Remuneration Information • Apr 6, 2018
Remuneration Information
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Remuneration Report 2018
We are an energy company.
We are working to build a future where everyone can access energy resources efficiently and sustainably. Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and in recognising that diversity across all aspects of our operations and organisation is something to be cherished. We believe in the value of long term partnerships with the countries and communities where we operate.
MISSION
Approved by the Board of Directors on 15th March 2018
The Report is published in the "Company/Governance" and "Publications" sections of the Company website (www.eni.com)
| Letter from the Chairman of the Remuneration Committee | 5 |
|---|---|
| Foreword | 6 |
| Executive summary | 7 |
| Remuneration policy 2018 | 9 |
| Summary indicators | 10 |
| Section I - Remuneration policy 2018 | 12 |
| Corporate governance | 12 |
| Bodies and parties involved | 12 |
| Eni Remuneration Committee | 12 |
| 2018 Remuneration Policy approval process | 15 |
| Engagement on Remuneration Policy | 15 |
| Purpose and general principles of the Remuneration Policy | 16 |
| Purpose | 16 |
| General principles | 16 |
| Remuneration Policy Guidelines 2018 | 17 |
| Market references and the Peer Group | 17 |
| Chairman of the Board of Directors | 18 |
| Non-Executive Directors | 18 |
| Chief Executive Ocer and General Manager | 18 |
| Managers with strategic responsibilities | 22 |
| Section II - Remuneration and other information | 24 |
|---|---|
| Implementation of the 2017 Remuneration Policies | 24 |
| Verication of 2016 performance for the purpose of incentives paid and/or awarded in 2017 | 24 |
| Verication of 2017 performance for the purpose of incentives vested and payable and/or awardable in 2018 |
25 |
| Remuneration paid and/or awarded in 2017 | 26 |
| Incentives vested and payable and/or awardable in 2018 | 28 |
| Remuneration paid in 2017 | 30 |
| Table 1 - Remuneration paid to Directors, Statutory Auditors, the Chief Executive Ocer and General Manager and to other Managers with strategic responsibilities |
31 |
| Table 2 - Monetary incentive plans for the Chief Executive Ocer and General Manager and for other Managers with strategic responsibilities |
33 |
| Table 3 - Incentive plans based on nancial instruments for the Chief Executive Ocer and General Manager and for other Managers with strategic responsibilities |
34 |
| Shareholdings held | 35 |
| Table 4 - Shareholdings held by Directors, Statutory Auditors, by the Chief Executive Ocer and General Manager and by other Managers with strategic responsibilities |
35 |
| Annex under Article 84-bis of Consob Issuers Regulation - 2017 Implementation of the 2017-2019 Long-Term Incentive Plan (LTI) |
36 |
| Table No. 1 of Schedule 7 of Annex 3A of Regulation No. 11971/1999 | 36 |
I am very pleased to present, on behalf of the Committee and of the Board, the annual Remuneration Report.
In the first section, the Report describes the Remuneration Policy planned for 2018, as prepared by the Committee established following the most recent appointment of the corporate bodies, the members of which are the Board members Pietro Guindani, Alessandro Lorenzi, and Diva Moriani. To them, and to Board member Karina Litvack, who has been called upon by the new Board to perform new duties, I extend my personal thanks for the important work they did during the previous term and over these last few months of joint effort. In 2017, upon completion of the preparatory work that began in 2016, the Committee first finalized the proposals related to revision of the variable incentive system for Eni senior management and, in particular, supported the Board in defining the new equity-based 2017-2019 Long-Term Share Incentive Plan. These proposals represented the main change in the 2017 Remuneration Policy and has been widely approved by shareholders (with 96.33% of those in attendance voting in favour). The Committee formed after appointment of the corporate bodies began working in April 2017, performing preliminary groundwork aimed at defining remuneration for Directors with delegated powers for the upcoming term (2017-2020) by reviewing developments in the regulatory framework and benchmarking remuneration levels and practices in relevant markets. To this end, the Committee took account of the end of the regulatory restrictions in
force at the beginning of the previous term concerning the remuneration of Directors with delegated powers of publicly controlled companies, assessing:
− with regard to the Chairman of the Board of Directors, the need to adapt remuneration to the complexity, powers and responsibilities of the position held, while also taking account of median remuneration levels in relevant markets, which is made up of the leading publicly listed Italian corporations;
− with regard to the Chief Executive Officer and General Manager, the need to readjust fixed remuneration so as to allow for the potential recovery, in total pay resulting from application of the variable incentive systems defined under 2017 policies, of the statutory reduction imposed during the previous term. In making this assessment, the Committee was supported by in-depth analyses of remuneration benchmarks conducted with the support of leading advisory firms. This enabled us to make a proposal balancing the need to provide Eni's Chief Executive Officer with a performance-based, competitive and motivating remuneration package, given the challenges successfully faced since 2014, and the need to maintain a profile of general consistency with the applicable market benchmarks in the international oil&gas industry, as well as with past Company practice.
The Committee's proposals concerning the remuneration of Directors with delegated powers were approved by the Board of Directors at the meetings of 19th June and 27th July 2017.
During the remainder of the year, the Committee's efforts focused on its annual plan. More specifically, given the great importance that Eni places on dialogue and interaction with investors, we implemented, with the support of the competent Company functions, a structured plan of meetings with leading institutional investors and proxy advisors. This was done in order to receive their feedback and evaluate their orientation
ANDREA GEMMA
for the purposes of defining the 2018 Remuneration Policy, receiving indications and suggestions to help us constantly improve this Report.
In light of the feedback received, as well as the Committee's assessment of the adequacy, overall consistency, and actual application of the 2017 Policy Guidelines, the update to the remuneration benchmark in the relevant market, and the monitoring of trends in market best practice, the Committee defined the proposals for 2018 Remuneration Policy, in line with those of 2017, while taking account of the decisions of the Board following the election of the corporate bodies.
These proposals were then submitted to the Board of Directors for approval on 15th March 2018 as described in the first section of this Report.
It is my hope that the decisions made, which are consistent with the remuneration policy framework approved by the previous Shareholders' Meeting, will be understood and appreciated, and I would like to thank you in advance, on behalf of the Committee as well as my own, for your support for the Remuneration Policy planned for 2018.
Chairman of the Remuneration Committee
This Report was approved by the Board of Directors on 15th March 2018, as per the recommendation of the Remuneration Committee, in accordance with applicable legal and regulatory requirements1 . It defines and illustrates:
The Policy described in the first section of the Report has been prepared in line with
the recommendations on remuneration of the Italian Corporate Governance Code for listed companies (the "Corporate Governance Code"), in the version last approved in July 2015, which Eni adopted4 , as well as with recent recommendations by the Corporate Governance Committee5 . The two sections of the Report are preceded by a summary ("Executive Summary") in order to provide an easily accessible overview of the key elements of the 2018 Policy.
The Executive Summary also provides some additional information in order to describe the context in which remuneration choices have been made (with reference to the performance and sustainability indicators, the results of the engagement process with leading proxy advisors and shareholders, the vote results on the Remuneration Report at the last Shareholders' Meetings). Finally, the Report lists the shareholdings held by Directors, Statutory Auditors, Chief Executive Officer and General Manager
and other Managers with strategic responsibilities6 and explains how the terms of the 2017-2019 Long-Term Incentive Plan were applied in 2017, in accordance with applicable regulation7 .
The text of this Report will be published no later than twenty-one days before the date of the 2018 Shareholders' Meeting at which investors will be invited to approve the 2017 financial statements as well as to vote on a non-binding resolution regarding the first section of the Report, in accordance with applicable regulation8 . The text of the Report is available at the Company's registered headquarters, on the Company website in the sections "Company/Governance" and "Publications", or via the website of the provider of disclosure and storage services for regulated information (available at ).
The documents relating to existing remuneration plans based on financial instruments are available in the "Company/Governance" section of the Company website.
(1) Art. 123-ter of Italian Legislative Decree 58/98 (Consolidated Law on Financial Intermediation) and Art. 84-quater of the Consob Issuers Regulation (Resolution No. 11971/99 and subsequent amendments and additions).
(2) Those persons who have the power and responsibility, directly or indirectly, for planning, directing and controlling Eni fall under the definition of "managers with strategic responsibilities", in accordance with Art. 65, paragraph 1-quater of the Issuers Regulation. Eni Managers with strategic responsibilities, other than Directors and Statutory Auditors, are those who sit on the Management Committee and, in any case, those who report directly to the Chief Executive Officer and to the Chairman of the Board of Directors. For more information on the organisational structure of Eni, see the "Company" section of the Company's website(www.eni.com).
(3) The remuneration policies of the subsidiaries will be determined in respect of the principle of their management autonomy, in particular for listed companies and/or those subject to regulation, as well as in accordance with the provisions of local legislation.
(4) For further information on the terms of adoption of Eni's Corporate Governance Code, please refer to the section "Company/Governance" on the Company website.
(5) Letter of the Chairman of the Committee to the Chairmen of the boards of Italian listed companies of 13 December 2017.
(6) See Art. 84-quater, fourth paragraph, of the Consob Issuers Regulation.
(7) Art. 114-bis of the Consolidated Law on Financial Intermediation and Art. 84-bis of the Consob Issuers Regulation.
(8) Art. 123-ter of Consolidated Law on Financial Intermediation, paragraph 6.
EXECUTIVE SUMMARY
The Eni Remuneration Policy is deliberated by the Board of Directors, following a proposal by the Remuneration Committee, which is entirely made up of Non-Executive, Independent Directors. It is defined in accordance with the corporate governance model adopted by the Company as well as with the recommendations of the Italian Corporate Governance Code. This Policy aims to align the interests of management with the prime objective of creating sustainable value for shareholders over the medium-to-long-term, in accordance with the guidelines defined in the Strategic Plan of the Company.
For purposes of this Report, the Remuneration Committee has taken into account the favourable vote of the 2017 Shareholders' Meeting, as well as the feedback received from shareholders regarding the 2017 Report. The Committee also gave due consideration to the governance and regulatory frameworks and best practices applied in other relevant markets, as well as best practices in remuneration reporting, both nationally and internationally, with the aim of providing the greatest clarity, completeness and accessibility of information. The 2018 Remuneration Policy does not contain substantial changes compared with the policy approved in 2017 for the 2017-2020 term9 and is characterised by the adoption of a new, simpler variable incentive system, based on:
consistent with the Strategic Plan and the expectations of shareholders, as measured by comparison with the performance achieved by a defined Peer Group.
The 2018 Policy also describes the remuneration approved by the Board of Directors elected by the Shareholders' Meeting of 13th April 2017 for Directors with delegated powers (Chairman and Chief Executive Officer and General Manager) and for Non-Executive Directors in relation to their participation on Board Committees, in the light of the principles and criteria provided for in the 2017 Remuneration Policy and in implementation of the applicable provisions of law and the By-laws11. The following table describes the main elements of the approved Guidelines for the remuneration of the Chief Executive Officer and General Manager, and the other Managers with strategic responsibilities (MSR).
(9) See 2017 Remuneration Report, Section I, chapter entitled Remuneration Policy Guidelines 2017 (page 17 et seq.).
(10) The conditions of the new Long-Term Incentive Plan are described in the section "Remuneration Policy Guidelines 2018 - Chief Executive Officer and General Manager- Variable remuneration: long-term share incentives" of this Report, as explained in more detail in the Information Document prepared in accordance with Art. 114-bis of Consolidated Law on Financial Intermediation and Art. 84-bis of the Issuers Regulation and available on the Company's website.
(11) Art. 2389, third paragraph, of the Civil Code and Art. 24 of the By-laws.
| TABLE 1 | PURPOSE | TERMS AND CONDITIONS | PRACTICE/AMOUNTS | PAGE REF. |
|---|---|---|---|---|
| REMUNERATION STRUCTURE AND MARKET BENCHMARKS |
Attract and retain individuals of high professional and managerial standing and motivate them to achieve challenging results |
2018 Policy confirms the same remuneration structure as approved in 2017, organised as follows: - Fixed remuneration -2018-2020 short-term monetary Incentive Plan with deferral of a portion of the incentive earned. -2017-2019 long-term share Incentive Plan, approved by the Shareholders' Meeting on 13th April 2017. -Non-monetary benefits and supplementary remuneration. All incentive plans are subject to clawback provisions under the same conditions as for 2017 Policy. Market benchmarks for comparing remuneration are defined within corporate and geographical groups similar to those where the Company operates, particularly in the international oil&gas industry and the Italian and European industrial sector. Comparisons have been conducted with the help of leading international advisory firms (Mercer, Willis Towers Watson, Korn Ferry-HayGroup). |
Market references CEO/GM: Similar roles within Eni's main competitors in the oil&gas industry (Peer Group): Anandarko, Apache, BP, Chevron, Conoco Phillips, ExxonMobil, Marathon Oil, Shell, Statoil and Total. MSRs: Roles of the same level of managerial complexity and responsibility within industrial corporations in national and international markets. |
17 |
| FIXED REMUNERATION |
Reward the skills, experience and contribution required in the assigned role |
Chief Executive Officer and General Manager (CEO/GM): Fixed remuneration is set in relation to the delegated powers assigned over the term and positions held, taking into account market benchmarks applicable to similar roles as well as the level of skill, experience and impact on company performance. Managers with strategic responsibilities (MSRs): Gross annual remuneration is based on the role assigned, in line with median levels in the reference market for roles of similar responsibility and complexity, taking into account the level of skills, experience and impact on company performance. |
CEO/GM: Total fixed remuneration set by the Board of Directors, based on a proposal of the Remuneration Committee and having heard the opinion of the Board of Statutory Auditors, is equal to a gross amount od €1,600,000, made up as follows: - Administrative office: gross fixed remuneration of €600,000 , including €80,000 for the position of member of the Board as approved by the Shareholders' Meeting. -Executive employment relationship (including position as General Manager): gross annual remuneration of €1,000,000 including any remuneration due for other positions held in subsidiaries/associates. MSRs: Gross annual remuneration for each position level within an interval of remuneration in line with median levels in the reference market. |
18 23 |
| SHORT-TERM INCENTIVE PLAN |
Motivate managers to achieve annual budget targets in a perspective of medium/long-term sustainability using a three-year deferral mechanism |
2018 targets for CEO/GM: 1) Economic and financial results: EBT (12.5%) and Free cash flow (12.5%) 2) Operating results and sustainability of economic results: hydrocarbon production (12.5%) and exploration resources (12.5%) 3) Environmental sustainability and human capital: CO2 emissions (12.5%) and Severity Incident Rate (SIR) (12.5%) 4) Efficiency and financial strength: ROACE (12.5%) and Debt/EBITDA (12.5%) 2018 targets for MSRs: Business and individual targets set on the basis of those assigned to the CEO/GM and the responsibilities assigned to them. Assessment Each target is measured in accordance with a performance scale of 70 ÷ 150 points (target= 100), in relation to its assigned weight. A score below 70 points implies a the performance equal to zero; the minimum incentive threshold is equal to an overall performance of 85 points. Incentive base Target result is defined as a percentage of fixed remuneration, and differs depending on the level of assigned role. Total Incentive award Determined in reference to performance levels achieved in previous year (between 85% and 150% of incentive base), based on a defined performance scale and made up of two components: -Portion paid annually, equal to 65% of the Total Incentive; -Deferred portion equal to 35%of the Total Incentive subject to further performance conditions during a three-year vesting period. The deferred portion payable at the end of the vesting period is determined as a function of the average of Eni annual performance results over the three-year deferral period, between 28% and 230% of the awarded deferred portion. |
CEO/GM Incentive base: 150% of total fixed remuneration. Payable annual portion (% of fixed remuneration): -threshold 83%; -target 98%; -max 146%. Payable deferred portion (% of fixed remuneration): -threshold 38%; -target 68%; -max 181%. MSRs Incentive base: up to 100% of fixed remuneration. Payable annual portion: up to 98% of fixed remuneration. Payable deferred portion: up to 121% of fixed remuneration. |
18 23 |
| 2017-2019 LONG-TERM SHARE INCENTIVE PLAN |
Align the behaviour of managers critical to the business(1) with shareholders interests and encourage sustainability and long term value creation |
The Plan provides for three annual awards of Company shares at the end of a three-year vesting period for each award, subject to achievement of specific performance conditions. Performance parameters - Difference between the TSR(2) of Eni and the TSR of the benchmark stock index, adjusted for the correlation coefficient (50%); - NPV of proven reserves(3) (50%); Performance measurement and Peer Group Performance is measured in relative terms as the average annual positioning achieved over the vesting period for each parameter compared with the companies in the peer group: Anandarko, Apache, BP, Chevron, Conoco Phillips, ExxonMobil, Marathon Oil, Shell, Statoil and Total, in line with the following incentive scale: 1st Place 180%; 2nd Place 160%; 3rd Place 140%; 4th Place 120%; 5th Place 100%; 6th Place 80% (median performance level); no incentive is paid for the 7th to 11th Place. The minimum performance threshold for the purposes of incentivation is 26.6%. Number of shares awarded Determined by the ratio between the monetary value (calculated as a percentage of fixed remuneration differentiated according to the level of the role), and the price of the award, calculated as the average of the daily prices recorded in the four months before the month in which the Board approves the award. Number of share granted at the end of the vesting period Determined applying a multiplier between zero and 180% of the number of awarded shares. Restricted shares/ Restriction period For senior managers still in service, 50% of the shares granted at the end of the vesting period are to remain restricted for one year from the granting date. |
CEO/GM Awarded shares: 150% of total fixed remuneration. Shares granted at the end of vesting period: Value as a percentage of fixed remuneration, between a threshold of 40% and a maximum value of 270% , net of the change in share price for the period. MSRs Awarded shares: Value of fixed remuneration, depending on the level of the role, up to 75% of fixed remuneration. Shares granted at the end of vesting period: Value as percentage of fixed remuneration, limited to a maximum of 135%, calculated with reference to the grant price of the shares, net of the change of in share price for the period. |
20 23 |
| NON-MONETARY BENEFITS |
Retain managers in the company, with a «total reward» approach |
Benefits defined in national collective bargaining processes and in supplementary Company-level agreements. | - Supplementary pension scheme - Supplementary healthcare scheme -Insurance - Automobile for business and personal use |
21-23 |
| PAYMENTS DUE IN THE EVENT OF TERMINATION OF OFFICE OR EMPLOYMENT |
Protect the Company from potential litigation associated with terminations |
2018 Remuneration Policy provides for the following: - administrative office (CEO) – an indemnity in the event of non-renewal of employment or early termination without just cause, as well as resignation prior to the expiry of the term justified by a reduction of delegated powers; - executive employment relationship (including the position as GM) – an indemnity in the event of consensual termination set in accordance with the Company parameters and policy, within the limits of the protections laid down by national collective bargaining agreement for senior managers. Indemnities are not due in the event of dismissal for «just cause» and resignation not justified by a reduction of delegated powers. |
CEO/GM - Administrative office: indemnity set at two years of fixed remuneration, for a total of €1,200.000, in accordance with European Commission Recommendation no. 385 of 30 April 2009; -Executive employment relationship: indemnity set at 2 years of fixed remuneration and short-term variable incentive. MSRs: Indemnities set within the limits of protection envisaged by applicable national collective bargaining agreement (CCNL), providing for a max. of 2 extra years in addition to notice (de facto 1 year of remuneration). |
22 23 |
| NON-COMPETITION AGREEMENTS |
Safeguard the company from competitive risks |
CEO/GM: 2018 Remuneration Policy maintains the non-competition agreement in place since 2014, which can be activated at the sole discretion of the Board through the exercise of an option right, with the following additions: - validity: 12 months post termination; -restricted markets: extended from exploration and production to include the midstream sector; -restricted nations: 18 countries with the addition of Mexico to those envisaged in the previous term (Algeria, Angola, Congo, Egypt, Ghana, Indonesia, Iraq, Italy, Kazakhstan, Libya, Mozambique, Nigeria, Norway, Russia, UK, USA, Venezuela); -additional confidentiality and non-solicit restrictions. MSRs: Non-competition clauses for cases of termination presenting high-competitive risks relating to the nature of the position. |
CEO/GM: Payment for the non-competition agreement calls for the retention of two components based on current remuneration levels and the extension of commitments undertaken: -a fixed component in the amount of €1,800,000; - a variable component to be determined by the Board of Directors, base on a recommendation of the Remuneration Committee, in line with the average annual performance over the previous three years: - Zero for performance below the target; - €500,000 for performance on target; - €1,000,000 for maximum performance. MSRs: Fees determined on the basis of the remuneration received and the duration and the scope of the agreements. |
22 23 |
(1) Managers who occupy positions that are more directly responsible for business performance or that are of strategic interest and who, at the date of award, are employees and/or in service with Eni and its subsidiaries.
(2) Total Shareholder Return measures the overall performance of a share, taking into account both price developments and distributed and reinvested dividends, over a specified period.
(3) Net Present Value of proven reserves is the present value of future cash flows generated by proven reserves net of future production and development costs, and taxes. It is calculated against a reference base defined by the Securities Exchange Commission on the basis of data published by oil companies in their official filings (Form 10-K and Form 20-F).
Dec 2017
2017
5.83
1.20
14.8
3,4983 3,7793 4,4203
Dec 2016
In 2011-2017, as shown in Chart 1, Eni delivered a Total Shareholder Return of 14.8%, compared with 11.7% in the Peer Group1 , while the FTSE Mib index produced a TSR of 63.2% compared with an average 86.5% for the peer companies' respective benchmark Stock market indices2 . Chart 2 shows the comparison between developments in TSR and total CEO/GM remuneration in 2012-2017.
The total remuneration of the Chief Executive Officer and General Manager for the 2017-2020 term, given at the target level in Chart 3, takes account of the lapse of the requirement for cuts in remuneration applied in the 2014-2017 term, as well as the median total remuneration benchmarks of the companies in the Peer Group, adjusted appropriately for the dimensions of Eni. More specifically, the remuneration policy for the current term envisages a greater focus compared with the previous term on the long-term variable component (53% vs. 46%). The pay mix is calculated considering the base salary as one hundred and the achievement of the target level for results and in the long-term variable component includes not only long-term incentives but also deferred incentives, using undiscounted values (nominal values at grant).
(1) Chart 3 shows the undiscounted values for the Long-Term components at the target performance level (nominal values).
(1) The Peer Group consists of ExxonMobil, Chevron, BP, Royal Dutch Shell, Total, ConocoPhillips, Statoil, Apache, Marathon Oil, Anadarko. (2) Benchmark indices: Standard Poor's 500, Cac 40, FTSE 100, AEX, OBX.
In 2017, Eni also achieved its environmental sustainability and safety goals, further reducing injury frequency both in terms of the Injury Frequency Rate (IFR) and the incidence of more serious injuries measured using the Severity Incident Rate (SIR), as shown in Chart 4. Emissions of greenhouse gases (GHG), as shown in Chart 5, as calculated in relation to gross hydrocarbon production on operations in the upstream sector also decreased. The following graphs report developments of injury rates and greenhouse emissions in 2012-2017.
CHART 4 - INJURY FREQUENCY RATE 1 AND SEVERITY
INCIDENT RATE 2 (employees and contractors) Severity Incident Rate (SIR) Injury Frequency Rate (IFR)
Greenhouse gas emissions/gross hydrocarbon production on operated basis (tCO2 eq/kboe)
The Shareholders' Meeting of April 13th, 2017, in accordance with the provisions of the applicable legislation (Art. 123-ter, paragraph six of Legislative Decree No. 58/98), issued an advisory vote on the first section of the 2017 Remuneration Report.
The overall percentage of participants voting in favour in 2017 was 96.33%, while the subset of institutional investors voting in favour came to 92.97%, in line with 2016 results. As shown in the following chart 6, the outcomes in the last five years of voting by the Shareholders' meeting on the Eni Remuneration Policy show an average of approval rate
(even among minority shareholders) of more than 90%. These results are the outcome of ongoing dialogue maintained with leading investors and proxy advisors in order to ensure maximum visibility and transparency of the Company's practices.
CHART 6 - RESULTS OF THE SHAREHOLDERS' MEETING VOTES ON THE 2013-2017 ENI REMUNERATION REPORT
Dec 2012
6,397
11
CHART 2 - PAY FOR PERFORMANCE ANALYSIS (Eni TSR vs. CEO/GM total remuneration for 2012–2017)1
4,555 4,0922
Dec 2014
(2) For 2014 xed remuneration is calculated as the sum of pro-rata amounts paid to the
(3) For 2015, 2016 and 2017, total remuneration also includes incentives accrued by the
Dec 2015
Dec 2013
outgoing CEO and to incoming CEO.
(1) Data from Table 1 of 2012-2017 Eni Remuneration report.
current CEO/GM in his previous role as GM of the E&P Division.
The Policy governing the remuneration of members of the Eni Board of Directors is defined in accordance with the provisions of law and the By-laws, according to which:
In line with Eni's corporate governance system12, the Board is also responsible for:
In line with the recommendations of the Italian Corporate Governance Code, the Board of Directors is supported by a Committee of independent Non-Executive Directors (the Remuneration Committee), which makes proposals and provides advice on remuneration issues.
The Eni Remuneration Committee was first established by the Board of Directors in 1996. Its composition and appointment, remit and terms of reference are governed by specific rules approved by the Board of Directors and published on the Company website13. The Committee is composed of three to four Non-Executive Directors, all of whom meet the definition of independence as set out in Italian law and the Italian Corporate Governance Code. According to the Committee's rules, the Committee may be composed of Non-Executive Directors, a majority of whom shall be independent, provided that in this case the Chairman is chosen from among the independent Directors. The Committee's rules also require that at least one of its members possess adequate knowledge and experience of financial matters or remuneration policies, as assessed by the Board at the time of his or her appointment (Art. 6.P.3).
Below are details of the composition and meetings of Committee in 201714.
1) Composition following renewal of corporate bodies (Board of Directors' decision on 13th April 2017 as announced in the press release of the same date). The Committee is entirely composed of Non-Executive and Independent Directors, pursuant to law and Corporate Governance Code.
2) Directors Guindani and Lorenzi have been appointed from the minority list.
The Chief Services & Stakeholder Relations Officer of Eni or, on his behalf, the Executive Vice President Compensation & Benefits, acts as Secretary to the Committee. The Secretary assists the Committee and its Chairman in the performance of their activities. In line with the recommendations of the Italian Corporate Governance Code (Art. 6.P.4 and Art. 6.C.5), the Committee performs the following consultative and advisory functions for the Board of Directors:
(12) For more information regarding the Eni corporate governance system, please refer to the "Corporate Governance Report" published in the "Company/Governance" section of the Company website. (13) The rules of the Remuneration Committee are available in the "Company/Governance" section of the Company's website.
(14) Total 2017 figures on previous and current composition of the Committee, following the election of the corporate bodies.
13
Furthermore, in exercising its functions, the Committee may issue opinions as required by Company procedures in relation to operations with related parties, in accordance with specified procedures.
According to its rules, the Committee meets as often as necessary to fulfil its functions, usually on the dates established in the annual meeting schedule approved by the Committee itself, and in the presence of at least the majority of its current members. The Chairman of the Committee calls and chairs the meetings; in case of absence or impediment, the meeting is chaired by the oldest attending member. The Committee decides with an absolute majority of those present; in the case of tied votes, the Committee Chairman has a casting vote. The Committee Secretary, who may be assisted in this function by the Executive Vice President Compensation & Benefits, produces the minutes of the meetings.
The Chairman of the Board of Statutory Auditors, or another Statutory Auditor designated by the Chairman, attends the meetings of the Committee; other Statutory Auditors may also attend the meetings. Meetings may be attended, at the invitation of the Chairman of the Committee on behalf the Committee, by the Chairman of the Board of Directors and the Chief Executive Officer; the meetings may also be attended by Managers of the Company or other persons, including other members of the Board of Directors, to provide information and feedback on specific agenda items. No Director and in particular no Director with delegated powers may take part in Committee meetings during which Board proposals relating to his or her remuneration are being discussed (Art. 6.C.6),
unless they are deemed proposals regarding all the members of the Committees established within the Board of Directors. The provisions applicable to the composition of the Committee shall remain applicable where the Committee is called upon to perform the duties required under the procedure for related-party transactions adopted by the Company.
The Committee has the right to access information and Company managers as necessary to perform its duties, and to make use of external consultants, whose independence is assured, within the terms and limits of the budget set by the Board of Directors (Art. 4.C.1, letter e; Art. 6.C.7).
The Committee shall report to the Board of Directors on the results of its meetings at each subsequent full Board meeting, in addition to providing half-yearly updates on the manner in which it has exercised its duties and the issues it has addressed (Art. 4.C.1, letter d).
In 2017, the Remuneration Committee, in its previous and current composition, met a total of 10 times, with an average attendance of 98% of its members and an average duration of 2 hours and 35 minutes.
At least one member of the Board of Statutory Auditors participated in each meeting as well as, following the renewal of corporate bodies, the Chairman of the Board of Auditors.
At the invitation of the Chairman of the Committee, the Chief Executive Officer and General Manager, Managers of the Company and advisors participated in specific meetings to provide information and clarifications requested by the Committee to pursue the enquiries conducted.
In the first part of the year, the Committee focused on the following topics:
| MONTHS | REMUNERATION | GOVERNANCE |
|---|---|---|
| January | - Approval of Report on the activities in the second half of 2016. - Review of relevant updates to legal and regulatory requirements governing Directors or Managers severance arrangements under Italy's national collective bargaining agreement (CCNL). |
|
| February | - Remuneration Policy: assessment of 2016 implementation, examination of remuneration benchmark studies, 2017 Policy Guidelines with focus on new Variable Incentive Plans for Management. - Management incentive plans: definition of 2017 performance targets and verification of 2016 results. - Implementation of Annual Variable Incentive Plan for CEO/GM. - Implementation of the Deferred Monetary Incentive Plan (2017 assignment) for the CEO/GM and the other managerial resources. |
- Drafting of Information Document on the new 2017-2019 Long-Term Share Incentive Plan. - Drafting and review of 2017 Remuneration Report (Sections I and II) to be approved by the Board of Directors before presentation to Eni Shareholders' Meeting. |
| March | - Engagement 2017: update on implementation of the plan conducted with leading institutional investors on remuneration issues and 1st voting projection. |
|
| May | - Presentation to Shareholders' Meeting of Remuneration Report and Information Document on the new 2017-2019 Long-Term Share Incentive Plan. - Update of Committee's Rules and plan of meetings (post appointment). |
|
| June | - Verification of 2016 performance results for the purposes of Long-Term Monetary Incentive Plan. - Formulation of proposals for the remuneration of Directors with delegated powers for the 2017-2020 term. |
|
| July | - Proposal of non-competition clauses for CEO/GM. - Information on remuneration paid to CEO/GM under 2014 LTI Plans. |
- Benchmark analysis of the 2017 Shareholders' Meeting vote results on the Remuneration Policy. - Approval of the Report on activities performed in the first half of 2017. |
| October | - Implementation of the 2017-2019 Long-Term Share Incentive Plan. |
- 2018 Engagement: plan review in the run up to the 2018 Shareholders' Meeting. - Monitoring developments in regulatory framework and in the voting policies of proxy advisors. |
| November | - Assessment of the 2017 Shareholders' Meeting results and scenario analysis for 2018. |
|
| December | - Benchmark studies of remuneration reports published in 2017 and definition of preliminary guidelines for 2018 Remuneration Report. - 2018 Engagement: information on the first engagement cycle with institutional investors and proxy advisors on remuneration issues. - Approval of 2018 programme of meetings. |
generally simplified variable incentive system, as discussed in greater detail in the 2017 Remuneration Report15;
Monetary Incentive Plan for the Chief Executive Officer and General Manager, as well as for other senior executives;
(16) As in 2016, the Short-Term Incentive Plan with deferral retains a structure focused on essential milestones balanced in respect of the interests of the various stakeholders. (17) The new Long-Term Plan was approved by the General Meeting of Shareholders on 13th April 2017; the related information document is available on the Company website.
(18) 2017 Remuneration Report, Section I, 2017 Remuneration Policy Guidelines, section "Long-Term Variable Incentive Plan" (page 19 et seq.).
(15) 2017 Remuneration Report, Executive Summary (page 6) and Section I, 2017 Remuneration Policy Guidelines, (page 15 and ff.).
15
(ix)definition, following the appointment of the corporate bodies, of the proposals for the remuneration of the Directors with delegated powers (Chairman - Chief Executive Officer and General Manager) for the 2017-2020 term, in particular with regard to the fixed component, consistently with the Eni 2017 Remuneration Policy and with the conditions of the 2017-2019 Long-Term Incentive Plan, approved by the Shareholders' Meeting of April 13th, 2017.
As regards further, important activities carried out during the second half of the year, the Committee:
The Committee scheduled eight meetings for 2018, three of which had already been held as of the date of approval of this Report, focusing on the following:
In 2018 the Committee will examine the vote results of the 2017 Shareholder's Meeting, and will implement the LTI Plan for the Chief Executive Officer and General Manager as well as – Managers with
strategic responsibilities, in accordance with the planned annual cycle of activities. For the purposes of developing the Remuneration Policy Guidelines for 2019, the following activities will also be performed: (i) monitoring developments in the applicable regulatory framework and the voting policies of institutional investors and leading proxy advisors; (ii) examining the findings of comparative studies of the Remuneration Reports published in 2018 in Italy and abroad; and (iii) definition of the programme of meetings with institutional investors and leading proxy advisors.
In performing its duties, the Remuneration Committee focused on defining the structure and contents of the Remuneration Policy, for the purposes of preparing this Report, specifically at meetings held on 5th December 2017, 25th January, 13th February and 5th March 2018, in accordance with the recommendations of the Italian Corporate Governance Code. In taking its decisions, the Committee reviewed the appropriateness, overall consistency and effective implementation of the Policy Guidelines approved for 2017. In preparing this Report, it also considered national and international disclosure standards for the preparation of the Remuneration report, as well as feedback received during meetings with leading international consultants and proxy advisor. The Committee also considered comparative remuneration studies prepared by independent international consultants in the preliminary analysis for the 2018 Remuneration Policy proposals. The 2018 Eni Remuneration Policy for Directors and other Managers with strategic responsibilities was approved by the Board of Directors at its meeting on 15th March 2018, following a proposal by the Remuneration Committee, alongside approval of this Report. Once approved, policies are implemented by management in accordance with instructions from the Board of Directors and with the assistance from relevant Company departments.
The Committee reports to the Shareholders' Meeting called to approve the financial statements on the manner in which it exercises its functions, through its Chairman or another member designated by the Chairman, in accordance with the recommendation of the Italian Corporate Governance Code (Art.6 - Comment) and with the aim of building a constructive dialogue with shareholders and investors. The Committee is informed of the annual engagement programme with main institutional investors and proxy advisor, devised by staff from Investor Relations and Compensation & Benefits, monitoring its outcome for the purposes of assessing the feedback received. Between the end of 2017 and the beginning of 2018, management held a first round of meetings with leading proxy advisors and institutional investors to acquire information on development in the guidelines and voting policies of investors and proxy advisors as well as receiving feedback on the Remuneration Report submitted to shareholders' vote in 2017. Overall, the Eni Remuneration Policy was considered balanced and the level of disclosure offered in the Report was also assessed as being in line with market best practice. A second round of meetings with interested investors may be organised after publication of this Report, in order to ensure broader understanding and provide any necessary clarifications on the 2018 Remuneration Policy Guidelines.
The plan for the 2018 Shareholders' Meeting envisages a series of meetings and/or conference calls with institutional investors and proxy advisors in order to promote direct communication with the market on issues addressed by the Committee.
Full information regarding remuneration of Directors and management is regularly updated and made available under the "Remuneration" heading19 of the "Company/Governance" section of the Company website.
The Eni Remuneration Policy is defined in accordance with the governance model adopted by the Company and with the recommendations of the Italian Corporate Governance Code (referred to below in the main principles and implementation criteria). The remuneration of Directors and Managers with strategic responsibilities is established in order to attract, motivate and retain individuals of high professional and managerial standing (Art. 6.P.1). CEO and Managers with strategic responsibilities remuneration is also aimed at ensuring the alignment of management interests with the primary goal of creating value for shareholders over the medium to long-term (Art. 6.P.2).
Eni's Remuneration Policy contributes to achieving the Company's mission and strategies, by:
In pursuing the above, the remuneration of Directors and Managers with strategic responsibilities is defined in line with the following principles and criteria:
Remuneration of Non-Executive Directors is commensurate with the effort required for participation on Board Committees set-up in accordance with the Articles of Association (Art. 6.P.2); appropriate differentiation between the remuneration afforded to Committee Chairmen and that of other Committee Members, considering the
different roles respectively held regarding coordination of work and relationships with Corporate bodies and managerial teams; Non-Executive Directors are not beneficiaries of variable incentive plans, including equity-based ones, unless decided otherwise by the Shareholders' Meeting (Art. 6.C.4).
The remuneration package is appropriately balanced between a fixed and a variable component, in relation to the strategic objectives and the risk management policy of the Company, taking due account of the business sector (Art. 6.C.1.a).
Total remuneration packages aim for consistency with standard market values applicable for positions or roles of similar level of responsibility and complexity, based on panels of relevant comparators that were developed through benchmarking analysis carried out by international remuneration advisors.
The fixed component is consistent with role and/or responsibilities, as well as adequate in the event the variable component is not delivered (Art. 6.C.1.c).
The variable component in defined within maximum limits (Art. 6.C.1.b), and is aimed at aligning remuneration with performance actually achieved.
Targets related to short and long-term variable remuneration, including equity-based compensation, are defined in a manner consistent with the four-year Strategic Plan and with the expectations of shareholders, in order to foster a strong focus on results.
Targets are defined in advance, measurable and mutually complementary in order to fully capture the priorities that underpin the Company's overall performance (Art. 6.C.1 letter d). These targets are defined so as to ensure:
Remuneration for executive roles with the greatest influence on business performance contains a significant percentage of
(20) For more information on the Code of Ethics, please refer to the Report on Corporate Governance and Ownership Structure 2017, available in the section Company/Governance of Eni website. (21) Policy approved by the Board of Directors on 28th July 2010.
(19) https://www.eni.com/en_IT/company/governance/remuneration.page.
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incentive components, particularly long-term awards (Art. 6.P.2). The vesting period and/or incentive deferral period are defined over a period of at least three years, in line with the long-term nature of the business activities performed and with the associated risk profile (Art. 6.C.1.e).
Equity-based compensation plans are designed to ensure alignment with shareholders expectations over the medium to long-term, by way of: three-year vesting periods, linkage with pre-determined and measurable performance targets, the provision of a lock-up period that applies to a proportion of share awards (Art. 6.C.2).
Incentive awards linked to remuneration delivered pursuant to a detailed verification process that assesses performance against assigned targets, net of the effects of exogenous variables22, on the basis of a variance analysis methodology approved by the Committee, in order to recognise actual value-added attributable to managerial actions.
The adoption, with specific Rules approved by the Board of Directors, acting on a proposal of the Remuneration Committee, of a mechanism that provides for the variable component of remuneration, if already paid and/or granted, to be reclaimed, and if still subject to deferral, to be withheld, in instances where results underpinning such awards were based on data that subsequently proved to be manifestly misstated (Art. 6.C.1.f).
Beneficiaries must also make restitution of all incentives for the year (or years) for which they have been found responsible for:
The Clawback Rules provides that the activation of recoupment claims (or withdrawal of incentives awarded but not yet paid) must take place, once appropriate verification has been completed, within three years of payment (or award) in cases of error, and within five years in cases of deliberate intent to defraud.
Non-monetary benefits are determined in line with relevant market comparators, consistent with local regulation, in order to complete and enhance the overall remuneration package, taking account of the roles and/or responsibilities, and allowing for relevant social security and insurance components.
To the extent that additional payments may be awarded upon termination of employment and/or term of office for executive roles, and that non-compete agreements may apply for roles at greater risk of "poaching", these are defined in terms of either a maximum amount or number of years of remuneration, in line with the remuneration received and the performance achieved, as per recommendations set forth in the implementation criteria (Art. 6.C.1.g) of the Italian Corporate Governance Code.
This section contains the 2018 Remuneration Policy Guidelines defined by the Board of Directors on 15th March 2018 for Directors and Managers with strategic responsibilities.
The 2018 Remuneration Policy Guidelines contain no substantial changes compared with what was previously described in the first section of the 2017 Remuneration Report examined by shareholders at the annual meeting of 13th April 2017, which was approved by favourable vote of 96.33% of those in attendance. In this section, we also present the remuneration for Directors with delegated powers (i.e. the Chairman and the Chief Executive Officer and General Manager), as recommended by the Remuneration Committee and having heard the opinion of the Board of Statutory Auditors, approved by the Board of Directors on 19th June and 27th July 2017. These resolutions were passed in line with the 2017 Remuneration Policy Guidelines and with the conditions of the 2017-2019 Long-Term Incentive Plan23.
The Board took account of the end of the previous restrictions concerning the reduction of remuneration for directors with delegated powers of listed companies that are controlled, directly or indirectly, by government entities24 and of the results of comparative remuneration analyses with similar panels.
For the Chief Executive Officer and General Manager, the positioning of the Company's remuneration is assessed by comparing similar roles only in the international oil&gas sector, with regard to upstream activities in particular and in line with the company's strategy to increase its focus on this segment of the business. More specifically, the comparator group includes the main listed companies in the oil&gas sector, which are Eni's competitors at the international level and possess comparable business characteristics (Anadarko, Apache, BP, Chevron, ConocoPhillips, ExxonMobil, Marathon Oil, Shell, Statoil, and Total). These companies also make-up the Peer Group used for the relative comparison of Eni's performance under the new Long-Term Incentive Share Plan.
(22) Exogenous variables are those events that, due to their nature or though Company choice, are not under the control of the managers, such as, for example, oil&gas prices or the euro/ dollar exchange rate.
(23) Plan approved by the shareholders on 13th April 2017 in accordance with Article 114-bis of the Consolidated Law on Financial Intermediation.
(24) Article 23-bis of Decree Law 201 of 6th December 2011 (ratified, with amendments, with Law 214 of 22th December 2011), paragraphs 5-quater to 5-sexies, introduced by way of Article 84-ter of Decree Law 69 of 21st June 2013 (ratified, with amendments, with Law 98 of 9th August 2013) and subsequently repealed by Legislative Decree 175 of 19th August 2016 (Consolidated Law on Corporations held by Government Entities).
For the Chairman and the Non-Executive Directors, the positioning of remuneration is assessed by comparing similar roles in the Top Italy panel, which is composed of the main companies listed on the FTSE MIB (Assicurazioni Generali, Atlantia, Enel, Intesa Sanpaolo, Leonardo, Luxottica, Mediaset, Mediobanca, Poste Italiane, Snam, Terna, TIM, and Unicredit).
For Managers with strategic responsibilities, the positioning of remuneration is assessed by comparing roles with the same level of managerial responsibility and complexity in national and international panels of companies within the industrial sector.
Comparisons of remuneration have been conducted with the help of the advisory firms Mercer, Willis Towers Watson, and Korn Ferry-Hay Group.
The 2018 Remuneration Policy Guidelines for the Chairman provide for total fixed remuneration of €500,000 gross, which includes €90,000 gross for the position, as determined by the Shareholders' Meeting of 13th April 2017, and for remuneration for exercise of delegated powers25 of €410,000 gross, as approved by the Board of Directors on 19th June 2017, taking account of the outcome of the comparative analyses of remuneration related to median levels in the benchmark market and the complexity of the position.
The 2018 Remuneration Policy provides also for a life insurance policy and a permanent disability insurance policy covering injury or illness contracted in the workplace or elsewhere. No specific severance payments are envisaged for the Chairman, nor do any agreements exist for indemnities in the case of resignation or early termination of office26.
The 2018 Remuneration Policy Guidelines for Non-Executive and/ or Independent Directors provide for the maintenance of additional annual remuneration27 for participating on Board Committees, as approved by the Board of Directors on 13th April 2017 and in line with the median levels in the reference market, taking due account of the commitment in terms of frequency and duration of meetings, as follows:
No specific severance payments are envisaged for Non-Executive Directors, nor do any agreements exist for indemnities in the case of resignation or early termination of office28.
The 2018 Remuneration Policy Guidelines for the Chief Executive Officer and General Manager of the Company are in line with the 2017 Remuneration Guidelines and reflect the decisions of the Board of Directors of 19th June and 27th July 2017 as well as the model of organization and corporate governance adopted by the Company. In particular, the 2018 remuneration policies take account of: (i) the end of the regulatory restrictions concerning the remuneration of directors delegated powers of listed companies subject to government control; (ii) the conditions of the 2017-2019 Long-Term Plan approved by the Shareholders' Meeting of 13th April 2017 in accordance with Article 114-bis of the Consolidated Law on Financial Intermediation; and (iii) the outcome of the comparative studies conducted by considering the total median remuneration of the companies within the Peer Group, appropriately compared to the dimensional characteristics of Eni.
Annual fixed remuneration (FR) approved by the Board of Directors on 19th June 2017 for the position of Chief Executive Officer and of General Manager totals €1,600,000 gross, which includes: (i) annual remuneration of €600,000 gross for the position of Chief Executive Officer, including annual remuneration of €80,000 gross for the position of member of the Board as approved by the Shareholders' Meeting of 13th April 2017; (ii) a base salary of €1,000,000 gross for the executive employment relationship as General Manager. This remuneration encompasses any emoluments due for participation in the meetings of the boards of directors of other Eni subsidiaries and/or shareholdings.
In his capacity as Senior Manager, the General Manager is also entitled to receive an allowance for travel, in Italy and abroad, in line with the applicable provisions under the relevant national collective bargaining agreement for senior managers of industrial companies and with supplementary company-level agreements.
The Short-term Incentive Plan with deferral, as approved by the Shareholders' Meeting of 13th April 2017 under the Remuneration Policy Guidelines and as described in the 2017 Remuneration Report, provides for a portion of the incentive to be paid annually and a portion to be deferred for three-year period as described below. The 2018 Short-Term Incentive with deferral is linked to the achievement of the 2017 objectives approved by the Board of Directors on 28th February 2017.
Achievement of the objectives is assessed net of the effects of exogenous variables (e.g. oil and gas prices or euro/dollar exchange rates) on the basis of a predetermined method of variance analysis as approved by the Remuneration Committee.
(25) Non-executive powers connected with the performance of a major role in the internal control system, managing the relationship between the head of the Internal Audit Unit and the Board. The Chairman also performs the representation duties set out in the By-laws, managing the Company's institutional relations in Italy in coordination with the Chief Executive Officer. (26) In consideration of the reference to this report in the 2017 Report on Corporate Governance and Ownership Structure, which is available in the Governance section of the Company's website, this information is being published in accordance with Article 123-bis, paragraph 1, letter i), of the Consolidated Law on Financial Intermediation (agreements between companies and directors, members of the control body or supervisory council which envisage indemnities in the event of resignation or dismissal without just cause, or if their employment contract should terminate as the result of a takeover bid).
(27) This remuneration supplements that approved by the shareholders on 13th April 2017 for Directors in the amount of €80,000 gross per year.
(28) Information provided in accordance with Article 123-bis, paragraph 1, letter i), of the Consolidated Law on Financial Intermediation, as specified under note 24 above.
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The 2018 objectives approved by the Board of Directors on 15th March 2018 for the 2019 short-term monetary incentive with deferral provide for maintenance of a structure that is focused on essential milestones in line with the Strategic Plan and balanced in respect of the interests of the various stakeholders. The structure and weighting of the different objectives are shown in the table below (Eni chart of annual objectives). The value of each objective, at the target performance level, is aligned with the budgeted value.
TABLE 3 - 2018 TARGETS FOR THE 2019 SHORT-TERM INCENTIVE PLAN WITH DEFERRAL
OPERATING RESULTS AND SUSTAINABILITY OF THE ECONOMIC RESULTS (25%)
EBT (12.5%) Free cash flow (12.5%) Hydrocarbon production (12.5%) Exploration resources (12.5%)
CO2 Emissions (12.5%) Severity Incident Rate (12.5%) FINANCIAL STRENGTH (25%) ROACE (12.5%) Debt/EBITDA (12.5%)
EFFICIENCY AND
In particular, with regard to the objectives of Environmental Sustainability and Human Capital, the use of the Severity Incident Rate (SIR) aims to focus Eni's commitment on reducing severe incidents, given that Eni has already achieved excellent results in terms of reducing the overall number of injuries. More specifically, SIR measures the frequency of total injuries recordable over the number of hours worked, assigning them increasing weights depending on the severity of the incident. In addition, maintaining the CO2 emissions target on operated production confirms Eni's strategic commitment to reducing the emission of greenhouse gases that are connected with climate change and is consistent with the target for 2025 announced to investors. In line with the general remuneration policy principles, the STI Plan features the characteristics described below. Each target is predetermined and measured in accordance with a performance scale of 70-150 points (target = 100) in relation to the weight assigned to each (a score below 70 points implies a performance multiplier of zero). For purposes of the total incentive award, the minimum overall performance is 85 points. The total incentive is determined in reference to a minimum multiplier (performance = 85), target multiplier (performance = 100) and maximum multiplier (performance = 150), equal, respectively, to 85%, 100% and 150%, to be applied in relation to the performance achieved by Eni over the previous year. The chart below shows the value of the multiplier as a function of performance.
The total incentive (TI) is calculated using the following formula:
TI = FR x ITarget x Multiplier
where "ITarget" is the incentive percentage at target performance level, which is set to 150% of total fixed remuneration for the Chief Executive Officer.
This incentive is divided into two portions:
1) a portion paid annually (Iannual) equal to 65% of the total incentive.
I Annual = 65% x TI
The levels of the portion of the incentive payable annually, depending on the performance levels achieved, are shown in the table below29.
| Annual performance | <85 | 85 threshold |
100 target |
150 max |
|---|---|---|---|---|
| Annual incentive (% of Fixed Rem.) |
0% | 83% | 98% | 146% |
2) A deferred portion (Ideferred) equal to 35% of the total incentive, subject to further performance conditions during a three-year vesting period, as shown in the figure below.
(29) The incentive values as a % of fixed remuneration shown in the table were calculated as follows: Threshold: 83% = 65% x (150% x 85%); Target: 98% = 65% x (150% x 100%); Max: 146% = 65% x (150% x 150%).
The deferred portion payable at the end of the vesting period is determined by multiplying the initial deferred portion by the payment multiplier given by the average of the annual multipliers recorded over the three-year period in relation to the performance achieved based on the chart of annual Eni objectives. The multiplier of the deferred portion depends on the performance achieved as shown below.
The Deferred Incentive (Ideferred) payable at the end of the three-year deferment period is calculated using the following formula:
The levels of the payable deferred portion, depending on the performance levels achieved throughout the three-year period, are shown in the table below30.
| TABLE 5 - LEVELS OF PAYABLE DEFERRED PORTION | |||||
|---|---|---|---|---|---|
| Average 3-year performance |
<85 | 85 threshold |
100 target |
150 max |
|
| Deferred incentive (% of Fixed Rem.) |
0% | 38% | 68% | 181% | where: |
The 2017-2019 Long-Term Share Incentive Plan approved by the Shareholders' Meeting of 13th April 2017, as described in the Remuneration Report and in the Disclosure Document published in 2017, ensures the following objectives in line with international best practice:
The Plan provides for three annual awards starting from 2017, each with a three-year vesting period, in accordance with the timeline below.
The Plan is subject to performance conditions during the three-year vesting period, in accordance with the following parameters and related weightings:
1) the difference between the TSR of Eni shares and the TSR of the FTSE MIB index of Borsa Italiana, adjusted by the Eni Correlation Coefficient, compared with the equivalent adjusted TSR measure for each company in the Peer Group, as shown in the following formula (50% weighting):
TSRco: TSR of Eni or of one of the companies of the Peer Group;
(30) The incentive values as a % of fixed remuneration shown in the table were calculated as follows: Threshold: 38% = 35% x (150% x 85%) x 85%; Target: 68% = 35% x (150% x 100%) x 130%;
Max: 181% = 35% x (150% x 150%) x 230%.
21
TSRIDX: TSR of the reference stock market index of the company to which TSRco applies;
ρco,IDX: correlation coefficient between the financial return of the share and the financial return of the reference market (FTSE MIB, S&P 500, FTSE 100, CAC 40, AEX, OBX).
This indicator was introduced in order to neutralize the potential effects of the performance of the respective stock market on the performance of each share. More specifically, this neutralisation is proportionate to the correlation between the share and the market over the same three-year period, by using the correlation coefficient.
2) Net Present Value (NPV) of proven reserves vs. the Peer Group, measured in terms of the annual percentage change, calculating the average annual performance over the threeyear period (50% weighting).
The reference Peer Group is described in the section "Market References and Peer Group" (Anadarko, Apache, BP, Chevron, ConocoPhillips, ExxonMobil, Marathon Oil, Shell, Statoil, and Total). For the Chief Executive Officer and General Manager, the Plan conditions provide for the annual award of shares for a value equivalent to 150% (Itarget) of total fixed remuneration (FR), using the following formula:
where the price of the award (PriceAttr) is calculated as the average of the daily official prices (source: Bloomberg) recorded in the four months before the date of the Board of Directors meeting that annually approves the plan rules and the award to the Chief Executive Officer and General Manager.
The granting of shares at the end of the three-year vesting period is determined using a final multiplier to be applied to awarded shares (calculated as the weighted average of the multipliers of each parameter) determined over the vesting period in relation to the position reached in the Peer Group.
Each multiplier may be between zero and 180%, with a threshold set at a median level, in accordance with the scale shown below.
TABLE 6 - PERFORMANCE SCALE - MULTIPLIER
| Ranking | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1° | 2° | 3° | 4° | 5° | 6° | 7° | 8° | 9° | 10° | 11° |
| Multiplier | ||||||||||
| 180% 160% 140% 120% 100% | 80% | 0% | 0% | 0% | 0% | 0% | ||||
| Median positioning |
Grantable shares are calculated using the following formula.
No. of granted shares = No. of awarded shares x Multiplier
The table below shows the thresholds, targets and maximum value of shares (as a percentage of fixed remuneration) grantable to the Chief Executive Officer and General Manager at the end of the vesting period, net of changes in share price over the same period31.
| Weighted average | <26.6 | 26.6 | 100 | 180 |
|---|---|---|---|---|
| 3-year performance | threshold(*) | target | max | |
| Value of Shares (% of Fixed Rem.) |
0% | 40% | 150% | 270% |
(*) Achieved, for example, if the NPV indicator of proven reserves reaches the minimal level (6th place) for at least two years.
For executives still in service, the rules of the Plan state that 50% of the shares granted at the end of the vesting period are to remain restricted for one year from the granting date.
The Remuneration Policy provides for a life insurance policy and a permanent disability insurance policy covering injury or illness contracted in the workplace or elsewhere, and, as per provisions contained in the national collective bargaining agreement and the supplementary company agreements for Eni senior managers, for enrolment in the supplementary pension plan (FOPDIRE32) and in the supplementary health plan (FISDE33) together with a company car for business and personal use.
The remuneration package for the Chief Executive Officer and General Manager includes a fixed component, a short-term variable component, and a long-term variable component, comprising a short-term incentive deferral and long-term share incentive valued using internationally recognized methodologies for remuneration benchmarks.
The pay mix, calculated by considering fixed remuneration as the base, is weighted significantly towards the variable components, with a dominant weighting attributed to the long-term component, as shown in the chart below.
(31) The incentive values as a % of fixed remuneration shown in the table were calculated as follows: Threshold: 40% = 150% x 26.6%;
(33) Fund that reimburses healthcare spending for active or retired senior management and their family members (www.fisde-eni.it).
(32) Defined-contribution and individual-capitalization contractual pension fund (www.fopdire.it).
For the Chief Executive Officer and General Manager, based on a proposal by the Remuneration Committee and having heard the opinion of the Board of Statutory Auditors, the Board of Directors resolved on 19th June 2017 to maintain the severance payments in the event of termination of office or of employment established in the 2017 Remuneration Policy Guidelines. These payments are as follows:
dismissal from the role of Chief Executive Officer for just cause. With reference to long-term incentives, in the event of early termination for the Chief Executive Officer and General Manager, due to resignation and not justified by a substantial reduction in powers or of dismissal for cause, all rights to the award and payment of incentives shall lapse. In the event of termination
related to expiry35 of the term on the Board of Directors without renewal, the long-term incentives awarded during the term shall vest in accordance with the terms and conditions established by the respective regulations.
In order to safeguard the company's interests from potential competitive risks related to the considerable international importance of the professional and managerial background of the Chief Executive Officer and General Manager, on 27th July 2017, the Board of Directors, based on the recommendation of the Remuneration Committee and having obtained a favourable opinion of the Board of Statutory Auditors, has also resolved to maintain the non-competition agreement in place since 2014, while extending the clause to geographical areas and industries that have taken on greater strategic importance over the last three years.
More specifically, the agreement, which can be activated at the sole discretion of the Board through the exercise of an option right36, has the following characteristics: (i) period of validity of 12 months post-termination; (ii) restricted markets extended from exploration and production to also include the midstream sector; (iii) 18 restricted Countries with the addition of Mexico to those that were envisaged during the previous term (Algeria, Angola, Congo, Egypt, Ghana, Indonesia, Iraq, Italy, Kazakhstan, Libya, Mozambique, Nigeria, Norway, Russia, UK, USA, Venezuela); (iv) additional confidentiality and non-solicitation restrictions. Payment for the non-competition agreement provides for mantaining two components calculated on the basis of current remuneration levels and the extension of commitments undertaken: (i) a fixed component in the amount of €1,800,000; (ii) a variable component to be determined by the Board of Directors, based on a recommendation by the Remuneration Committee, in line with the average annual performance over the previous three years, as follows: for performance below the target, this component will be equal to zero; for performance on target, it will be €500,000; and for maximum performance, it will be €1,000,000. The average annual performance shall be calculated on the basis of annual performance achieved under the Short-Term Monetary Incentive Plan.
For Managers with strategic responsibilities, the 2018 Remuneration Policy Guidelines are unchanged on those for 2017, maintaining remuneration plans that are strictly in line with those of the Chief Executive Officer and General Manager, to better guide and align managerial action with the objectives set out in the Company's Strategic Plan, and with the provisions and protections laid down by national collective bargaining agreement for senior managers.
In particular, the new Long-Term Share Incentive Plan and Short-Term Variable Incentive Plan with deferral – intended for the Chief Executive Officer and General Manager will also apply to Managers with strategic responsibilities.
(34) Information provided in accordance with Article 123-bis, paragraph 1, letter i), of the Consolidated Law on Financial Intermediation, as specified under note 24 above. (35) It should be noted that, under Italian law, directors of joint-stock companies may not be appointed for terms of longer than three financial years, and their terms expire on the date of the meeting of shareholders held to approve the financial report for the last financial year of their term (Article 2383, second paragraph, of the Italian Civil Code). (36) Payment of the option right, for a total of €500,000, was paid in full as reported on page 24 of Eni's 2015 Remuneration Report (Section II, Table 1, note 4 b).
Fixed remuneration is based on roles and responsibilities assigned taking into consideration a graduated and a generally median to below-median positioning versus national and international executive markets for comparable roles. It may be updated periodically, during the annual salary review for all managers. Given current market comparators and trends, the 2018 Guidelines provide for a selective approach to salary reviews, while maintaining appropriate levels to ensure competitiveness and motivation.
More specifically, the proposed actions will include measures to adjust fixed/one-off remuneration for those in positions that have seen a significant increase in responsibility or scope, and to address retention risk and reward excellent performance. In addition, in their capacity as Eni executives, Managers with strategic responsibilities are entitled to receive allowances due for travel in Italy and abroad, in line with applicable provisions of the Italian national collective bargaining agreement for senior managers and supplementary Company agreements.
Short-term Variable Incentive Plan with deferral The Short-Term Incentive Plan with deferral, already described for the Chief Executive Officer and General Manager, will be implemented in 2018.
The targets set for Managers with strategic responsibilities are consistent with those assigned to the Chief Executive Officer and General Manager, on the basis of the same balancing of stakeholder interests, in addition to relevant individual targets, consistent with the responsibilities of the role and the provisions of the Company's Strategic Plan. For Managers with strategic responsibilities, the target incentive levels for the Short-term Variable Incentive Plan differ depending on the role's level of responsibilities and complexity and is limited to a maximum of 100% of fixed remuneration, with a maximum incentive level payable for the annual and deferred portions of 98% and 121% of fixed remuneration, respectively.
Managers with strategic responsibilities participate in the 2017-2019 Long-Term Incentive Share Plan (LTI) approved by the Shareholders' Meeting on 13th April 2017.
The Plan is directed at managers who are critical for the business and envisages three annual awards, starting in 2017, with the same performance conditions and characteristics as those described above for the Chief Executive Officer and General Manager. For Managers with strategic responsibilities, the value of the shares to be awarded each year differs depending the level of their role and is limited to a maximum of 75% of fixed remuneration, with the maximum award corresponding to 135% of fixed remuneration, calculated with reference to the award price of the shares.
In line with national collective bargaining agreement and supplementary Company-level agreements for Eni managers, the Policy Guidelines provide for life and disability insurance cover (due to workplace or other injury or illness), as well as enrolment in the supplementary pension plan (FOPDIRE) and health plan (FISDE), together with a company car for business and personal use, and the possible assignment of housing based on operational and mobility requirements.
In line with market best practice, as well as the valuation methods used for the Chief Executive Officer and General Manager the average target pay mix of the remuneration package for Managers with strategic responsibilities who are eligible for the Short-Term Monetary Plan with deferral and the Long-Term Incentive Share Plan features a balance between fixed and variable components that is weighted towards medium-long term variable incentives.
Managers with strategic responsibilities, as well as Eni senior managers, are entitled to severance benefits for employment termination established By-law and applicable national collective bargaining agreements, together with any termination indemnities agreed on an individual basis, in accordance with the criteria established by Eni for cases of early termination, within the limits of protections envisaged by applicable national collective bargaining agreements and consistent with application criterion (6.C.1, letter g) of the Italian Corporate Governance Code. These criteria take into account the position held, statutory retirement age and actual age of the manager at the time employment is terminated and the annual remuneration received. For cases of termination that present high competitive risks relating to the nature of the position, agreements may contain additional non-compete clauses with payments defined in relation to remuneration level, scope, duration and effectiveness of the agreement.
Implementation of the 2017 remuneration policies for Directors and Managers with strategic responsibilities, as verified by the Remuneration Committee in conjunction with its periodic assessment as provided for in the Corporate Governance Code, was in line with the 2017 Remuneration Policy approved by the Board of Directors on 28th February 2017, taking account of the provisions of the resolutions of the Board of Directors of 13th April 2017 and 19th June 2017 concerning, respectively, remuneration for Non-Executive Directors serving on Board Committees and the remuneration of Directors with delegated powers.
This section reports: (i) verification of results for 2016 for the purpose of incentives paid and/or awarded in 2017; (ii) verification of results for 2017 for the purpose of incentives vested and payable and/or awardable in 2018.
For the purpose of paying 2017 annual incentives, the verification of performance in relation to the objectives set for 2016 in line with the Strategic Plan and the annual budget, measured on constantscenario basis, was approved by the Board on 28th February 2017, based on a recommendation by the Remuneration Committee, and resulted in a performance score of 124 points on the measurement scale used, the target and maximum performance levels of which are 100 and 130 points, respectively. Table 8 shows the weightings and performance achieved for each objective.
The verification of targets was conducted net of exogenous variables (e.g. oil and gas prices and the euro-dollar exchange rate), using the variance analysis method predetermined and approved by the Remuneration Committee. The following are the main actions that led to achieving the results.
The 2012-2014 DMI Plan provides for three annual awards, and for the last of these, on 28th February 2017, the Board of Directors, as verified and proposed by the Remuneration Committee, approved
| PERFORMANCE PARAMETERS | % WEIGHT |
MIN 70 |
BUDGET 100 |
MAX 130 |
PERFORMANCE SCORE |
WEIGHTED SCORE |
|---|---|---|---|---|---|---|
| i. Economic and financial results | 25.0 | 31.8 | ||||
| EBT (Earning Before Tax) adjusted | 12.5 | 130.0 | 16.2 | |||
| Free cash flow | 12.5 | 124.2 | 15.6 | |||
| ii. Operating performance and sustainability of economic results | 25.0 | 30.8 | ||||
| Hydrocarbon production | 12.5 | 116.6 | 14.6 | |||
| Exploration resources | 12.5 | 130.0 | 16.2 | |||
| iii. Environmental sustainability and human capital | 25.0 | 32.5 | ||||
| Total Recordable Incident Rate | 12.5 | 130.0 | 16.3 | |||
| CO2 emissions/UPS production |
12.5 | 130.0 | 16.2 | |||
| iv. Efficiency and financial strength | 25.0 | 29.1 | ||||
| ROACE (Return On average Capital Employed) adjusted | 12.5 | 130.0 | 16.2 | |||
| Net Debt/EBITDA adjusted | 12.5 | 102.8 | 12.9 | |||
| TOTAL | 100.0 | 124.2 |
Eni 2016 EBITDA at the minimum performance level, resulting in an annual multiplier of 70%.
Therefore, given the already verified results of 2014 and 2015,
a three-year average multiplier of 123% is to be applied to incentives awarded in 2014 for payment in 2017.
Table 9 shows the performance levels achieved during the vesting period.
| Target EBTDA (billion €) |
Multiplier 2014 |
Multiplier 2015 |
Multiplier 2016 |
Final multiplier for payment 2017 |
|---|---|---|---|---|
| EBITDA ≥ budget+0.9 | 170% | 170% | 170% | |
| budget ≤ EBITDA < budget+0.9 | 130% | 130% | 130% | 123% |
| budget -1.0 ≤ EBITDA < budget | 70% | 70% | 70% | (3-year average) |
| EBITDA < budget-0.9 | 0% | 0% | 0% |
The 2015-2017 DMI Plan provides for three annual awards, and for the last of these, on 28th February 2017, the Board of Directors, as verified and proposed by the Remuneration Committee, approved 2016 EBT, measured on a constantscenario basis, at higher performance level than target, resulting in the application of a multiplier of 130% to the the base percentage for the 2017 DMI award. Table 10 shows the 2016 EBT performance.
| Target EBT (billion €) | Multiplier for 2017 assignment |
|---|---|
| EBT ≥ budget+0.5 | 130% |
| budget ≤ EBT < budget+0.5 | 100% |
| budget -0.6 ≤ EBT < budget | 70% |
| EBT < budget-0.6 | 0% |
The 2014-2016 LTMI Plan provides for three annual awards, and for the first of these, on 19th June 2017, the Board of Directors, as verified and proposed by the Remuneration Committee, approved the performance for the 2016 of Total Shareholder Return and Net Present Value of proven reserves at seventh and third place, respectively, within the Peer Group for an annual multiplier of 40%.
Therefore, given the already verified results of 2014 and 2015, a three-year average multiplier of 54% is to be applied to incentives awarded in 2014 for payment in 2017.
Table 11 shows the positioning achieved during the vesting period.
| Positioning | 2014 | 2015 | 2016 | Final multiplier | |||
|---|---|---|---|---|---|---|---|
| in Peer Group | TSR 60% |
NPV 40% |
TSR 60% |
NPV 40% |
TSR 60% |
NPV 40% |
for payment 2017 |
| 1° | 130% | 130% | 130% | 130% | 130% | 130% | |
| 2° | 115% | 115% | 115% | 115% | 115% | 115% | |
| 3° | 100% | 100% | 100% | 100% | 100% | 100% | |
| 4° | 85% | 85% | 85% | 85% | 85% | 85% | |
| 5° | 70% | 70% | 70% | 70% | 70% | 70% | |
| 6° | 0% | 0% | 0% | 0% | 0% | 0% | 3-year |
| 7° | 0% | 0% | 0% | 0% | 0% | 0% | average |
| Annual multiplier |
0% | 121% | 40% | 54% |
The 2017-2019 equity-based LTI Plan provides for three annual awards, and for the first of these, on 26th October 2017, the Board of Directors, as verified and proposed by the Remuneration Committee, approved the award price of €13.4856, calculated in accordance with the parameters set under the plan (average of daily official closing prices recorded in the four months before the month in which the Board of Directors approved the award).
In this section, we describe the remuneration incentives earned in relation to verified 2017 targets and payable or awardable in 2018 to the Chief Executive Officer and General Manager and to other Managers with strategic responsibilities.
The new 2018 STI Plan, approved by the Shareholders' Meeting of 13th April 2017, provides for the vesting of an incentive, upon verification of performance levels related to targets set for 2017, divided into a 65% portion payable in 2018 and a 35% deferred portion that is awardable in 2018 and subject to the performance conditions established in the plan over a threeyear vesting period.
More specifically, the verified performance related to objectives assigned in 2017 to the Chief Executive Officer and General Manager was approved by the Board of Directors, based on a proposal by the Remuneration Committee, on 15th March 2018 and resulted in a performance score of 134 points on the measurement scale used, the target and maximum performance of which are 100 and 150 points, respectively.
Table 12 shows the weightings and performance level achieved for each target.
The verification of targets was conducted net of exogenous variables (e.g. oil and gas prices and the euro-dollar exchange rate), using the variance analysis method predetermined and approved by the Remuneration Committee.
| PERFORMANCE PARAMETERS | % WEIGHT |
MIN 70 |
BUDGET 100 |
MAX 130 |
OVER PERFORMANCE 150 |
PERFORMANCE SCORE |
WEIGHTED SCORE |
|---|---|---|---|---|---|---|---|
| i. Economic and financial results | 25.0 | 37.2 | |||||
| EBT (Earning Before Tax) adjusted | 12.5 | 150.0 | 18.7 | ||||
| Free cash flow | 12.5 | 148.0 | 18.5 | ||||
| ii. Operating performance and sustainability of economic results | 25.0 | 26.8 | |||||
| Hydrocarbon production | 12.5 | 80.0 | 10.0 | ||||
| Exploration resources | 12.5 | 134.1 | 16.8 | ||||
| iii. Environmental sustainability and human capital | 25.0 | 33.7 | |||||
| Severity Incident Rate (SIR) | 12.5 | 150.0 | 18.7 | ||||
| CO2 emissions/UPS production |
12.5 | 120.0 | 15.0 | ||||
| iv. Efficiency and financial strength | 25.0 | 36.3 | |||||
| ROACE (Return On average Capital Employed) adjusted | 12.5 | 150.0 | 18.8 | ||||
| Net Debt/EBITDA adjusted | 12.5 | 140.0 | 17.5 | ||||
| TOTAL | 100.0 | 134.0 |
The following are the main actions that led to achieving the results.
On 15th March 2018, the Board of Directors, as verified and proposed by the Remuneration Committee, approved 2017 EBT for Eni at the maximum performance level, resulting in an annual multiplier of 170%.
Therefore, given the already verified results of 2015 and 2016, a three-year average multiplier of 170% is to be applied to incentives awarded in 2015 for payment in 2018.
Table 13 shows the performance levels achieved during the vesting period.
| Target EBT (billion €) | Multiplier 2015 |
Multiplier 2016 |
Multiplier 2017 |
Final multiplier for payment 2018 |
|---|---|---|---|---|
| EBT ≥ budget+0.5 | 170% | 170% | 170% | |
| budget ≤ EBT < budget+0.5 | 130% | 130% | 130% | 170% |
| budget -0.6 ≤ EBT < budget | 70% | 70% | 70% | (3-year average) |
| EBT < budget-0.6 | 0% | 0% | 0% |
In this section, we describe the remuneration paid and/or awarded in 2017 to the Chairman of the Board of Directors, to Non-Executive Directors, to the Chief Executive Officer and General Manager, and to other Managers with strategic responsibilities in accordance with the 2017 Remuneration Policy and in relation to the performance achieved during the period in which they held their respective roles. Remuneration paid/awarded in 2017 is shown in the tables of Section II.
The Chairman was paid the following amounts: (i) up to 12th April 2017, the prorated amount of fixed remuneration for the role and for the delegated powers, approved respectively by the Shareholders' Meeting on 8th May 2014 and by the Board of Directors on 28th May 2014; (ii) since 13th April 2017, the prorated amount of fixed remuneration for the role and for the delegated powers, approved respectively by the Shareholders' Meeting on 13th April 2017 and by the Board of Directors on 19th June 2017.
For details of remuneration paid, see Table 1 in the section "Fixed remuneration".
The Chairman, in accordance with the resolution of the Board of Directors of 28th May 2014 and 19th June 2017, was granted
27
a life insurance policy and a permanent disability insurance policy covering injury or illness contracted in the workplace or elsewhere.
The Non-Executive Directors were paid the fixed remuneration approved by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting on 13th April 2017 in the amount of €80 thousand gross. Non-Executive Directors were also paid the prorated amount of additional remuneration payable for participation on Board Committees, as approved by the Board of Directors on 12th March 2015 for remuneration up to 12th April 2017 and on 13th April 2017 for remuneration subsequent to that date, in line with the 2017 remuneration policies.
These are detailed in Table 1 under the section "Remuneration for participation on the Committees".
The Chief Executive Officer and General Manager was paid the following: (i) up to 12th April 2017, the prorated amount of fixed remuneration approved by the Board of Directors on 28th May 2014; (ii) since 13th April 2017, the prorated amount of fixed remuneration approved by the Board of Directors on 19th June 2017. For details of remuneration paid, see Table 1 in the section "Fixed remuneration" above.
For the 2017 AMI Plan, the Chief Executive Officer and General Manager was paid an annual gross variable incentive of €1,674 thousand in 2017 in relation to 2016 performance (124 points) as approved by the Board of Directors on 28th February 2017 and as shown in Tables 1 and 2.
In 2017 the Chief Executive Officer and General Manager received the Deferred Monetary Incentive awarded in 2014, in his capacity as COO of the E&P Division, in the amount of €465 thousand in relation to the final multiplier verified over the vesting period (123%) as approved by the Board of Directors on 28th February 2017.
The Chief Executive Officer and General Manager was awarded a gross deferred monetary incentive of €864 thousand in 2017 in relation to the 2016 EBT performance, as approved by the Board of Directors on 28th February 2017.
In 2017, the Chief Executive Officer and General Manager was paid the Long-Term Monetary Incentive awarded in 2014 in the amount of €729 thousand, in relation to the final multiplier verified over the vesting period (54%) as approved by the Board of Directors on 19th June 2017.
In 2017, the Chief Executive Officer and General Manager was awarded 177,968 Eni shares in 2017 as approved by the Board of Directors on 26th October 2017. The number of shares awarded was determined based on the percentage of 150% to be applied to total fixed remuneration and the award price of €13.4856, calculated in accordance with the parameters of the plan.
In line with the resolutions of the Board of Directors of 28th May 2014 and 19th June 2017, the Chief Executive Officer and General Manager was granted a life insurance policy and a permanent disability insurance policy covering injury or illness contracted in the workplace or elsewhere, as well as, in compliance with the provisions of Italy's national collective bargaining agreement and the supplementary company agreements for Eni senior managers, the enrolment in the supplementary pension plan (FOPDIRE) and supplementary health plan (FISDE), together with a company car for business and personal use.
Table 7 provides a summary of all remuneration paid in 2017 to Claudio Descalzi in relation to his role as Chief Executive Officer and General Manager and to his previous role as COO of the E&P Division (which he held until 8th May 2014).
| Role | Fixed remuneration |
Variable remuneration |
Benefits | Total |
|---|---|---|---|---|
| Chief Executive Officer1 and General Manager |
1,5373 | 2,403 | 15 | 3,955 |
| COO E&P Division2 | 465 | 465 | ||
| Total remuneration | 1,537 | 2,868 | 15 4,420 |
(1) Since 9th May 2014.
(2) Until 8th May 2014.
(3) Equal to the sum of the pro-rata amounts of fixed remuneration for the 2014-2017 and 2017-2020 terms.
In 2017, within the context of the annual salary review process envisaged for all managers, selective adjustments were made to fixed remuneration for current Managers with strategic responsibilities, in cases of promotion to more senior levels, or in line with necessary market-driven adjustments. The total gross value of fixed remuneration paid in 2017 to Managers with strategic responsibilities is shown in Table 1 in the chapter "Compensation paid in 2017", under the item "Fixed compensation".
In 2017, annual variable incentives were paid to Managers with strategic responsibilities in accordance with the Remuneration Policy and based on performance achieved in 2016. In particular, the incentive is linked to performance against a range of metrics related to business and sustainability objectives (safety, environmental protection, stakeholder
relations), as well as relevant individual targets, consistent with the provisions of the Eni Strategic Plan. The total gross value of the incentives paid in 2017 to Managers with strategic responsibilities is shown in Table 2 in the chapter "Compensation paid in 2017", under the item "Bonus for the year - payable/paid".
Managers with strategic responsibilities were paid deferred monetary incentives awarded in 2014, on the basis of the final multiplier verified in the vesting period (123%), approved by the Board of Directors on 28th February 2017. The total gross value of the incentives paid in 2017 to Managers with strategic responsibilities is shown in Table 2 in the chapter "Compensation paid in 2017", under the item "Bonus for previous years - payable/paid".
Managers with strategic responsibilities were granted deferred monetary incentive awards on the basis of the 2016 EBT results, approved by the Board of Directors on 28th February 2017, as proposed by the Remuneration Committee in accordance with the 2017 Remuneration Policy. The total gross value of the awards granted to Managers with strategic responsibilities in 2017 is shown in Table 2 in the chapter "Compensation paid in 2017", under the items "Bonus for the year - deferred".
Managers with strategic responsibilities were paid in 2017 long-term monetary incentives awarded in 2014, on the basis of the final multiplier verified in the vesting period (54%), approved by the Board of Directors on 19th June 2017.
The total gross value of the award paid to Managers with strategic responsibilities is shown in Table 2 in the chapter "Compensation paid in 2017", under the items "Bonus for the year - deferred" and "Bonus for previous years - payable/paid".
In accordance with the resolution of the Board of Directors at its meeting of 26th October 2017, managers with strategic responsibilities were granted the first award for the Plan. The aggregate number of shares awarded to managers with strategic responsibilities is shown in Table 3 of the chapter "Remuneration paid in 2017", under the item "Eni shares awarded during the year".
During 2017, Managers with strategic responsibilities who accepted enhanced voluntary termination offers were paid, in addition to amounts due under legal and contractual obligations, additional amounts defined in line with company policy on early retirement. The total gross value of the indemnities paid for terminations during 2017 and the related impacts on the Incentive Plans in effect are shown in the chapter "Compensation paid in 2017", respectively in Table 1 under the item "Severance indemnity for termination of office or termination of employment" and in Table 2 under item "Bonus for previous years - no longer payable" (note 5).
For Managers with strategic responsibilities, in line with provisions in Italy's national collective bargaining agreement and supplementary corporate agreements for Eni managers, the Policy Guidelines provide for enrolment in the supplementary pension plan (FOPDIRE) as well as in the supplementary health plan (FISDE), life and disability insurance cover, together with a company car for business and personal use.
This section describes the incentives vested and payable and/ or awardable in 2018 to the Chief Executive Officer and General Manager and to other Managers with strategic responsibilities in relation to the verification of 2017 performance.
With reference to the Remuneration Policy in force during the period from 1st January to 31st December2017, the following incentives vested in favour of the Chief Executive Officer and General Manager:
The incentive awarded in 2015, payable in 2018, vested in favour of the Chief Executive Officer and General Manager in the amount of €1,469 thousand, determined on the basis of the final multiplier verified over the vesting period (170%), as approved by the Board of Directors on 15th March 2018.
The incentives payable/awardable in 2018 based on performance achieved in 2017 vested in favour of the Managers with strategic responsibilities, in the aggregate amounts that will be disclosed in the 2019 Remuneration Report. More specifically, these incentives were related to company performance and a series of business targets, sustainability targets (i.e. safety, environmental protection, relations with stakeholders), and individual targets assigned in
relation to the scope of responsibilities of the given role, in line with the provisions of Eni's Strategic Plan.
The incentive awarded in 2015, payable in 2018, vested in favour of the Managers with strategic responsibilities, determined on the basis of the final multiplier verified over the vesting period (170%), as approved by the Board of Directors on 15th March 2018. The total aggregate amount of such incentives will be published in 2019 Remuneration Report.
The table below reports the remuneration paid to Directors, Statutory Auditors, the Chief Executive Officer and General Manager and, in aggregate form, Managers with strategic responsibilities37. The remuneration received from subsidiaries and/or associates, except that waived or paid to the company, are shown separately. All parties who filled these roles during the period are included, even if they only held office for a fraction of the year. In particular:
the column labelled "Remuneration for participation on Committees" reports (on an accrual basis) the compensation due to Directors for participation in Committees established by the Board. In the notes, compensation for each Committee in which each Director participates is indicated separately;
the column labelled "Variable non-equity remuneration" under the item "Bonuses and other incentives" shows the incentives paid during the year due to rights vested following the assessment and approval of related performance results by relevant corporate bodies, in accordance with that specified, in greater detail, in the Table "Monetary incentive plans for the Chief Executive Officer and General Manager and other Managers with strategic responsibilities";
30
Variable non-equity
| remuneration | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First name and surname |
Note | Position | Period for which the position was held |
Expiration of office(*) |
Fixed remuneration |
Remuneration for participation in Committees |
Bonuses and other incentives |
Profit sharing |
Non monetary benefits |
Other remuneration |
Total | Fair value of equity -based remuneration |
Severance indemnity for end of office or termination of employment |
| Board of Directors | |||||||||||||
| Emma Marcegaglia | (1) | Chairman 01.01 - 12.31 | 2020 | 426(a) | 426 | ||||||||
| Claudio Descalzi | (2) | Chief Executive Officer and General Manager |
01.01 - 12.31 | 2020 | 1,537(a) | 2,403(b) | 15(c) | 3,955 | 40 | ||||
| Andrea Gemma | (3) | Director 01.01 - 12.31 | 2020 | 80(a) | 119(b) | 199 | |||||||
| Pietro Angelo Guindani |
(4) | Director 01.01 - 12.31 | 2020 | 80(a) | 75(b) | 155 | |||||||
| Karina Litvack | (5) | Director 01.01 - 12.31 | 2020 | 80(a) | 73(b) | 153 | |||||||
| Alessandro Lorenzi | (6) | Director 01.01 - 12.31 | 2020 | 80(a) | 98(b) | 178 | |||||||
| Diva Moriani | (7) | Director 01.01 - 12.31 | 2020 | 80(a) | 112(b) | 192 | |||||||
| Fabrizio Pagani | (8) | Director 01.01 - 12.31 | 2020 | 80(a) | 61(b) | 21(c) | 162 | ||||||
| Alessandro Profumo | (9) | Director 01.01 - 04.13 | 2017 | 23(a) | 11(b) | 34 | |||||||
| Domenico Livio Trombone |
(10) | Director 04.13 - 12.31 | 2020 | 57(a) | 47(b) | 104 | |||||||
| Board of Statutory Auditors | |||||||||||||
| Matteo Caratozzolo (11) | Chairman 01.01 - 04.12 | 2017 | 23(a) | 110(b) | 133 | ||||||||
| Rosalba Casiraghi | (12) | Chairman 04.13 - 12.31 | 2020 | 57(a) | 57 | ||||||||
| Enrico Maria Bignami (13) | Statutory auditor 04.13 - 12.31 | 2020 | 50(a) | 50 | |||||||||
| Paola Camagni | (14) | Statutory auditor 01.01 - 12.31 | 2020 | 70(a) | 100(b) | 170 | |||||||
| Alberto Falini | (15) | Statutory auditor 01.01 - 12.04 | 2017 | 20(a) | 93(b) | 113 | |||||||
| Marco Lacchini | (16) | Statutory auditor 01.01 - 12.04 | 2017 | 20(a) | 20 | ||||||||
| Andrea Parolini | (17) | Statutory auditor 04.13 - 12.31 | 2020 | 50(a) | 50 | ||||||||
| Marco Seracini | (18) | Statutory auditor 01.01 - 12.31 | 2020 | 70(a) | 97(b) | 167 | |||||||
| Other Managers with strategic responsibilities(**) |
(19) | prepares the Financial Statements Remuneration from subsidiaries |
Remuneration in the company that and associates |
8,794 | 8,267 | 200 | 155 | 17,416 | 63 | 70 | |||
| Total | 8,794(a) | 8,267(b) | 200(c) | 155(d) 17,416 | 63 | 70(e) | |||||||
| 11,677 | 596 | 10,670 | 215 | 576 | 23,734 | 103 | 70 |
(*) The term of office expires with the Shareholders' Meeting approving the Financial Statements for the year endin 31st December 2019.
(**) Managers who were permanent members of the Company's Management Committee during the year together with the Chief Executive Officer, or who reported directly to the CEO (nineteen managers).
(1) Emma Marcegaglia - Chairman of the Board of Directors
(a) The amount includes: (i) the fixed remuneration of €90 thousand set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting on 13th April 2017; (ii) pro-quota of fixed remuneration for the delegated powers approved by the Board for the 2014-2017 and 2017-2020 terms, equal to €41.9 and €293.8 thousand, respectively. (2) Claudio Descalzi - Chief Executive Officer and General Manager
(a) The amount includes: (i) the pro-rata fixed remuneration for the position of Chief Executive Officer for the 2014-2017 and 2017-2020 terms, coming to €155.8 and €430 thousand respectively; (ii) the pro-rata fixed remuneration for the position of General Manager for the 2014-2017 and 2017-2020 terms, coming to €194.3 and €757.1 thousand, respectively. To this amounts are to be added the indemnities due for transfers, in Italy and abroad, in line with the provisions of the relevant national collective labour agreement for senior
managers and the Company's complementary agreements for an amount of €17.7 thousand. (b) The amount includes the annual variable incentive of €1,674 thousand and the Long-Term Monetary Incentive of €729 thousand assigned in 2014 and paid in 2017 in relation to the performance targets achieved during the 2014-2016 vesting period. To this amount is added the Deferred Monetary Incentive assigned in 2014, for the position of COO of the E&P Division, paid in 2017 for an amount of €465 thousand in relation to performance targets achieved during the 2014-2016 vesting period.
(c) The amount includes the taxable value of insurance and welfare coverage, complementary pensions and the car for business and personal use.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €47.2 thousand for participating in the Control and Risk Committee; €35.8 thousand for the Compensation Committee; €5.7 thousand for Sustainability and Scenarios Committee; €30.1 thousand for the Nomination Committee.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €33.6 thousand for participating in the Compensation Committee; €41.5 thousand for the Sustainability and Scenarios Committee.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €36.8 thousand for participating in the Control and Risk Committee; €5.7 thousand for the Compensation Committee; €30.7 thousand for the Sustainability and Scenarios Committee.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €67.2 thousand for participating in the Control and Risk Committee; €30.8 thousand for the Compensation Committee.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €47.2 thousand for participating in the Control and Risk Committee; €30.8 thousand for the Compensation Committee; €34.3 thousand for the Nomination Committee.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017 and 2017-2020 terms, and in particular: €33.6 thousand for participating in the Sustainability and Scenarios Committee ; €27.2 thousand for the Nomination Committee.
(c) The amount corresponds to the pro-rata remuneration for the office of Chairman of the Advisory Board for oil&gas.
(a) The amount corresponds to the pro-rata annual fixed remuneration until 13th April 2017, set by the Shareholders' Meeting on 8th May 2014.
(b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2014-2017, and in particular: €5.7 thousand for participating in the Sustainability and Scenarios Committee and €5.7 thousand for the Nomination Committee.
(a) The amount corresponds to the pro-rata annual fixed remuneration set by the Shareholders' Meeting on 13th April 2017. (b) The amount includes the pro-rata remuneration set by the Board of Directors for participating in the Committees for the 2017-2020 term, and in particular: €25.1 thousand for participating to the Sustainability and Scenario Commitee; €21.5 thousand for the Nomination Committee.
(a) The amount corresponds to the pro-rata annual fixed remuneration until 13th April 2017, set by the Shareholders' Meeting on 8th May 2014. (b) The amount includes remuneration for serving as Statutory Auditor on the Boards of subsidiaries or associated companies and in particular: €45 thousand as Chairman of the Board of Statutory Auditors of Eni Fuel SpA; €19.5 thousand as Chairman of the Board of Statutory Auditors of Eni Adfin; €45 thousand as Chairman of TTPC SpA.
(a) The amount corresponds to the pro-rata annual fixed remuneration since 13th April 2017, set by the Shareholders' Meeting.
(a) The amount corresponds to the pro-rata annual fixed remuneration set by the Shareholders' Meeting on 13th April 2017.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes remuneration for serving as Statutory Auditor on the Boards of subsidiaries or associated companies and in particular: €19.5 thousand as Chairman of the Board of Statutory Auditors of AGI SpA; €27 thousand as Chairman of the Board of Statutory Auditors of Eni East Africa SpA; €23.3 thousand as Statutory Auditor of Syndial; €30 thousand as Auditor of Eni Angola SpA.
(a) The amount corresponds to the pro-rata annual fixed remuneration until 13th April 2017, set by the Shareholders' Meeting on 8th May 2014.
(b) The amount includes remuneration for serving as Statutory Auditor on the Boards of subsidiaries or associated companies and in particular: €45 thousand as Chairman of the Board of Statutory Auditors of Eni Angola SpA; €18 thousand as Chairman of the Board of Statutory Auditors of Eni Timor Leste SpA; €30 thousand as Auditor for TTPC SpA.
(a) The amount corresponds to the pro-rata annual fixed remuneration until 13th April 2017, set by the Shareholders' Meeting on 8th May 2014.
(a) The amount corresponds to the pro-rata annual fixed remuneration set by the Shareholders' Meeting on 13th April 2017.
(a) The amount corresponds to the fixed remuneration set by the Shareholders' Meeting on 8th May 2014 and confirmed by the Shareholders' Meeting of 13th April 2017. (b) The amount includes remuneration for serving as Statutory Auditor on the Boards of subsidiaries or associated companies and in particular: €27 thousand as Chairman of the Board of Statutory Auditors of LNG Shipping SpA; €27 thousand as Chairman of the Board of Statutory Auditors of Ing. Luigi Conti Vecchi; €30 thousand as Statutory Auditor of Eni Fuel SpA; €13 thousand as Statutory Auditor of Eni Adfin SpA.
(a) The amount of €8,794 thousand for Gross Annual Salary is supplemented by the indemnities owed for transfers, in Italy and abroad, in line with the provisions of the relevant national collective labour agreement and with the Company's additional agreements, as well as other indemnities related to employment for a total of €437 thousand. (b) The amount includes the payment of €2,946 thousand related to the deferred and long-term monetary incentives assigned in 2014 for performance targets achieved in the 2014-2016 vesting period, as well as the pro-rata amounts of the long-term Incentive Plans (DMI and LTMI), paid upon consensual termination as defined in the respective Plan Regulations.
(c) The amount includes the taxable value of insurance and welfare coverage, complementary pensions and the car for business and personal use.
(d) Amounts due to for the positions held by Managers with strategic responsibilities in the Supervisory Body established under the Company's Model 231 and the Manager responsible for the preparation of the Company's financial statements.
(e) The amount includes severance payments and early retirement incentives paid in relation to employment termination.
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The table below reports, by name, the variable monetary incentives, both short and long-term, envisaged for the Chief Executive Officer and General Manager and, at an aggregate level, other Managers with strategic responsibilities including all individuals who filled these roles during the period, even if for only a fraction of the year.
The column labelled "Bonus for the year" details:
The column labelled "Bonus for previous years details:
The column labelled "Other Bonuses" details incentives paid on a one-off extraordinary basis related to the achievement of particularly important results or projects during the year. The total of the amounts under the item "payable/paid" in the columns "Bonus for the year", "Bonus for previous years" and "Other Bonuses" is the same as that indicated in the "Bonuses and other incentives" column in Table 1.
| Bonus for the year | Bonus for previous years | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| First name and surname |
Position | Plan | payable/paid | deferred | deferral period |
no longer payable |
payable/ paid(1) |
still deferred |
Other bonuses |
| 2017 Annual Monetary Incentive Plan BoD 28th February 2017 |
1,674 | ||||||||
| 2017 Deferred Monetary Incentive Plan BoD 28th February 2017 |
864 | 3 years | |||||||
| 2016 Deferred Monetary Incentive Plan BoD 17th March 2016 |
864 | ||||||||
| Claudio Descalzi | Chief Executive Officer and |
2016 Long-Term Monetary Incentive Plan BoD 15th September 2016 |
1,350 | ||||||
| General Manager(2) | 2015 Deferred Monetary Incentive Plan BoD 12th March 2015 |
864 | |||||||
| 2015 Long-Term Monetary Incentive Plan BoD 17th September 2015 |
1,350 | ||||||||
| 2014 Long-Term Monetary Incentive Plan Assignment: BoD 17th September 2014 Payment: BoD 19th June 2017 |
621(3) | 729 | |||||||
| Total | 1,674 | 864 | 621 | 729 | 4,428 | ||||
| 2017 Annual Monetary Incentive Plan BoD 28th February 2017 |
5,320 | ||||||||
| 2017 Deferred Monetary Incentive Plan BoD 28th February 2017 |
3,834 | 3 years | |||||||
| 2016 Deferred Monetary Incentive Plan BoD 17th March 2016 |
38(5) | 40(6) | 2,930 | ||||||
| 2016 Long-Term Monetary Incentive Plan BoD 15th September 2016 |
76(5) | 3,338 | |||||||
| Other Managers with strategic responsibilities(4) |
2015 Deferred Monetary Incentive Plan BoD 12th March 2015 |
2,529 | |||||||
| 2015 Long-Term Monetary Incentive Plan BoD 17th September 2015 |
57(5) | 33(6) | 2,588 | ||||||
| Deferred Monetary Incentive Plan2014 Assignment: BoD 17th March 2014 Payment: BoD 28th February 2017 |
1,564 | ||||||||
| 2014 Long-Term Monetary Incentive Plan Assignment: BoD 17th September 2014 Payment: BoD 19th June 2017 |
1,200(3) | 1,310 | |||||||
| Total | 5,320 | 3,834 | 1,371 | 2,947 | 11,385 | ||||
| 6,994 | 4,698 | 1,992 | 3,676 | 15,813 |
(1) Payment relating to the deferred monetary incentive and the long-term monetary incentive awarded in 2014.
(2) In 2017, Claudio Descalzi, with regard to his previous position of COO of the E&P Division held until 8th May 2014, received the amount of €465 thousand, relating to the deferred monetary incentive assigned in 2014, calculated in relation to the performance achieved in the 2014-2016 vesting period.
(3) Amount no longer payable, equal to the difference between the incentive assigned in 2014 and that paid in 2017.
(4) Managers who were permanent members of the Company's Management Committee during the year, together with the Chief Executive Officer and who reported directly to the CEO (nineteen managers).
(5) Pro-rata amount that is no longer payable, following the termination of employment relationship, in relation to the vesting period expired, as provided for in the Plan Regulation.
(6) Pro-rata amount paid, following the consensual termination of employment relationship, in relation to the vesting period expired, as provided for in the Plan Regulation.
The table below shows, for the equity-based incentive plan, the shares awarded to the Chief Executive Officer and General Manager and the aggregate numbers awarded to the other Managers with strategic responsibilities (including all individuals who covered such positions for any period of time during the year). In particular:
the column "Financial instruments awarded during the year" shows the type, number, total fair value, vesting period, award date, and market price on that date for financial instruments awarded during the year;
the column "Financial instruments vested during the year and not granted" shows the type and number of any financial instruments awarded and no longer grantable based on verification of performance during the vesting period, or of any financial instruments awarded and not grantable due to events relating to employment relationships as envisaged in the Plan Rules;
| Financial instruments awarded in previous years and not vested during the year |
Financial instruments awarded during the year | Financial instruments vested during the year and not assigned |
Financial instruments vested during the year and grantable |
Financial instruments for the year |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First name and surname |
Position | Plan | Number of Eni shares |
Vesting Number of period Eni shares |
Fair value at award date (thousands of euros) |
Vesting period |
Award date |
Market price on award date (euro) |
Number of Eni shares |
Number of Eni shares |
Value at date of vesting |
Fair value (thousands of euros) |
||||
| Claudio Descalzi |
Chief Executive Officer and General Manager |
2017 Equity-based Long-Term Incentive Plan 2017 BoD 26th October 2017 |
177,968 | 1,422 | 3 years 26/10/2017 | 13.92 | 40 | |||||||||
| Total | 177,968 | 1,422 | 40 | |||||||||||||
| responsibilities(1) | Other Managers with strategic | 2017 Equity-based Long-Term Incentive Plan 2017 BoD 26th October 2017 |
285,491 | 2,281 | 3 years 30/11/2017 | 13.81 | 63 | |||||||||
| Total | 285,491 | 2,281 | 63 | |||||||||||||
| 463,459 | 3,703 | 103 |
(1) Managers who were permanent members of the Company's Management Committee during the year, together with the Chief Executive Officer and who reported directly to the CEO (eighteen managers).
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The table below reports, under Article 84-quater, fourth paragraph, of the Consob Issuers Regulation, the shareholdings in Eni SpA and its subsidiaries that are held by Directors, Statutory Auditors, Chief Operating Officers, and other Managers with strategic responsibilities, as well as by their spouses from whom they are not legally separated, and their children under eighteen years of age, directly or through subsidiaries, trust companies, or intermediaries, as recorded in the register of shareholders
communications received and other information sources. The table includes all parties who meet this description for all or part of the reporting period.
The number of shares (all "ordinary") is indicated, for each company held, by name, for Directors, Statutory Auditors, Chief Operating Officers of Eni Divisions and, at an aggregate level, for the other Managers with strategic responsibilities. The individuals indicated hold title to the shareholdings.
| First name and surname | Position | Affiliated company | Number of shares held as at 31.12.2016 |
Number of shares purchased |
Number of shares sold |
Number of shares held as at 31.12.2017 |
|---|---|---|---|---|---|---|
| Board of Directors | ||||||
| Emma Marcegaglia | Chairman | Eni SpA | 34,270 | 0 | 0 | 34,270 |
| Eni SpA(1) | 45,000 | 0 | 0 | 45,000 | ||
| Eni SpA(2) | 7,654 | 523 | 437 | 7,740 | ||
| Claudio Descalzi | Chief Executive Officer and General Manager |
Eni SpA | 39,455 | 0 | 0 | 39,455 |
| Board of Statutory auditors | ||||||
| Marco Lacchini(3) | Statutory Auditor | Eni SpA(2) | 5,000 | 0 | 0 | 5,000 |
| Other Managers with strategic responsibilities(4) |
Eni SpA | 171,559 | 0 | 0 | 171,559 |
(1) Bare ownership.
(2) Asset management.
(3) In office until 13th April 2017.
(4) Managers who were permanent members of the Company Management Committee during the year together with the Chief Executive Officer and who reported directly to the CEO (nineteen managers, of which fifteen held shares in Eni SpA and its subsidiaries).
With reference to the 2017-2019 Long-Term Share Incentive Plan approved by the ordinary Shareholders' Meeting on 13th April 2017, subject to the conditions and purposes set out in the Information
Document available on the website, the following table shows details of the 2017 Plan assignment, in accordance with Art. 84-bis (Annex 3 A, schedule 7) of the Consob Issuer Regulations.
| FRAME 1 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| FINANCIAL INSTRUMENTS OTHER THAN STOCK OPTIONS Section 2 Newly instruments awarded based on the decision of the competent body in charge of the implementation of the resolution of the Shareholders' Meeting |
||||||||||
| First name and surname or category |
Position | |||||||||
| (to be specified only for individuals listed by name) | Date of shareholders' resolution |
Type of financial instruments |
Number of financial instruments |
Award date |
Purchase price of the instruments |
Market price on award date (euro) |
Vesting period |
|||
| Claudio Descalzi | CEO and General Manager Eni SpA | 13th April, 2017 | Eni shares | 177,968(1) | 26/10/17 | n.a. | 13.92 | 3 years | ||
| Antonio Massimiliano Baldassarre Managing Director Agip Karachaganak BV | 13th April, 2017 | Eni shares | 3,522 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Massimo Bechi | CEO Eni Deutschland GmbH | 13th April, 2017 | Eni shares | 2,781 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Claudio Brega | CEO EniServizi SpA | 13th April, 2017 | Eni shares | 7,749 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Guido Brusco | Managing Director Eni Angola Production BV | 13th April, 2017 | Eni shares | 4,486 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Paolo Campelli | Managing Director Eni Mozambique Engineering Ltd | 13th April, 2017 | Eni shares | 3,374 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Stefano Carbonara | Managing Director Eni Myanmar BV | 13th April, 2017 | Eni shares | 1,075 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Fabio Cavanna | Managing Director IEOC Production BV | 13th April, 2017 | Eni shares | 3,559 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Andrea Cecchinato | Chairman and CEO Ing. Luigi Conti Vecchi SpA | 13th April, 2017 | Eni shares | 1,631 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Alberto Chiarini | CEO Eni gas e luce SpA | 13th April, 2017 | Eni shares | 14,831 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Marco Coccagna | CEO Eni Corporate University SpA | 13th April, 2017 | Eni shares | 4,894 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Fabrizio Cosco | CEO Eni Finance International SA | 13th April, 2017 | Eni shares | 1,261 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Fabrizio Dassogno | Chairman and CEO Tigàz DSO | 13th April, 2017 | Eni shares | 3,893 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Carmine De Lorenzo | Managing Director Eni Venezuela BV | 13th April, 2017 | Eni shares | 4,078 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Daniel Fava | Directeur General Eni Gas & Power France SA | 13th April, 2017 | Eni shares | 3,819 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Daniele Ferrari | CEO Versalis SpA | 13th April, 2017 | Eni shares | 16,314 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Lorenzo Fiorillo | Directeur Général Eni Congo SA | 13th April, 2017 | Eni shares | 3,856 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Ernesto Formichella | CEO Banque Eni SA | 13th April, 2017 | Eni shares | 3,745 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Gabriele Franceschini | President and Chief Executive Officer Eni US Operating Co Inc |
13th April, 2017 | Eni shares | 4,116 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Alessandro Gelmetti | Managing Director Eni South Africa BV | 13th April, 2017 | Eni shares | 2,484 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Andrea Giaccardo | Managing Director Eni Algeria Production BV | 13th April, 2017 | Eni shares | 1,928 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Salvatore Giammetti | General Director OOO-Eni Energhia | 13th April, 2017 | Eni shares | 3,596 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Giorgio Guidi | Managing Director Eni Pakistan Ltd | 13th April, 2017 | Eni shares | 2,188 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Philip Duncan Hemmens | Managing Director EniNorge AS | 13th April, 2017 | Eni shares | 4,235 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Massimo Maria Insulla | Vice Chairman & Managing Director Nigerian Agip Oil Company Ltd |
13th April, 2017 | Eni shares | 3,967 | 30/11/17 | n.a. | 13.81 | 3 years | ||
| Salvatore Ippolito | CEO Agenzia Giornalistica Italia SpA | 13th April, 2017 | Eni shares | 3,152 | 30/11/17 | n.a. | 13.81 | 3 years |
(1) Number of shares awarded with resolution of the Board of Directors of 26th October 2017.
| FRAME 1 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| FINANCIAL INSTRUMENTS OTHER THAN STOCK OPTIONS | |||||||||||
| First name and surname or category |
Position | Section 2 Newly instruments awarded based on the decision of the competent body in charge of the implementation of the resolution of the Shareholders' Meeting |
|||||||||
| (to be specified only for individuals listed by name) | Date of shareholders' resolution |
Type of financial instruments |
Number of financial instruments |
Award date |
Purchase price of the instruments |
Market price on award date (euro) |
Vesting period |
||||
| Giuseppe La Scola | Chairman & General Manager Versalis Pacific Trading (Shanghai) CO Ltd |
13th April, 2017 | Eni shares | 3,411 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Vincenzo Larocca | CEO Syndial SpA | 13th April, 2017 | Eni shares | 9,047 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Franco Magnani | CEO Eni Trading & Shipping SpA | 13th April, 2017 | Eni shares | 11,197 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Giuseppe Moscato | Directeur General EniTunisia BV | 13th April, 2017 | Eni shares | 4,004 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Antonio Panza | Chairman & Managing Director di Eni North Africa BV | 13th April, 2017 | Eni shares | 8,898 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Biagio Pietraroia | Managing Director Agip Caspian Sea BV | 13th April, 2017 | Eni shares | 3,522 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Marcello Poidomani | Chaiman Versalis France SAS | 13th April, 2017 | Eni shares | 4,597 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Stefano Quartullo | CEO Eni France Sàrl | 13th April, 2017 | Eni shares | 2,558 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Francesca Rinaldi | Managing Director Eni UK Ltd | 13th April, 2017 | Eni shares | 1,743 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Damian Robinson | Chaiman and CEO Eni Trading & Shipping Inc | 13th April, 2017 | Eni shares | 3,197 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Giancarlo Ruiu | Managing Director Eni Ghana E&P Ltd | 13th April, 2017 | Eni shares | 2,076 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Mauro Russo | Chairman and CEO Eni Iberia SLU | 13th April, 2017 | Eni shares | 2,558 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Loris Tealdi | Managing Director Eni Iraq BV | 13th April, 2017 | Eni shares | 3,485 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Luciano Maria Vasques | Chaiman and CEO EniProgetti SpA | 13th April, 2017 | Eni shares | 4,709 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Umberto Vergine | Managing Director Eni International BV | 13th April, 2017 | Eni shares | 16,722 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Marco Volpati | Managing Director Eni International Resources Ltd | 13th April, 2017 | Eni shares | 2,929 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Other managers with strategic responsibilities Eni(2) |
15 managers | 13th April, 2017 | Eni shares | 245,299 | 30/11/17 | n.a. | 13.81 | 3 years | |||
| Other managers | 301 managers | 13th April, 2017 | Eni shares | 1,100,607 | 30/11/17 | n.a. | 13.81 | 3 years |
(2) Other managers who, at time of award and together with the Chief Executive Officer, were permanent members of the Company's Management Committee or reported directly to the CEO.
Piazzale Enrico Mattei, 1 - Rome - Italy Capital Stock as of December 31, 2017: € 4.005.358.876,00 fully paid Tax identification number 00484960588
Via Emilia, 1 - San Donato Milanese (Milan) - Italy Piazza Ezio Vanoni, 1 - San Donato Milanese (Milan) - Italy
Financial Statement pursuant to rule 154-ter paragraph 1 of Legislative Decree No. 58/1998 Integrated Annual Report Annual Report on Form 20-F for the Securities and Exchange Commission Fact Book (in Italian and English) Interim Consolidated Report as of June 30 pursuant to rule 154-ter paragraph 2 of Legislative Decree No. 58/1998 Corporate Governance Report pursuant to rule 123-bis of Legislative Decree No. 58/1998 (in Italian and English) Remuneration Report pursuant to rule 123-ter of Legislative Decree No. 58/1998 (in Italian and English)
Eni in 2017 – Summary Annual Review (in English) Eni For 2017 – Sustainability Report (in Italian and English)
Internet home page www.eni.com
Rome office telephone +39-0659821
Toll-free number 800940924
e-mail [email protected]
Piazza Ezio Vanoni, 1 - 20097 San Donato Milanese (Milan) Tel. +39-0252051651 - Fax +39-0252031929 e-mail: [email protected]
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