuneration received for the role is shown in Table 1 of the second part of this section.
TIM's Board of Directors' meeting held on March 22, 2018, having acknowledged the resignation of the Executive Deputy Chairman Giuseppe Recchi, with regard to the powers over the Security Department and over the Companies operations and assets of importance for national security and defense, appointed Franco Bernabè (already a member of the Strategic Committee) as Managing Director with similar powers regarding company security. The role of Vice Chairman was conferred on him, with the responsibilities set out in law and Statute.
No additional fixed and variable remuneration was acknowledged for the post of Deputy Chairman.
In the period, his remuneration was that of Director and member of the Strategic committee.
The detailed analysis of the remuneration received is shown in Table 1 of the second part of this section.
During the period in question, his gross salary as the Company's General Manager, amounted to 1,000,000 euro gross per annum, while his remuneration as Chief Executive Officer, pursuant to Article 2389, paragraph 3, of the Italian Civil Code, was fixed (confirmed downstream of renewal of the Board of Directors by the Shareholders' Meeting of May 4, 2018) at 400,000 euro gross per annum, exclusive of his remuneration for the position of Director and for his membership of the Strategy Committee. Furthermore, as remuneration pursuant to Article 2389, paragraph 3, of the Italian Civil Code, he was assigned an MBO totaling, at target, 1,400,000 euros per annum, gross.
Please note that considering that the TIM Group Ebitda at the minimum level (95% of budget target), valid as a condition for access to all other targets, was not reached, the entire MBO measure for 2018 was cancelled.
In implementing the present individual contract between Mr. Genish and the Company, and following the launch of the Long-term Incentive Plan 2018-2020, decided by the Board of Directors at its meeting held on July 24, 2018, Mr. Genish was assigned the right to receive 16,666,667 TIM S.p.A ordinary shares, at target, for the two years 2019-2010. Depending on the degree to which performance targets for the three-year period 2018-2020 are met, this number may be reduced or may be raised up to a maximum of 26,666,667 shares.
On November 13, 2018, the Board of Directors of TIM revoked all attributions granted to the director Amos Genish and appointed the Chairman Fulvio Conti to finalize further fulfilments related to the employee relationship, which was then terminated as of November 14, 2018.
For termination of his employment, Mr. Genish was paid the final additional amounts due and the severance pay due under law and national labor agreement (severance pay, holiday pay, thirteenth month payments) and, for the office held, a fixed sum to cover the costs of housing, schooling, transport and travel, as agreed in his individual contract with the Company, as reported in last year's Remuneration Report.
Mr Genish is not due anything as an MBO (as above), nor for the Long-term Incentive 2018-2020 (as per Plan Regulation).
The detailed analysis of the remuneration received is shown in Table 1 of the second part of this section.
The Company's Board of directors, at its meeting held on November 18, 2018, appointed Luigi Gubitosi as Chief Executive Officer, and at the same time hired him as a manager on a permanent employment contract, appointing him General Manager.
During the period in question, gross remuneration for his employment by the Company amounts to 1,000,000 per annum, gross, while a fixed sum of 400,000 euros per annum, gross, was awarded to him as remuneration pursuant to Article 2389, subsection 3, of the Italian Civil Code (excluding remuneration for serving as a Director, pursuant to Article 2389, subsection 1, of the Italian Civil Code, and for membership of the Strategy Committee). For the same purpose, he was also attributed an MBO, a target amount 1,400,000 euros gross for year 2019.
As part of the Long-term Incentive 2018-2020 Plan, Mr Gubitosi was attributed - for the 2019-2020 period, the right to receive 10,980,392 ordinary TIM S.p.A. shares free of charge at target level. Depending on the degree to which performance targets for the three-year period 2018-2020 are met, this number may be reduced or may be raised up to a maximum of 19,215,686 shares.
The detailed analysis of the remuneration received is shown in Table 1 of the second part of this section.
The fixed remuneration of the Key Managers with Strategic Responsibilities comprises the gross annual remuneration in respect of their employment.
Considering that the TIM Group Ebitda at the minimum level (95% of budget target), valid as a condition for access to all other targets, was not reached, the entire MBO measure for 2018 was cancelled.
Please also note that, during the 2018 salary review, the lump sum instrument was not applied to Key Managers with Strategic responsibilities.
Details of the remuneration of Key Managers with Strategic Responsibilities during the year 2018 are set out in table 1 in the second part of this section.
At December 31, 2018, Key Managers with Strategic Responsibilities could exercise 1,077,126 options (valid up to 24/3/2020) for the subscription of TIM ordinary shares, as reported in detail in table 2 in the second part of this section.
At December 31, 2018, Key Managers with Strategic Responsibilities were the recipients of bonuses totaling 1,000,000 euro (800,000 euro of which represented by 1,025,640 TIM S.p.A. ordinary shares), as detailed in tables 3A and 3B in the second part of this section.
Without prejudice to the provisions of the Plan Regulations, the bonus will be paid, in both cash and shares, after the board has approved the financial statements for 2019 (in 2020).
Following the launch of the 2018-2020 Long-Term Incentive Plan, decided by Telecom Italia's Board of Directors at its meeting held on July 24, 2018, Key Managers with Strategic Responsibilities in office on December 31, 2018, were eligible to receive 13,357,139 TIM S.p.A ordinary shares free of charge, at target. Depending on the degree to which performance targets for the three-year period 2018-2020 are met, this number could reduce or raise up to a maximum of 20,035,707 shares. The Plan's contact persons are detailed in Table 3A in the second part of this section.
The remuneration due to all the individuals who, during the financial year 2018, or a part thereof, held the position of member of the Board of Directors, of member of the management and control body, or Manager with Strategic Responsibilities (for this last category the information is shown in aggregate form) are shown below.
| (in thousands of euros) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
| Variable remuneration non equity |
Indemnit | ||||||||||||
| Remunerati on for taking part |
Partici | Non monet |
Fair Value | y for end of office or end of |
|||||||||
| Not | Name and | Period of office |
Expiry of office |
Fixed remuner |
in committee |
Bonuses and other |
pation sharin |
ary benefi |
Other remuner |
of compensati |
working relations |
||
| es | surname | Position | (dd.mm) | (mm.yy) | ation | s | incentives | g | ts | ation | TOTAL | on equity | hip |
| 1 | Fulvio Conti | Chairman | 07,05 12,31 |
12,20 | 392 | 392 | |||||||
| 2 | Luigi Gubitosi |
Chief Executive Officer General Manager |
18.11 12,31 |
12.20 | 168 | 168 | |||||||
| 3 | Amos Genish | Chief Executive Officer General Manager |
05,07 11,13 01,01 11,14 |
12,20 | 1,065 | 112 | 30 | 1,207 | |||||
| 4 | Luigi Gubitosi |
Director | 05,04 17,11 |
12,20 | 54 | 35 | 89 | ||||||
| 5 | Amos Genish | Director | 01,01 12,31 |
12,20 | 16 | 16 | |||||||
| 6 | Afredo Altavilla |
Director | 05,04 12,31 |
12,20 | 66 | 37 | 103 | ||||||
| 7 | Paola Bonomo |
Director | 05,04 12,31 |
12,20 | 66 | 25 | 91 | ||||||
| 8 | Giuseppina Capaldo |
Director | 05,04 12,31 |
12,20 | 66 | 37 | 103 | ||||||
| 9 | Maria Elena Cappello |
Director | 05,04 12,31 |
12,20 | 66 | 16 | 82 | ||||||
| 10 | Massimo Ferrari |
Director | 05,04 12,31 |
12,20 | 66 | 44 | 110 | ||||||
| 11 | Paola Giannotti |
Director | 05,04 12,31 |
12,20 | 66 | 41 | 107 | ||||||
| 12 | Marella Moretti |
Director | 05,04 12,31 |
12,20 | 66 | 41 | 107 | ||||||
| 13 | Lucia Morselli |
Director | 05,04 12,31 |
12,20 | 66 | 28 | 94 | ||||||
| 14 | Dante Roscini |
Director | 05,04 12,31 |
12,20 | 66 | 16 | 82 | ||||||
| 15 | Arnaud Roy de Puyfontaine |
Director | 05,04 12,31 |
12,20 | 66 | 16 | 82 | ||||||
| 16 | Rocco Sabelli | Director | 05,04 12,31 |
12,20 | 66 | 41 | 107 | ||||||
| 17 | Michele Valensise |
Director | 05,04 12,31 |
12,20 | 66 | 48 | 114 | ||||||
| Total Board of Directors(a) | 2,487 | 425 | 112 | 30 | 3,054 |
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable remuneration non equity |
Indemnit | ||||||||||||
| Remunerati | y for end | ||||||||||||
| on for taking part |
Partici | Non monet |
Fair Value | of office or end of |
|||||||||
| Period of | Expiry of | Fixed | in | Bonuses | pation | ary | Other | of | working | ||||
| Note s |
Name and surname |
Position | office (dd.mm) |
office (mm.yy) |
remuner ation |
committee s |
and other incentives |
sharin g |
benefi ts |
remuner ation |
TOTAL | compensati on equity |
relations hip |
| 18 | Arnaud Roy de Puyfontaine |
Chairman Executive |
01,01 04,24 |
12,19 | 288 | 288 | |||||||
| 19 | Giuseppe Recchi |
Executive Deputy Chairman |
01,01 03,22 |
12,19 | 38 | 38 | |||||||
| 20 | Amos Genish | Chief Executive Officer |
01,01 04,24 |
12,19 | 128 | 128 | |||||||
| 21 | Giuseppe Recchi |
Director | 01,01 03,22 |
12,19 | 25 | 9 | 13 | 47 | |||||
| 22 | Camilla Antonini |
Director | 01,01 04,24 |
12,19 | 35 | 14 | 49 | ||||||
| 23 | Franco Bernabè |
Director | 01,01 05,04 |
12,19 | 38 | 9 | 47 | ||||||
| 24 | Ferruccio Borsani |
Director | 01,01 05,04 |
12,19 | 38 | 14 | 52 | ||||||
| 25 | Francesca Cornelli |
Director | 01,01 05,04 |
12,19 | 38 | 15 | 53 | ||||||
| 26 | Lucia Calvosa |
Director | 01,01 05,04 |
12,19 | 53 | 22 | 75 | ||||||
| 27 | Frédéric Crépin |
Director | 01,01 04,24 |
12,19 | 35 | 21 | 56 | ||||||
| 28 | Dario Frigerio |
Director | 01,01 05,04 |
12,19 | 38 | 9 | 47 | ||||||
| 29 | Felicité Herzog |
Director | 01,01 04,24 |
12,19 | 35 | 14 | 49 | ||||||
| 30 | Anna Jones | Director | 01,01 04,24 |
12,19 | 35 | 19 | 54 | ||||||
| 31 | Marella Moretti |
Director | 01,01 04,24 |
12,19 | 35 | 14 | 49 | ||||||
| 32 | Hervé Philippe |
Director | 01,01 04,24 |
12,19 | 35 | 13 | 48 | ||||||
| 33 | Danilo Vivarelli |
Director | 01,01 05,04 |
12,19 | 38 | 14 | 52 | ||||||
| Tota Board of Directors(b) | 932 | 187 | 13 | 1,132 | |||||||||
| TOTAL BOARD OF DIRECTORS (a+b) | 3,419 | 612 | 112 | 30 | 13 | 4,186 |
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Remunerati on for taking part |
Variable remuneration non equity |
Partici | Non monet |
Fair Value | Indemnit y for end of office or end of |
||||||||
| Not | Name and | Period of office |
Expiry of office |
Fixed remuner |
in committee |
Bonuses and other |
pation sharin |
ary benefi |
Other remuner |
of compensati |
working relations |
||
| es | surname | Position | (dd.mm) | (mm.yy) | ation | s | incentives | g | ts | ation | TOTAL | on equity | hip |
| 34 | Roberto | Chairman | 01,01 04,24 |
12,17 | 44 | 44 | |||||||
| Capone | 04,24 12,31 |
12,20 | 92 | 92 | |||||||||
| 35 | Giulia De Martino |
Standing Auditor |
04,24 12,31 |
12,20 | 65 | 65 | |||||||
| 36 | Anna Doro | Standing Auditor |
04,24 12,31 |
12,20 | 65 | 65 | |||||||
| 37 | Marco Fazzini |
Standing Auditor |
04,24 12,31 |
12,20 | 65 | 65 | |||||||
| 38 | Francesco Schiavone Panni |
Standing Auditor |
04,24 12,31 |
12,20 | 65 | 65 | |||||||
| 39 | Vincenzo Cariello |
Standing Auditor |
01,01 04,24 |
12,17 | 31 | 31 | |||||||
| 40 | Gabriella Chersicla |
Standing Auditor |
01,01 04,24 |
12,17 | 31 | 31 | |||||||
| 41 | Gianluca Ponzellini |
Standing Auditor |
01,01 04,24 |
12,17 | 31 | 31 | |||||||
| 42 | Ugo Rock | Standing Auditor |
01,01 04,24 |
12,17 | 31 | 31 | |||||||
| Total Board of Statutory Auditors (c) | 520 | 520 |
| (in thousands of euros) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
| Variable remuneration non equity |
Indemnit | ||||||||||||
| Not es |
Name and surname |
Position | Period of office (dd.mm) |
Expiry of office (mm.yy) |
Fixed remuner ation |
Remunerati on for taking part in committee s |
Bonuses and other incentives |
Partici pation sharin g |
Non monet ary benefi ts |
Other remuner ation |
TOTAL | Fair Value of compensati on equity |
y for end of office or end of working relations hip |
| statements | Remuneration in the company drawing up the financial | 3,400 | 303 | 142 | 5 | 3,850 | 2,750 | ||||||
| Remuneration from subsidiaries | 617 (2) |
627 (3) |
152 | 1,396 | 2,389 | ||||||||
| Total Key Managers with Strategic Responsibilities (d) | 4,017 | 930 | 142 | 157 | 5,246 | 5,139 | |||||||
TOTAL REMUNERATION PAID IN 2018 (a+b+c+d) 7,956 612 1,042 172 170 9,952 5,139
(1) Remuneration refers to those who during 2018 held, even for a fraction of a period, the position of Key Manager with Strategic Responsibilities (16 managers).
(2) The amounts related to local labor contracts were converted at the average exchange rate of 2018 as at 06/30/2018 (Real/€ 4.14011) and as at 12/31/2018 (Real/€ 4.30628).
(3) The amounts refer to the local bonuses of 1,190,000 and 583,000 Real respectively, converted at the average rate of exchange for 2019 at 02/28/2019 (Real/€ 4.25213).
col. 1 The amount refers to the fixed remunerations pursuant to Art. 2389 paragraph 3 of the Italian Civil Code received for the position of Chairman for the period 05/07 – 12/31/2018. The Chairman does not receive any remuneration as a Director, or as member of the Strategy Committee (pursuant to Article 2389, paragraph 1, of the Italian Civil Code).
col. 1 The amount includes the remuneration as employee (€/000 119) for the period in which he held the position of General Manager 11/18 – 12/31/2018 and the fixed remuneration pursuant to Art. 2389 paragraph 3 Italian Civil Code (€/000 49) for the period he held the position of Chief Executive Officer 11/18 – 12/31/2018. The Chief Executive Officer does not receive remuneration for the office of Director or for his membership of the Strategy Committee (pursuant to Art. 2389, subsection 1 of the Italian Civil Code).
col. 1 The amount refers to the remuneration received as Director for the period 25/04 – 03/05/2018 (€/000 2) and for the period 11/14 – 12/31/2018 (€/000 14).
col. 1 The amount refers to the fixed remuneration pursuant to Art. 2389 paragraph 3 of the Italian Civil Code received for the position of Executive Chairman for the period 01/01 – 04/24/2018. In the period in which he fulfilled the role, the Executive Chairman did not receive remuneration for the office of Director or for his membership of the Strategy Committee (pursuant to Art. 2389, subsection 1 of the Italian Civil Code).
col. 1 The amount includes the fixed remuneration pursuant to Art. 2389 paragraph 3 Italian Civil Code received for the office of Deputy Executive Chairman (€/000 10) and the additional remuneration acknowledged for the organizational responsibility of the Security Function (€/000 28) for the period 01/01 – 03/22/2018.
col. 1 The amount refers to the fixed remuneration pursuant to Art. 2389 paragraph 3 of the Italian Civil Code received for the position of Chief Executive Officer for the period 01/01 –04/24/2018. In the period in which he fulfilled the role, the Chief Executive Officer did not receive remuneration for the office of Director or for his membership of the Strategy Committee (pursuant to Art. 2389, subsection 1 of the Italian Civil Code).
col. 1 The amount refers to remuneration received as Chairman of the Board of Statutory Auditors.
col. 1 The amount refers to the remuneration received as Standing Auditor.
col 1 The amount refers to the remuneration received as Standing Auditor.
| Date: 12/31/2018 | ||||||
|---|---|---|---|---|---|---|
| In the company drawing up the financial statements | In subsidiaries and associates |
|||||
| Name and surname | A | TOTAL | ||||
| Position | B | Chief Executive Officer |
Key Managers with Strategic Responsibilities |
Key Managers with Strategic Responsibilities |
||
| Plan and respective resolution |
1 | Plan Stock Option 2014-2016 04/16/2014 |
Stock Option 2016 11/08/2016 |
|||
| 2 | Number of options | 1,704,571 | 632,184 | 2,336,755 | ||
| Options held at the beginning of the financial year |
3 | Strike price | €0.94 € 1.01 €1.15 |
R\$ 8.0977 (2) |
||
| 4 | Possible exercise period (from/to) |
2017/2020 | 2017-2022 | |||
| 5 | Number of options | |||||
| 6 | Strike price | |||||
| Options allocated | 7 | Possible exercise period (from/to) |
||||
| during the financial year |
8 | Fair value on allocation date |
||||
| 9 | Allocation date | |||||
| 10 | Market price of underlying options on allocation of options |
|||||
| 11 | Number of options | |||||
| Options exercised during the financial year |
12 | Strike price | ||||
| 13 | Market price of underlying options on exercise date |
|||||
| Options expired during the financial year |
14 | Number of options | 627,445 (1) |
632,184 (3) |
1,259,629 | |
| Options held at the end of the financial year |
15 | (15)=(2)+(5)-(11)- (14) |
1,077,126 | 1,077,126 | ||
| Options for the year | 16 | Fair value |
(1) Balance between those options held at the time of sale, and those held at the time of entering/exiting the category of Key Managers with Strategic Responsibilities.
(2) The price exercised may be corrected based on conditions established in the plan.
(3) Options are acknowledged in cash based on the spread between the Exercise price and the average value of shares ON TIMP3, weighted for the volume negotiated, in the negotiation sessions of the 30 days prior to the transfer date.
| Date: 12/31/2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| In the company drawing up the financial statements | In subsidiaries and associates |
|||||||
| Name and surname |
A | Amos Genish | Luigi Gubitosi | |||||
| Position | B | Chief Executive Officer | Key Managers with Strategic Responsibilities |
Key Managers with Strategic Responsibilities |
TOTAL | |||
| Plan and respective resolution |
1 | Long-term Incentive 2018-2020 |
Special Award year 2016 component |
Long-term Incentive Plan 2018-2020 |
Long-term Incentive Plan 2018-2020 |
|||
| Financial instruments assigned in previous financial years not vested during the |
2 | Number and type of financial instruments |
Entitlement to the free assignment of TIM ordinary shares of a value equal to 80% of the maximum bonus of 15,000,000 |
|||||
| financial year |
3 | Vesting period | Financial year 2016 |
|||||
| 4 | Number and type of financial instruments |
26,666,666 Performance Shares |
19,215,686 Performance Shares |
20,035,707 Performance Shares |
208,231 shares Plan 2018 |
66,126,290 | ||
| Financial instruments assigned |
5 | Fair value on allocation date |
€ 7,824,667 | € 3,512,627 | € 6,062,362 | € 17,399,656 | ||
| during the financial |
6 | Vesting period | 2018-2020 | 2019-2020 | 2018-2020 | 3 years | ||
| year | 7 | Allocation date |
07/24/2018 | 11/18/2018 | 07/24/2018 | 04/20/18 | ||
| 8 | Market price on allocation |
€0.608 | €0.526 | €0.608 | R\$ 14.4071 | |||
| Financial instruments vested during the financial year and not assigned |
9 | Number and type of financial instruments |
26,666,666 (1) |
26,666,666 | ||||
| Financial instruments vested during the |
10 | Number and type of financial instruments |
19,215,686 | 20,035,707 | 208,231 (3) |
39,459,624 | ||
| financial year and assigned |
11 | Value on vesting date |
||||||
| Financial instruments for the year |
12 | Fair value | (2) | € 1,045,235 | € 1,045,235 |
(1) Mr. Genish was not acknowledged anything as Long-term Incentive 2018-2020 (as per Plan Regulation).
(2) There are no charges entered in the income statement for the financial year 2018, since Mr. Gubitosi is a recipient of the 2019-2020 plan.
(3) The shares, cancelled, were acknowledged in cash based on the number of months worked.
(in thousands of euros)
| A | B | 1 | 2 3 |
4 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Position | Plan | Bonus for the year | Bonus for previous years | Other Bonuses |
||||||
| (a) | (b) | (c) | (a) | (b) | (c) | ||||||
| Payable/Paid | Deferred | Deferral period |
No longer payable |
Payable/Paid | Still Deferred |
||||||
| Amos Genish | Chief Executive Officer |
MBO 2018 BoD Resolution 05/16/2018 |
(1) | ||||||||
| 112 | |||||||||||
| Remuneration in the company drawing up the 112 financial statements |
|||||||||||
| Remuneration in subsidiaries and associates | |||||||||||
| TOTAL | 112 |
(1) Considering that the TIM Group Ebitda at the minimum level (95% of budget target), valid as a condition for access to all other targets, was not reached, the entire MBO measure for 2018 was cancelled.
(in thousands of euros)
| B | 1 | 2 | 3 | 4 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Position | Plan | Bonus for the year | Bonus for previous years | Other Bonuses |
||||
| (a) | (b) | (c) | (a) | (b) | (c) | ||||
| Payable/Paid | Deferred | Deferral period |
No longer payable |
Payable/Paid | Still Deferred |
Key Managers with Strategic Responsibilities
| MBO 2018 05/10/2018 |
(1) | ||||
|---|---|---|---|---|---|
| Remuneration in the company drawing up the financial statements |
Special Award 2016 06/20/2017 |
90 (2) |
200 | ||
| 303 | |||||
| MBO 2018 08/18/2018 |
280 (3) |
||||
| Remuneration in subsidiaries and associates |
Long-term Bonus 2018 04/20/2018 |
137 (3) |
|||
| 210 (4) |
|||||
| TOTAL | 417 | 90 | 200 | 513 |
(1) Considering that the TIM Group Ebitda at the minimum level (95% of budget target), valid as a condition for access to all other targets, was not reached, the entire MBO measure for 2018 was cancelled.
(2) Of which (€ 50,000) as a result of assignments, and (€ 40,000) as a result of leaving the Key Managers with Strategic Responsibility category.
(3) The amounts refer to the local bonuses of 1,190,000 and 583,000 Real respectively, converted at the average rate of exchange for 2019 at 02/28/2019 (Real/€ 4.25213).
(4) The amount was converted to euro at the average rate of exchange for 2018 at 30/09/2018 (Real/€ 4.29236).
The table below shows the shareholdings held by all the individuals who during the financial year 2018, or a part thereof, held the position of member of the Board of Directors, of member of the Board of Statutory Auditors, or key manager with strategic responsibilities (for this last category the information is shown in aggregate form).
| Name and surname |
Position | Investee Company | Category of shares |
Number of shares owned at the end of the previous financial year (or on the date of appointment) |
Number of shares bought during the financial year |
Number of shares sold during the financial year |
Number of shares owned at the end of the financial year (or on the date of termination of office if earlier) |
||
|---|---|---|---|---|---|---|---|---|---|
| Board of Directors | |||||||||
| Fulvio Conti | Chairman | TIM S.p.A. | Ordinary | 12,503(*) | = | = | 12,503(*) | ||
| Luigi Gubitosi | Chief Executive Officer |
TIM S.p.A. | Ordinary | = | 1,000,000 | = | 1,000,000 | ||
| Alfredo Altavilla | Director | = | = | = | = | = | = | ||
| Paola Bonomo | Director | = | = | = | = | = | = | ||
| Giuseppina Capaldo | Director | = | = | = | = | = | = | ||
| Maria Elena Cappello | Director | = | = | = | = | = | = | ||
| Massimo Ferrari | Director | TIM S.p.A. TIM S.p.A. |
Ordinary Savings |
40,000 = |
50,000 46,000 |
= = |
90,000 46,000 |
||
| Amos Genish | Director | TIM S.p.A. | Ordinary | = | 1,000,000 | 1,000,000 | = | ||
| Paola Giannotti | Director | = | = | = | = | = | = | ||
| Marella Moretti | Director | = | = | = | = | = | = | ||
| Lucia Morselli | Director | = | = | = | = | = | = | ||
| Arnaud Roy de Puyfontaine |
Director | = | = | = | = | = | = | ||
| Dante Roscini | Director | = | = | = | = | = | = | ||
| Rocco Sabelli | Director | = | = | = | = | = | = | ||
| Michele Valensise | Director | TIM S.p.A. | Ordinary | 30,000 | = | = | 30,000 | ||
| Giuseppe Recchi | Deputy Chairman | = | = | = | = | = | = | ||
| Camilla Antonini | Director | = | = | = | = | = | = | ||
| Franco Bernabè | Director | = | = | = | = | = | = | ||
| Ferruccio Borsani | Director | = | = | = | = | = | = | ||
| Lucia Calvosa | Director | = | = | = | = | = | = | ||
| Francesca Cornelli | Director | = | = | = | = | = | = | ||
| Frédéric Crépin | Director | = | = | = | = | = | = | ||
| Dario Frigerio | Director | TIM S.p.A. | Ordinary | 600,000 | = | = | 600,000 | ||
| Félicité Herzog | Director | = | = | = | = | = | = | ||
| Anna Jones | Director | = | = | = | = | = | = | ||
| Hérvé Philippe | Director | TIM S.p.A. | Ordinary | 12,500 | = | = | 12,500 | ||
| Danilo Vivarelli | Director | = | = | = | = | = | = | ||
| Board of Statutory Auditors | |||||||||
| Roberto Capone | Chairman | = | = | = | = | = | = | ||
| Giulia De Martino | Standing Auditor | = | = | = | = | = | = | ||
| Anna Doro | Standing Auditor | = | = | = | = | = | = | ||
| Marco Fazzini | Standing Auditor | = | = | = | = | = | = | ||
| Francesco Schiavone Panni |
Standing Auditor | = | = | = | = | = | = | ||
| Vincenzo Cariello | Standing Auditor | = | = | = | = | = | = | ||
| Gabriella Chersicla | Standing Auditor | = | = | = | = | = | = | ||
| Gianluca Ponzellini | Standing Auditor | = | = | = | = | = | = | ||
| Ugo Rock | Standing Auditor | = | = | = | = | = | = | ||
| Key Managers with Strategic Responsibilities | |||||||||
| Telecom Italia S.p.A. | Ordinary | 76,025 | 76,025 | ||||||
| 16 | Tim Participações | Ordinary (**) | 55,645 | 55,645 |
(*) Number 12,500 AZO are owned by the spouse not legally separated.
(**) Shares listed on the NYSE and BOVESPA markets.
| Date: 12/31/2018 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FRAMEWORK 1 | ||||||||||||
| Financial instruments other than stock options | ||||||||||||
| Section 1 | ||||||||||||
| Instruments relating to currently valid plans, approved on the basis of previous resolutions of the Shareholders' Meeting | ||||||||||||
| Name or category | Position | Date of resolution by the Shareholder s' Meeting |
Types of financial instrument | Number of financial instruments allocated |
Allocation date |
Purchase price, if applicable , of the instrumen ts |
Purchase price, if applicable, of the instrument s |
Vesting period |
||||
| Amos Genish (1) | Chief Executive Officer |
04/24/2018 | Performance Share | 26,666,666 | 07/24/2018 | N.A. | €0.608 | 2018/2020 | ||||
| Luigi Gubitosi | Chief Executive Officer |
04/24/2018 | Performance Share | 19,215,686 | 11/18/2018 | N.A. | €0.526 | 2019/2020 | ||||
| Key Managers with Strategic Responsibilities |
04/24/2018 | Performance Share | 20,035,707 | 07/24/2018 | N.A. | €0.608 | 2018/2020 | |||||
| Key Managers with Strategic Responsibilities |
Special Award year 2016 component 25/05/2016 |
Rights to the free allocation of TIM ordinary shares in a number reflecting the overperformance of the financial year |
Countervalue equal to 80% of the maximum bonus of 15,000,000 euros |
06/19/2017 | N.A. | €0.836 | Financial year 2016 (2) |
(1) Mr. Genish was not acknowledged anything as Long-term Incentive 2018-2020 (as per Plan Regulation).
(2) The assignment of shares shall take place subject to provisions of the Plan's Rules, following approval by the Board of the financial statements for the year 2019 (year 2020).
| Date: 12/31/2018 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FRAMEWORK 2 | |||||||||||||
| Stock Option | |||||||||||||
| Section 1 | |||||||||||||
| Options relating to currently valid plans, approved on the basis of previous resolutions of the Shareholders' Meeting |
|||||||||||||
| Name or category |
Position | Date of resolution by the Shareholders' Meeting |
Description of instrument |
Options held | Options exercised |
Date of Assignment |
Strike price | Market price of underlyin g shares on date of allocation |
Possible exercise period (from-to) |
||||
| Key Managers with Strategic Responsibilities |
SOP 2014/2016 04/16/2014 |
Options to subscribe TIM ordinary shares are conditional upon achieving the three year performance objectives |
1,077,126 | 06/26/2014 | €0.94 | €0.93 | 2017-2020 | ||||||
| Other Executives of the Telecom Italia Group |
SOP 2014/2016 04/16/2014 |
Options to subscribe TIM ordinary shares are conditional upon achieving the three year performance objectives |
12,420,280 343,069 133,042 |
06/26/2014 03/02/2015 01/04/2016 |
€0.94 €1.01 €1.15 |
€0.93 €1.08 €1.127 |
2017-2020 2017-2020 2017-2020 |
A further 893,617 options may be exercised for the period 2017-2020 (strike price € 0.99 per share), assigned to the former Chief Executive Officer, Mr. Flavio Cattaneo.
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