Remuneration Information • Mar 27, 2023
Remuneration Information
Open in ViewerOpens in native device viewer
This is an English translation of the original Italian document. The original version in Italian takes precedence
Dear shareholders,
as Chairman of the Remuneration Committee, I am pleased to present you FinecoBank Group's Remuneration policy and report.
The document starts with an "Executive Summary", which summarizes the features of the new Remuneration policy and report and the main results achieved in 2022. Then two Sections follow: the "2023 Remuneration policy" which describes the key principles of our approach to remuneration and incentive systems for Employees and Financial Advisors, as well as Fineco's compensation practices; the "2022 Remuneration report", which provides detailed information on the results of the processes implemented in the previous financial year.
Also in 2023, we propose a clear and easily accessible Policy, oriented towards rewarding performance and merit thanks to promoting the value of equity, sustainability, diversity of human resources and development of people's strategic skills. Our approach is based on the concept of transparency, as an element able to protect and strengthen our reputation and to create value over the long term, in the interest of all the stakeholders. Thus, the remuneration structure of the Chief Executive Officer and the criteria by which the incentives are linked to the economic-financial and social responsibility objectives in the short and medium-long term, are clearly and transparently presented in both the policy and the report.
FinecoBank Group closed 2022 with strong growth and with results that confirm the ability to face a more challenging and complex context and the efficacy of a balanced and diversified business model. A path that is based on the quality of products and services, operational efficiency and innovation, with a wider offering of ESG added value products, and, above all, an approach oriented towards transparency and great respect for the client. The Group business model is able to face every stage of the market and to generate a balanced flow of revenues, thanks to a long-term sustainable and organic growth strategy. Fineco's digital DNA continues to represent a solid basis for the achievement of important economic-financial objectives and a positive footprint in the wider system, in line with its corporate purpose: "supporting customers in the responsible management of their savings in order to create the conditions for a more prosperous and equitable society".
In this context, the Group is constantly promoting employees' wellbeing and satisfaction, creating an inclusive and sustainable working environment, in which work-life balance is guaranteed. In addition, considering the macro-economic context, the Group is committed to supporting the employees through specific initiatives.
Our governance model aims at ensuring full cooperation between the bodies involved and the adequate
control of all the Group's remuneration processes, so that informed decisions are taken independently and promptly, in order to avoid conflicts of interest.
With the aim to strengthen the connection with the stakeholders' interests, the Remuneration Committee has been working closely with the Bank's management to ensure that the remuneration and incentive systems are in line with the Bank's strategy and, in general, with the evolving context in which the Group operates.
In line with previous years and in order to better respond to its tasks, the Remuneration Committee took part in each phase of the remuneration processes, ensuring consistency with best market practices and verifying the alignment with the "pay for performance" principle that guides the Group's incentive systems.
The 2023 Remuneration Policy confirms the close correlation with the strategic objectives set out in the multi-year plan, with reference to both the economic-financial objectives and the environmental, social and governance impact.
The overall structure of the Remuneration policy and report remain intact, as well as the main elements and mechanisms of the incentive systems also considering the feedback received from shareholders and proxy advisors during the engagement campaign, as well as the great consensus achieved during the 2022 AGM.
As Chairman of the Remuneration Committee, I would like to express my sincere thanks to the Directors Giancarla Branda and Paola Giannotti De Ponti for the meaningful contribution to the discussion and for the continuous attention in searching for effective and balanced solutions during the last three-year mandate.
On behalf of the Remuneration Committee, I would like to thank you Shareholders for the constant willingness to compare and share each need and point of view, and for the time you will spend reading our 2023 Remuneration policy and report, trusting in your positive appreciation.
Sincerely, Chairman of the Remuneration Committee
GIANMARCO MONTANARI
The principles set in FinecoBank Group's (hereinafter also "Fineco Group" or "Group" or "FinecoBank Group")1 Remuneration policy and report provide the framework for the design of reward programs.
The Group's compensation approach, coherent with the regulations and the best market practices, guarantees the link to the performance and the market context, and the alignment with the business strategy and the longterm shareholders' interest.
The key principles set forth in the 2023 remuneration policy (Section I) (also "Compensation Policy") reflect the most recent regulations in terms of remuneration and incentive policies and practices, in order to develop – in the interest of all stakeholders – remuneration systems that are aligned with the Group's Multi Year Plan 2020- 2023 (the Strategic Plan) strategies. Through objectively measurable objectives over a defined time period, annual or multi-year, the incentive systems are consistent with corporate values and objectives, including ESG factors, with the long-term strategies linked to company results and to prudent risk management policies. The FinecoBank Group, in fact, is committed to developing a sound and effective risk management, throughout mechanisms for correcting the systems themselves in order to maintain consistency with the reference framework for determining the risk appetite and with the levels of capital and liquidity necessary to support all undertaken activities and, in any case, such as to avoid distorted incentives that could lead to a breach of law or to excessive risk-taking. With reference to the ESG objectives, the remuneration approach is consistent with the Group Sustainability Strategy, through the implementation of the environmental, social and governance factors within the remuneration framework.
In the definition of the remuneration policies, the Group also considers its employees' compensation and working conditions, maintaining an inclusive and fair working environment. As a proof of the commitment to employees' wellbeing and engagement, FinecoBank is confirmed as 2023 Italy Top Employer. The self-titled Institute annually awards this certification to companies that outstand for their HR strategies and policies, offering their employees the best working conditions. In addition, in the 2021-2023 Long-Term Incentive Plan there is a specific performance indicator linked to People Engagement.
Furthermore, FinecoBank is committed to ensuring that the Compensation Policy is gender neutral, thus concurring to pursue equal opportunities for professional development and remuneration. In this context, the Multi Year Plan sets specific objectives relating to "gender neutrality", both with a compensation focus, with particular attention to the Gender Pay Gap, and with the aim to preserve diversity and equal opportunities, for which a specific Global Policy has been adopted.
During 2022 and in the first months of 2023, FinecoBank continued the dialogue with shareholders and proxy advisors, which raised valuable insights on the remuneration approach and specific suggestions for an effective disclosure to the public, based on national and international standards, which were taken into account in drafting this document.
1 Instead, the term "FinecoBank S.p.A." refers to the Italian legal entity (hereinafter also "Fineco" "FinecoBank" or the "Bank"). The Remuneration Policy of Fineco Asset Management DAC (FAM) is aligned with the principles of the Group Remuneration Policy and with Circ. no. 285 of 2013 of the Bank of Italy with reference to the specific provisions relating to asset management companies.
Our Compensation Policy Fundamentals ensure a correct definition of competitive compensation levels, internal equity and transparency, avoiding unnecessarily complex practices2.
In order to align the remuneration policies to the strategy set out in the Group 2020-2023 Multi Year Plan, they take into account goals linked to sustainability, intended as the capacity to create and maintain value for all the stakeholders in the medium-long term.
Our remuneration governance model aims to ensure clarity, reliability and transparency in the remuneration decision-making processes through an adequate control of the Group's remuneration processes and ensuring that decisions are made appropriately in an independent, informed and timely manner.
The Remuneration policy and report are aligned to the national and international regulatory requirements. For example, it considers also: Legislative Decree no. 385/1993, Legislative Decree no. 58/1998 (TUF), the European Directives as transposed into Italian law (European Directive 2017/828 Shareholder Rights Directive II, EU Dir. 36/2013 as amended by EU Dir 878/2019), the EU Reg. 575/2013 no. CRR and the EU Delegated Regulation no. 923/2021, the Issuers' Regulation (Consob); the Circular of the Bank of Italy no. 285/2013 as updated from time to time; the March 19 2019 Bank of Italy Provision (Provisions on transparency of banking and financial operations and services - fairness of relations between intermediaries and customers).
The involvement of the Company Control Functions Compliance and Chief Risk Officer3 (CRO from now on) assures full compliance of compensation policies and processes, guaranteeing the coherence with the Risk Appetite Framework, in line with sectorial regulations.
Through benchmarking, we aim to implement a competitive remuneration structure for effective retention and motivation of our key resources and to deliver compensation that is consistent with the creation of long-term value for stakeholders. For comparative analysis, a peer group is defined.
2 In line with ESMA Guidelines on certain aspects of the MiFID II remuneration requirements, firms should avoid creating unnecessarily complex policies and practices (such as combinations of different policies and practices, or multi-faceted or multi-layered schemes, which increase the risk that relevant persons' behaviour will not be driven to act in the best interests of clients, and that any controls in place will not be as effective to identify the risk of detriment to the client). Relevant person is the personnel that offers products to the clients.
3 The Risk Management function is represented in FinecoBank by the CRO Department. The two terms are used interchangeably throughout the document.
The Remuneration Committee, with particular reference to the population of FinecoBank Group's Identified Staff, through the support of an independent external consultant, identifies the peer group, defined considering a panel of comparable companies, based on which specific comparative analysis on compensation are carried out (Benchmark). As a compensation policy objective, the fixed component of the remuneration for Identified Staff targets the market median.
The incentive systems are consistent with corporate values and objectives, including those based on environmental, social and governance (ESG) factors, in line with the FinecoBank Group's 2020-2023 strategic plan. In this context, the Group is also committed to ensuring a gender-neutral Remuneration Policy, considering also the employees' wellbeing.
The goals of the short term incentive systems take into account sustainable parameters, intended as the capacity to create and maintain value for all the stakeholders, in particular through specific clusters named "Stakeholder Value" and "Tone from the top".
The 2023 scorecard of the CEO reflects the focus on sustainability objectives, which takes into account environmental, social and governance factors, with a total weight of 30%.
Among the new features of the 2023 scorecard, the ESG ratings at the basis of the assessment of the maintenance or improvement of the score assigned to Fineco by the ESG rating agencies have been further detailed. Furthermore, the Group is increasingly attentive to the integration of climate and environmental risks in the remuneration systems in order to promote behaviors consistent with the strategy adopted by Fineco in this area. To this end, the objective linked to Fineco's environmental performance was strengthened by envisaging the development of a new "green finance" product, in the context of maintaining the EMAS environmental certification also through the achievement of the goals defined by the Environmental Programme.
The Board of Directors, with the support of the Remuneration Committee, within the periodic review of the Remuneration Policy, analyzes the neutrality of the policies with respect to gender and monitors any gender pay gap (Gender Pay Gap) and the trend over time, according to the methodology described.
As part of the "pay for sustainable performance" principle and to further strengthen the alignment of managerial interests with those of the shareholders, minimum levels of shareholding for the Chief Executive Officer and General Manager and for Executives with strategic responsibilities are set to be achieved, normally, within 5 years of the first appointment and to be maintained for the entire duration of the office held.
Starting from 2023, the share ownership requirements for the Chief Executive Officer and General Manager are raised from 100% to 200% of the fixed remuneration and for Executives with strategic responsibilities from 50% to 100% of the fixed remuneration.
In compliance with the regulatory requirements, a 2:1 maximum ratio between variable and fixed remuneration is confirmed for the employees belonging to business functions.
For the Identified staff of the Company Control Functions, the variable remuneration cannot exceed 1/3 of the fixed remuneration. For the Head of Human Resources function and the Manager in charge of financial statement, the remuneration is predominantly fixed. For the aforementioned Functions, the incentive mechanisms are consistent with the assigned tasks.
For the Financial Advisors belonging to Identified Staff, a 2:1 ratio is adopted between the non-recurring and the recurring component of the remuneration.
The adoption of a 2:1 ratio between variable and fixed compensation has no implication on the Bank's capacity to continue to respect all prudential rules, in particular capital requirement.
The annual process of identifying the Identified Staff at group level is carried out by applying the qualitative and quantitative criteria required by the regulatory provisions introduced by Circular no. 285 of 2013 of the Bank of Italy and the EU Delegated Regulation no. 923/2021.
For 2023 the definition of the Identified Staff has been performed involving Compliance and CRO functions of FinecoBank S.p.A. The self-evaluation led to a total number of Identified Staff for 2023 equal to 24 employees and 11 Financial Advisors.
FinecoBank's 2023 Incentive System confirms the "Bonus Pool" approach, which provides for a strong link between remuneration, company results, risk profile and sustainable profitability.
Specific entry conditions are defined, which act as ex-ante risk adjustment mechanisms and assess the Group's performance in terms of profitability, capital and liquidity. Only if all entry conditions are met the bonus pool is confirmed with the possibility of applying further adjustments based on the overall assessment of the risk factors of the so-called "CRO dashboard".
Once the bonus pool is defined, individual bonuses are determined in line with the annual performance appraisal process, based on the principles of transparency and clarity to ensure a direct link between variable remuneration and performance. Our performance assessment process requires that all Identified Staff are assigned specific individual objectives at the beginning of the year, with an adequate balance between economic-financial factors and non-economic factors (i.e. quantitative-strategic and qualitative-sustainable), also considering performance objectives linked to Risks, Compliance and the adherence to ESG values and factors, thus guaranteeing sustainability in the medium to long term for the Group and all stakeholders.
Individual bonuses for Identified Staff, in cash and shares in accordance with the provisions of the law, are delivered in several instalments, over a multi-year period, in line with the long-term interests of the shareholders.
Vested and paid variable remuneration is subject to ex-post corrective mechanisms (respectively malus and claw back) which take into account individual behavior.
In 2021, a share-based Long Term Incentive Plan for the three-year performance period 2021-2023 has been introduced to incentivize, motivate and retain selected Employees. The Plan sets performance goals linked to 2021-2023 targets in terms of Value Creation, Industrial Sustainability, Risk and Stakeholder Value, and the payment of a bonus in shares in instalments, over a multi-year period.
In particular, financial performance goals such as ROAC, Net Sales of AUM, Cost Income Ratio and Coast of Risk on commercial loans have been set. Three ESG parameters have been defined with regard to Stakeholder Value, namely customer satisfaction, people engagement and ESG rating for all new funds.
In addition, entry and malus conditions are defined on the basis of performance indicators in terms of profitability, capital and liquidity.
A risk adjustment mechanism is defined on the basis of indicators coherent with Fineco's Risk Appetite Framework.
Individual bonuses are delivered in FinecoBank shares, in instalments, over a multi-year period, subject to malus and claw-back condition, to compliance assessment of individual behaviors and to continuous employment.
Termination payments take into consideration long-term performance, in terms of shareholder added value, do not reward failures or abuses and shall not exceed in general 24 months of total compensation (including the indemnity in lieu of notice).
With reference to the termination Payments Policy, a specific formula for severance payments calculations is defined, while a maximum limit of 24 months of total remuneration is set, also comprehensive of the indemnity in lieu of notice. Total Remuneration is calculated taking into consideration the average bonus perceived in the three years prior the termination, after applying malus and claw-back conditions.
The provisions of Group FinecoBank's Compensation Policy also apply to the members of the Financial Advisors Network, in line with their compensation peculiarities. Following the incentive model provided for the Employees Identified Staff, the 2023 PFA Incentive System provides for a strong link between remuneration, risk and sustainable profitability.
Bonus allocation: incentives are allocated taking into consideration the available bonus pool and the individual performance evaluation based on specific performance indicators
Payout: individual bonuses in cash and shares, pursuant to law, paid out over a multi-year period, ensuring alignment with shareholders' interests; each payment is subject to malus and claw-back conditions, as well as to a compliance assessment of individual behaviors.
As part of the "pay for sustainable performance" principle and to further strengthen the alignment of managerial interests with those of the shareholders, starting from 2023, the share ownership requirements for the Chief Executive Officer and General Manager are raised from 100% to 200% of the fixed remuneration and for Executives with strategic responsibilities from 50% to 100% of the fixed remuneration.
A new section is included describing the Group's initiatives to support employees' wellbeing and work-life balance, with a specific focus on the measures aimed at sustaining employees' purchasing power in the actual macro-economic context.
Details - Section I paragraph 2.3.2
The results achieved by FinecoBank Group as of December 31, 2022 (2022 financial year) confirm the ability to adjust to the new scenario, with an approach focused on transparency and great respect of the customer. In particular:
Our advisors' transparent approach is crucial to anticipate our customers' needs, less influenced by volatility and more inclined to invest even in difficult phases. A trend supported by the increasing contribution of Fineco Asset Management (also FAM), able to offer investing solutions characterized by great efficiency and fair pricing. All this perfectly matches with the results of brokerage, structurally growing and continuing to increase its market share.
In line with the most recent regulatory updates4 , paragraph 6.1 of Section II displays the annual variation of Company results and the other required information.
The 2022 remuneration report (Section II) - issued pursuant to art. 123-ter of Legislative Decree 58/1998 (Consolidated Text of Finance" - "TUF"), as updated by Legislative Decree May 10, 2019, n. 49, and pursuant to Consob Regulation n. 11971 of 14 May 1999 (Regolamento Emittenti), as updated with the Decision n. 21625 of December 11, 2020 - provides the description of our compensation practices and the implementation outcomes of FinecoBank Incentive Systems, as well as remuneration data, with a focus on Identified Staff, defined in line with regulatory requirements.
Full disclosure on compensation payout amounts, deferrals and ratio between variable and fixed components of remuneration for Identified Staff is provided in Section II, including the data regarding members of the Board of Directors and the Board of Statutory Auditors, and the Executives with strategic responsibilities.
Data pursuant to sect. 84-quarter Consob Issuers Regulation no. 11971, as well as the information on incentive systems under 114-bis of legislative decree 58/1998 ("Consolidated Text of Finance" – "TUF") are included in this document as well as in Annex II5.
4 Update of Consob Regulation no. 11971 of 14 May 1999 (Regolamento Emittenti), as of December 11, 2020
5 Annex II: Compensation systems based on financial instruments for FinecoBank staff
Considering the overall business results achieved by the Company and on the basis of the elements reported in Section II – paragraph 3, the Board of Directors, upon the favorable opinion of the Remuneration Committee, assessed positively the 2022 Chief Executive Officer and General Manager's performance, awarding a shortterm variable bonus equal to € 860,000 in line with the pay for sustainable performance principle.
For the purpose of applying the ratio between variable and fixed remuneration, it should be noted that the Chief Executive Officer received a fixed remuneration of € 1,000,000 and that an annual pro-quota of € 1,000,000 relating to the long-term variable remuneration (LTI 2021-2023)6 is also included as variable remuneration, in line with the applicable legislation.
The € 860,000 bonus linked to the short-term incentive system awarded for the 2022 performance will be delivered in cash and in shares, with an upfront portion equal to 40% and a deferred portion equal to 60%, according to the deferral scheme described in Section II p. 3.1, which considers the period of unavailability of the shares both upfront and deferred, as required by law.
6 See the representation of the CEO/GM's remuneration. It should be noted that the term vesting refers to the performance period of the 2021-2023 LTI Plan
2023 remuneration policy
| 2. | FUNDAMENTALS | 20 |
|---|---|---|
| 2.1 | Governance | 20 |
| 2.1.1 | Role of the Board of Directors | 20 |
| 2.1.2 | Role of the Remuneration Committee | 20 |
| 2.1.3 | Role of the other Committees | 20 |
| 2.1.4 | Role of the FinecoBank Group's functions | 21 |
| 2.2 | Continuous monitoring of market trends and practices (Benchmarking) | 22 |
| 2.3 | Remuneration system and ESG strategy | 24 |
| 2.3.1 | Gender neutrality in the remuneration system | 26 |
| 2.3.2 Employees' working conditions | 27 | |
| 2.4 | Compliance Drivers | 28 |
| 2.5 | Pay for sustainable performance | 32 |
| 2.5.1 | Definition of performance targets | 32 |
| 2.5.2 Performance appraisal | 32 | |
| 2.5.3 Payments of variable compensation | 32 | |
| 2.5.4 Share Ownership Guidelines | 35 | |
| 2.5.5 Exemptions in case of exceptional circumstances | 35 | |
| 3. | COMPENSATION STRUCTURE | 36 |
| 3.1 | Ratio between variable and fixed compensation | 37 |
| 3.2 | Employees | 38 |
| 3.3 | Financial advisors | 41 |
| 3.4 | Sale staff (Employees and third personnel) | 43 |
| 3.5 | Non-executive members of administrative and auditing bodies | 43 |
| 4. | 2023 COMPENSATION SYSTEMS | 45 |
| 4.1 | Process to define identified staff | 45 |
| 4.2 | 2023 incentive system for employees identified staff | 46 |
| 4.3 | 2023 incentive system for financial advisors identified staff | 55 |
| 5. | 2021-2023 LTI PLAN | 60 |
5.1 2020-2023 long term incentive plan for employees 60
Integrity is at the core of our values, as a condition to transform profit into value for our stakeholders.
By upholding the standards of responsible behaviors and values which drive our mission, our compensation strategy represents a key instrument to enhance and protect our reputation and to create long-term value for all stakeholders.
Also through appropriate compensation mechanism, we aim to create a work environment which is comprehensive of any form of diversity and which fosters and unlocks individual potential, to attract, retain and motivate highly qualified employees.
Relying on our governance model, our Compensation Policy sets the framework for a common and coherent design, implementation and monitoring of compensation practices across our Company that reinforce sound risk management policies and our long-term business strategy.
To ensure the competitiveness and effectiveness of remuneration as well as transparency and internal equity, the key principles of our Compensation Policy are:
Our compensation governance model aims to assure clearness, transparency and reliability in the governance processes related to remuneration through an appropriate monitoring of the Group's remuneration practices by ensuring that decisions are made in an independent, informed and timely manner at appropriate levels, avoiding conflicts of interest and guaranteeing appropriate disclosure in full respect of the general principles defined by Regulators.
The Board of Directors of FinecoBank, in line with the relevant legislation, prepares, submits to the Shareholders' Meeting and reviews, at least7 on an annual basis, the Remuneration Policy and is responsible for its correct implementation. In particular, it ensures that the incentive systems are consistent with the overall choices of the Group in terms of risk assumption, strategies, long-term objectives, corporate governance and internal controls structure. Furthermore, it ensures that the remuneration and incentive systems are suitable for ensuring compliance with the provisions of the law, regulations and statutory provisions as well as codes of ethics or conduct, promoting the adoption of compliant behaviors.
The Board of Directors with the support of the Remuneration Committee analyzes the neutrality of the policies with respect to gender and monitors any gender pay gap.
The Board of Directors established a Delegation of Powers system to regulate appropriately effective decision-making processes throughout the organization.
In particular, the Remuneration Committee is vested with the role of providing advice and opinions to the Board of Directors with regard to Remuneration strategy. It also involves Risk Management and Compliance functions, and it receives the support of an independent external advisor, if required and needed, in order to make the incentives underlying the remuneration system consistent with the management of risk, capital and liquidity profiles.
The main topics discussed by the Committee are also brought to the attention of the Board of Statutory Auditors, prior to their submission to the Board of Directors. The Remuneration Committee consists of 3 non-executive members8 .
The Risks and Related Parties Committee supports the Board of Directors in order to ensure that the Remuneration Policy is consistent with sound and effective risk management.
In particular, without prejudice to the responsibilities of the Remuneration Committee, the Risks and Related Parties Committee is involved in the process of identifying the Group's Identified Staff and ascertains that the incentives underlying the remuneration and incentive system are consistent with the Risk Appetite Framework, taking into account in particular risks, capital and liquidity, in line with current legislation9 .
The Risks and Related Parties Committee is involved in defining the remuneration and in setting/evaluating per-
7 In addition to the periodic review, the remuneration policy can be reviewed in a timely and efficient manner upon any relevant and significant amendment to the business activities or structure, with particular reference to the case in which there is a residual risk of detriment to the clients stemming from it.
8 For details on the composition and activities of the Remuneration Committee, please refer to the specific paragraph in Section II, paragraph 2.1
9 Cf. Circ. no. 285 of Bank of Italy and EBA Guidelines "Guidelines for sound remuneration policies pursuant to EU Directive no. 36/2013
formance objectives of the Head of Compliance, Risk Management, Internal Audit and Anti-Money Laundering Function, expressing a formal opinion about the Head of Internal Audit Function.
In addition, within the Remuneration Policy, the Corporate Governance and Environmental and Social Sustainability Committee is also involved with respect to the Group's sustainability strategy (such as, for example, the definition of ESG objectives).
The Compensation Policy of FinecoBank Group, as drawn up by the Human Resources function, with the involvement of other company functions according to the area of expertise, is validated by the Compliance and Risk Management functions, prior to being submitted to the Remuneration Committee. Yearly, the Remuneration Committee proposes and submits the Compensation Policy to the Board of Directors for approval. As a last step, the document is presented to the Shareholders' Meeting for approval, in line with the regulatory requirements10.
The principles of Fineco Compensation Policy are applicable to the entire organization with regard to:
The Human Resources function, interacting with the Remuneration Committee, drafts the Remuneration Policy, defines the incentive systems and the remuneration levels, taking care of the aspect of neutrality with respect to gender, with the aim of motivating and retaining personnel and contributing to ensure alignment with the long-term strategies.
With particular reference to the incentive systems for Financial Advisors, the function collaborates with the PFA Network Commercial Department & Private Banking and Network Controls, Monitoring and Network Services Department.
In addition, with respect to financial data, the Human Resources function involves the Manager in charge of the financial statements (also CFO), while for all ESG topics within the Compensation Policy is supported by the Sustainability Team.
The Compliance function operates in close coordination with the Human Resources function, in order to support the design and the definition of compensation policy and processes and to evaluate them for the profiles in scope.
In this framework, the Compliance function verifies the consistency with "the goal of complying with regulations, articles of association and any other code of ethics or other standards of conduct applicable to the bank, so that compliance risks mostly embedded in the relationship with customers are duly contained"12.
In particular, the Compliance function evaluates, for all related aspects, Fineco Compensation Policy and – according to the applicable regulations – the incentive systems designed by the Human Resources function for the employees, and by PFA Network & Private Banking Department/Network Controls, Monitoring and
10 Cf. art. 123 ter Legislative Decree no. 58/1998
11 The Human Resources function in FinecoBank is carried out by the Chief People Officer Department
12 Cf. Bank of Italy, Circular no. 285. The corporate control functions of FinecoBank and FAM collaborate and share each other all the relevant information.
Service Department for the Financial Advisors. It provides suggestions – as far as it is concerned – for the design of compliant incentive systems. Furthermore, the Compliance function is involved in the process for the identification of Group's risk takers, for all aspects that fall within its perimeter.
In accordance with the regulatory framework and our governance, the guidelines for the definition of the incentive systems for non-Identified Staff population of FinecoBank are set, in collaboration with the Compliance function, for all related aspects:
The consistency between remuneration and accountable and sustainable risk assumption is guaranteed through rigorous governance processes based on informed decisions taken by the Corporate Bodies. Compensation plans include the risk adjustment appetite defined through the evaluation of the consistency with the results achieved and the Fineco Risk Appetite Framework.
The CRO function is constantly involved in the definition of the remuneration policy, the incentive systems and the compensation processes as well as in the definition of targets, in the individual performance appraisal, in the ex-ante and ex-post risk adjustment mechanism and in the identification of the Group's Identified Staff. This involvement implies a direct link between the Bank incentive mechanisms, selected metrics of the Risk Appetite Framework, the validation of performance and pay, so that the incentives are consistent with the risk assumption defined and approved by the Board of Directors.
Within the remuneration governance process, the Internal Audit function assesses yearly the consistency of the implementation of policies and practices with the Compensation policy that was approved and the regulatory framework and performs an audit on data and processes. The function provides a final assessment on the remuneration practices, providing recommendations aimed at improving the processes and informing the competent Bodies on any findings, in order to adopt corrective measures. Yearly the AGM is informed about the results of the audit.
The Corporate Control Functions involved in designing, monitoring and reviewing remuneration policies and practices have access to all relevant documents and information, which are drawn up in a transparent way, in order to understand the background and decisions that led to remuneration policies and procedures14.
With specific reference to Identified Staff, an independent external advisor supports the Remuneration Committee on the definition of a list of selected competitors that represent our peer group for the purpose of compensation benchmarking analysis. The identification of our peer group took into consideration a panel of Italian financial intermediaries listed on the FTSE MIB or FTSE MidCap stock indexes and comparable from the point of view of the applicable regulations (Banking and / or Asset Management), as well as in terms of market capitalization, total assets, dimension or business model, to assure a competitive alignment with the market of reference.
The results of this analysis are provided to the Remuneration Committee, in order to support the formulation of
13 The Risk Management function is represented in FinecoBank by the CRO Department. The two terms are used interchangeably throughout the document.
14 Cf. ESMA Guidelines on certain aspects of the MiFID II remuneration requirements
opinions to the Bodies of the Bank responsible for taking such decisions.
Through benchmarking, we aim at adopting a competitive compensation structure for an effective retention and motivation of our key resources, as well as for defining payments that are consistent with the long-term value for stakeholders.
The compensation structures, which are defined in relation to business or market-specific benchmarking, are in any case aligned with the values of the Group, with particular reference to compliance and sustainability.
The definition of the Compensation Policy for the Identified Staff, both employees and Financial Advisors, with particular reference to the design of the 2023 incentive systems, takes into account specific benchmarking analysis based on our peer group.
The peer group used to benchmark compensation policy and practices with particular reference to Identified Staff employees has been defined by the Remuneration Committee upon the proposal of the independent external advisor.
The peer group, subjected to annual review, for 202315 includes:
The Remuneration Committee constantly monitors the peer group, with particular reference to the Chief Executive Officer and General Manager, and in the event of aggregation or de-listing processes, makes the appropriate adjustments in line with the comparability criteria described above.
The benchmarking analysis shows that the CEO and General Manager fixed remuneration is positioned below the median considering the peer group.
In addition to what mentioned above, for the Chief Executive Officer and General Manager, compensation trends are monitored also with respect to an international panel composed by European Banking Groups of significant size and complexity.
15 No variations compared to the 2022 peer group
Fineco Group is aware that its strategy, oriented to a sustainable and organic growth, should necessarily be sided by a progressive integration of ESG principles in its business choices and operations management.
During 2022, the "material topics" for the Fineco Group, a list of economic, environmental and social issues that form the basis for sustainability reporting and the definition of the sustainability strategy, were revised. The update was conducted by involving the Group's most relevant categories of stakeholders (employees, financial advisors, clients and investors), through the implementation of a survey aimed at assessing the relevance of these topics, considering the positive and negative impacts on society, environment and economy generated by Fineco and the greater riskiness for the Bank and its economic-financial performance.
The results of the survey allowed us to identify 19 priority topics, which were then merged in 10 material themes, in line with the ESG and reputational risk categories assessed in the Risk Inventory. The 10 material topics thus identified were discussed by the Corporate Governance and Environmental and Social Sustainability Committee and approved by FinecoBank's Board of Directors.
| PRIORITISED LIST OF MATERIAL TOPICS |
DESCRIPTION |
|---|---|
| Cybersecurity and information security |
• Identifying and managing information security risks • Ensuring the protection and confidentiality of information and data through the continuous development and strengthening of appropriate tools and technolo gies |
| Customer satisfaction |
• Ensuring customer focus by providing continuous assistance in the operational management of Fineco's services and guaranteeing efficient support • Listening to customer needs and expectations, supporting them in managing their savings through constant dialogue with the network of personal financial advisors and offering services and products focused on excellence |
| Innovation | • Investing in digitalisation through technological and innovative tools to improve operations, processes, products and services • Simplifying the lives of our customers through the development and continuous implementation of user-friendly products and services that meet their needs by harnessing technology |
| Responsible finance opportunities for return |
• Developing and implementing financial services and products that consider envi ronmental, social and governance matters while minimising risk, without sacrificing • Providing a product and service offering that promotes financial inclusion and access to financial services and products |
| Group's solidity and resilience |
• Adopting a corporate governance system that promotes clear and responsible banking, contributing to the creation of sustainable long-term value • Adopting a resilient business model capable of maintaining healthy operating and financial performance, ensuring the Group's capital strength • Protecting and strengthening the corporate identity and reputation |
| Fairness and transparency of information |
• Promoting ongoing, transparent and comprehensive dialogue with the financial community, in line with the company strategy of creating value for shareholders over the long term • Preparing and adopting instruments governing behaviour and values that en sure integrity in business conduct • Clearly and transparently communicating the services and products offered, as well as their conditions, to help customers understand them and make informed choices |
| Company ethics and compliance culture |
• Adopting and disseminating ethical values and conduct, including conduct to safeguard and protect personal data of the Bank's stakeholders, in order to en sure high standards of professional conduct and integrity in conducting the busi ness in compliance with applicable regulations |
| 25 | |
|---|---|
| PRIORITISED LIST OF MATERIAL TOPICS |
DESCRIPTION |
|---|---|
| Education and financial advice |
• Promoting improved understanding of the financial products and the concepts underlying them among the community, with a view to developing the abilities and knowledge needed to comprehend the risks and the opportunities of making informed financial choices • Establishing a relationship of trust between customers and advisors, based on the advisor's ability to identify customer needs and expectations, and to devise and agree on investment and overall wealth management solutions |
| Fair and inclusive work environment through talent attraction and retention strategies and meritocratic remuneration policies |
• Creating and ensuring a fair and inclusive work environment where people can realise their full potential and where appropriate remuneration and incentive policies are designed within strategies aimed at attracting, retaining and moti vating staff |
| Protection of the environment |
• Minimising the direct environmental impacts produced by adopting policies and measures aimed at reducing emissions and improving consumption efficiency to ensure responsible use of resources • Assessing and understanding the indirect environmental impacts related to the business and implementing climate change mitigation plans and actions |
As required by art. 5 EU Regulation no 2019/2088, the information on how the Remuneration Policy is consistent with the integration of sustainability risks are illustrated below.
In this respect, proceeding with the path already started, the 2023 scorecard of the CEO and General Manager16 linked to the short-term incentive system, and that of the other Identified Staff, includes, depending on the specific role, goals linked to sustainability intended as the capacity of creating and maintaining value for all the stakeholders in the medium-long term.
In particular, the "Stakeholder Value" macro-goal, in coherence with the Group 2020-2023 Multi Year Plan and the material topics includes, in line with 2022, the objectives relating to safeguard diversity, responsible finance, reducing environmental impact and the additional KPI linked to Fineco's score in the main ESG ratings. Among the new features of the 2023 scorecard, the ESG ratings at the basis of the assessment of the maintenance or improvement of the score assigned to Fineco by the ESG rating agencies have been further detailed. Furthermore, the Group is increasingly attentive to the integration of climate and environmental risks in the remuneration systems in order to promote behaviors consistent with the strategy adopted by Fineco in this area. To this end, the objective linked to Fineco's environmental performance was strengthened by envisaging the development of a new "green finance" product, in the context of maintaining the EMAS environmental certification also through the achievement of the goals defined by the Environmental Programme.
In addition, the macro-goal "Tone from the top" regarding integrity of conduct and the spreading of the compliance culture within the organization has been confirmed.
Additionally, the long-term incentives system (2021-2023 LTI Plan) for employees includes among its performance drivers three ESG KPI's related to customer satisfaction, employee's engagement and ESG rating for all new funds, in coherence with the Multi Year Plan.
FinecoBank Group is committed to develop and implement a common risk culture at all organizational levels. This provides a fundamental condition to grant a sustainable return in the long term. Among the risks with potential ESG implications, are worth mentioning operational risks and reputational risks, which could be determined by specific social, environmental and customer relationship risks.
16 Cf. paragraph 4.2 for CEO and General Manager individual scorecard.
The FinecoBank Group is committed to ensuring that the Compensation Policy is gender neutral, thus concurring to pursue equal opportunities in terms of professional development and remuneration.
From a remuneration point of view, the goal is to ensure that, for the same activity carried out, corresponds an equal level of remuneration. Furthermore, the Group aims at preserving diversity with the ultimate scope of creating a non-discriminatory working environment that offers equal opportunities17.
In order to increase the sensitivity and the attention towards gender equality and diversity at all levels of the organization and to pursue gender neutrality in remuneration policies, the following measures were adopted, in application of the provisions of Circular no. 285 of 2013 of the Bank of Italy and the EBA Guidelines:
17 For more details on equal opportunities initiatives and non-discrimination, please refer to the 2022 consolidated non-financial statement of the FinecoBank Group.
18 As defined by the Circ. no. 285 of 2013 (37th update)
19 To this end, the Global Job Model is used: an organizational system that describes, standardizes and calibrates all roles. The "Banding" system (Global Banding Structure) is one of the main elements of the Global Job Model.
20 in accordance with the LD 254/2016
In Fineco, people constitute one of the main Key Success Factors. The goal that we aim to achieve is to become "The Place To Be", a workplace in which everyone can fully express their potential and aspirations, free of any form of discrimination, contributing to the success and sustainability of the business.
With this aim, we always invest in people wellbeing and engagement, maintaining a fair and inclusive working environment as well as an adequate work-life balance. The Welfare System is continuously evolving and improving, covering 4 macro areas:
With reference to work-life balance, employees may elect flexible arrangements in terms of working hours and remote working, maintaining the right to receive meal vouchers.
There are also several initiatives supportive of families, like an ad-hoc maternity medical package within the medical insurance as well as medical assistance for common-law spouses, and conventions with nursery school and baby-sitting service. Finally, additional permits are available for breastfeeding, for key life events (like children graduation, mortgage signing, etc.) or to assist ill children or family members with disabilities.
In addition, FinecoBank is committed to ensuring employees' psychophysical well-being: to this end, the company's offices have been renovated in order to create new spaces dedicated to sociability, wellbeing and healthy lifestyles.
In consideration of the macro-economic context, characterized by a high level of inflation and rising energy prices, Fineco is committed to support the employees' purchasing power through specific initiatives.
For example, in 2022 the employees received, in addition to a Productivity Award21 of about 2,210.0022 euros, a one-time € 400 net welfare contribution for purchasing goods and services.
The above-mentioned welfare initiatives, in line with our total reward approach, positively affect employee engagement and retention purposes.
More details about benefits are contained in Section I, paragraph 3.2.3. The welfare initiatives adopted in 2022 are described in the Consolidated Non-financial Statement 2022.
21 Executives are not included among beneficiaries of the Productivity Award
22 This amount is granted in case of electing to credit the award to welfare wallet.
One of the key principles of the Compensation Policy is full compliance with the laws, regulations and statutory provisions as well as with codes of ethics or conduct, with the aim of promoting the adoption of compliant behaviors and in order to protect and strengthen our reputation, as well as prevent or manage potential conflicts of interest between roles within the Bank or towards our customers.
Among the qualitative/sustainable goal assigned to Identified Staff, there is a specific one concerning the integrity of conduct and the spread of compliance culture within the organization ("Tone from the top"), as a driver of sustainable value creation. This demonstrates the importance of full compliance with internal and external regulations for the FinecoBank Group.
In this context, with the support of the Compliance function, specific "Compliance drivers" requirements have been defined to support the design of remuneration and incentive systems.
define incentives to encourage responsible professional conduct and fair treatment of clients and to avoid conflicts of interest. This principle is also applicable to the remuneration and criteria used to evaluate the performance of members of the bank's management body and senior management, in order to avoid conflicts of interest or incentives that could lead them or relevant individuals to favor their own interests or those of the firm to the potential detriment of any client
promotion of a customer-centric approach which places customer needs and satisfaction at the forefront and which will not constitute an incentive to sell unsuitable products to clients
consider, even in remuneration systems of the external networks (Financial Advisors), the principles of fairness in relation with customers, management of legal and reputational risks, protection and loyalty of customers, compliance with the provisions of law, regulatory requirements, and applicable self-regulations
introduce corrective mechanisms in the remuneration systems, based on the assessment of compliance and quality indicators of the behavior / operations of the Financial Advisors, which can lead to a reduction of the bonuses accrued within the incentive plans of the network with the objective of promoting and encouraging scrupulous compliance with legislation and company processes
create incentives that are appropriate in avoiding potential conflicts of interest with customers, considering fairness in dealing with customers, transparency and the endorsement of appropriate business conduct, in the best interest of the customer
to promote responsible risk management for personnel assigned to the evaluation of credit rating, and to consider the results of complaints management and customer care quality for personnel who handles complaints
avoidance of incentives on a single product / financial instrument or specific categories of financial instruments, as well as single banking product
for Commercial Network Roles, goals shall be defined including drivers on quality/riskiness/sustainability of the products sold, in line with client risk profiles. Particular attention shall be paid to the provision of non-economics goals for customer facing roles selling products covered by MiFID Directive; for those roles, incentives must be set in order to avoid potential conflict of interest with customers
in compliance with the applicable regulatory provisions (Circular no. 285/2013 Bank of Italy, part. I, Title IV Chapter 2 Section III), maintenance of adequate balance of fixed and variable compensation elements also with due regard to the role and the nature of the business performed. The fix portion is maintained sufficiently high in order to allow the variable part to decrease, and in some extreme cases to drop down to zero
in case of a multiple contracts offer aside of a credit contract, if the side contract is optional, even through third parties, in order to avoid the offer of unsuitable, incoherent and not appropriate product to the customer's interests and objectives, remuneration and appraisal of sale staff (employees and third personnel) do not incentive the combined sale of the two contracts more than a separate sale of the same products.
| COMPLIANCE DRIVERS |
FinecoBank Group adopts and applies remuneration policies and practices that take into account consumers' rights and interests, in relation to the products offer. To this extent, Fineco ensures that: a) the remuneration does not provide, among others, an incentive to pursue own interests or the Company's, with a harm for its customers; b) proper measures are in place to consider any risk that could harm the customers, providing for organisational measures to adopt regarding the launch of new products or services, that appropriately take into account their remuneration policies and practices and the risks that these products or services may pose. In particular, before launching a new product, it should be necessary to assess whether the remuneration features related to the distribution of that product comply with the firm's remuneration policies and practices and therefore do not pose conduct of business and conflicts of interest risks. c) the variable remuneration: i. is linked to clearly predetermined and communicated quantitative and qualitative criteria and such that some criteria, especially qualitative criteria, are not made meaningless; ii. does not provide an incentive to offer a specific product or a specific category of products or a combination of products (i.e. because those are particularly convenient for the Company or the relevant subjects or the intermediaries), if doing so would harm the customer in terms of unsuitability of the product for its financial needs, or because it is more expensive than another equivalent and suitable product; iii. is adequately balanced with respect to fixed remuneration; iv. is subject to adjustment mechanisms that can reduce the amount or eliminate it, for instance in case of behaviors that directly or indirectly damaged the costumers, as well as in case of a violation of the relevant regulation (Title VI T.U.) or the related provisions that protect the customers' interests; v. the criteria used to assess career progression comply with the MiFID II remuneration requirements. For instance, the career progression management systems should not be used to reintroduce quantitative commercial criteria upon which may depend relevant persons' career advancement and having an impact on their (fixed and/or variable) remuneration that may create conflicts of interests that may encourage such relevant persons to act against the interests of their firms' clients. |
|
|---|---|---|
| COMPLIANCE | for the purpose of granting incentive, the absence of any ongoing or closed proceeding or disciplinary sanctions and/or sanctions by regulatory authorities should be considered. In the presence of these measures, the possible alloca tion of the incentive will require a written explanation, which will make possible a case-by-case verification of the managerial decisions. For personnel in internal or external networks and for those with control tasks, special reference is made to the supervisory regulations on banking transparency and fairness of relations be tween intermediaries and customers, as well as those on anti-money laundering; |
|
| provide for clauses for the cancellation of the incentive in the event of significant inappropriate behavior or disciplinary actions |
||
| rewarding system communication and reporting phases shall clearly indicate that the final evaluation of the employee achievements will also rely, according to local requirements, on qualitative criteria such as: - compliance to external (i.e. laws/regulations) and internal rules (i.e. policies) and company values - mandatory training completion - existence of disciplinary procedures officially activated and/or disciplinary sanc tions actually applied |
With regard to the network's Financial Advisors, particular attention is paid to all commercial initiatives that involve the aforementioned network23.
Such initiatives may be organized after the evaluation and authorization of the competent Bank's Bodies and they represent business actions aimed at providing guidance to the sales network towards the achievement of the period's commercial targets (also intermediate) and with a direct impact on the budget and related incentive systems.
The initiatives can also have the function to accelerate the achievement of certain objectives of the incentive system.
The aforementioned compliance requirements ("compliance drivers") must also be considered for the network of Financial Advisors (PFA), as applicable.
To further ensure compliance with internal and external regulations, there are specific provisions applicable to the functions and bodies involved in conducting controls:
• In order to guarantee the independence of the corporate control functions (Internal Audit, Compliance, Risk Management, Anti-Money Laundering) from the results of the areas they monitor and to minimize potential conflicts of interest, no economic objectives or objectives linked to the economic results of the monitored areas are assigned. The individual objectives for the employees of these functions primarily reflect the performance of their own function.
• The variable remuneration of Identified Staff of the Company Control Functions cannot exceed 1/3 of the fixed remuneration in line with the applicable regulatory framework and the incentive systems reflect the nature of their responsibilities and consistent with market practices.
• In order to adequately remunerate qualified and expert personnel in these functions, ensuring competitiveness in terms of total compensation and facilitating job rotations between business and control functions within the Group, the Identified staff belonging to the corporate control functions benefit from a specific "Role based allowance" on the basis of global band title*. Role-Based Allowances (RBA) are considered fixed remuneration.
• From a governance point of view, the Remuneration Committee directly supervises the remuneration of all Identified Staff belonging to the corporate control functions, regardless of their global band title, making proposals to the Board of Directors on the amounts of remuneration to be awarded. In addition, the Corporate Bodies Regulation provides that the Risk and Related Parties Committee is involved in setting and evaluating performance goals and in defining the overall remuneration of the Heads of corporate control functions.
• For the above-mentioned Heads of Corporate Control Functions, starting from 2023, the weight of the Tone from the top objective has been increased to 20 percent of the overall scorecard in view of the specificity of the role.
* Defined according to the Global Job Model, an organizational advanced system describing, standardizing and allowing for the calibration of all roles. The "Banding" system (Global Banding Structure) is one of the fundamental elements of the Global Job Model, and it consists of nine bands. RBAs are awarded individually to the employee Identified Staff appointed as Responsible of the Company control functions with a band equal or higher than Senior Vice President. The annual gross amount is equal to 20,000 EUR for SVP, 40,000 EUR for EVP and 60,000 EUR for SEVP.
23 See paragraph 3.3 for details.
The objectives are defined consistently with the strategic guidelines, in line with the 2023 objectives linked to the Group's 2020-2023 Strategic Plan. Performance is also evaluated in terms of risk-adjusted profitability taking into consideration ex-ante and ex-post mechanisms.
Incentive systems must not favor in any way risk-taking behaviors in excess of the risk appetite envisaged by the business strategies; in particular, they should be aligned with the Risk Appetite Framework ("RAF").
24 As provided by Directive no. 2013/36/EU article 94, 1 a). Financial criteria include performance indicators reported in the annual financial report and in particular linked with the profit and loss report, the balance sheet and relevant components or indicators.
25 Cf. Circ. no. 285/2013 Bank of Italy and EBA Guidelines pursuant to the art.94 Dir. 2013/36/EU.
of circumstances subsequently proven to be erroneous26;
26 Provision envisaged with particular reference to the Chief Executive Officer and other Executives with Strategic Responsibilities, in the Corporate Governance Code of Borsa Italiana. The malus and claw-back clauses are managed by the plan rules of the incentive plans.
Fineco reserves the right to activate malus and claw-back mechanisms, meaning respectively the reduction/cancelation and the return of any form of variable compensation.
The malus clause (i.e. the reduction/cancelation of the variable remuneration) can be activated with reference to the variable remuneration to be paid or awarded but not already paid, related to the performance period, which the compliance "violation" is referred to. In case the variable pay affected is not enough to ensure an adequate malus application, the reduction can be referred also to other components of variable remuneration.
The claw-back clause (i.e. the restitution of all or part of the variable remuneration) can be activated with reference to the overall variable remuneration already paid, awarded for the performance period which the "violation" is referred to, without prejudice to more restrictive local laws or provisions and as legally enforceable.
The claw-back clause can be activated for a period up to 5 years after each tranche (upfront or deferred) has become available to the beneficiary (that means after deferrals and/or applicable retention periods), even after the termination of the employment relationship and/or of the role and takes into account legal, pension and tax aspects and the time limits provided by law and practices locally applicable.
Malus and claw-back can be activated upon the assessment of certain behaviors within the referred period, which starts with the performance period and ends with the tranche becoming available to the beneficiary (that means after deferrals and/or applicable retention periods), in case the staff*:
has adopted conduct that does not comply with legal, regulatory or statutory provisions or with codes of ethics or conduct applicable to the bank, which resulted in a significant loss for the bank or for its customers;
has displayed further conduct that does not comply with legal, regulatory or statutory provisions or with codes of ethics or conduct applicable to the bank, in the cases envisaged by the latter; for example, any violations of the regulatory provisions on banking transparency and fairness of relations between intermediaries and customers under, among others, MIFID regulations, as well as those on anti-money laundering, are relevant;
has contributed with fraudulent behavior or gross negligence to incurring significant financial losses, or by his conduct had a negative impact on the risk profile or on other regulatory requirements at Bank or FinecoBank Group level;
has engaged in misconduct and/or fails to take expected actions which contributed to significant reputational harm to the Bank or the FinecoBank Group, or which were subject to disciplinary measures by the Authority;
is the subject of disciplinary measures and initiatives envisaged in respect of fraudulent behavior or characterized by gross negligence during the reference period;
has infringed the requirements set out by articles 26 TUB and 53 TUB, where applicable, or the obligations regarding remuneration and incentives.
In the year 2018 the Compliance Breach Committee was established**, composed of the Chief Executive Officer and General Manager, the Head of Human Resources and the Head of Compliance***. With reference to FinecoBank's Identified Staff, the Committee has the function of assessing potential impacts on variable remuneration following the ascertainment of any anomalous behavior or violations, possibly involving sanctions, or of any sanctioning proceedings or imposition of sanctions in the process of being initiated or initiated and in any case not yet defined against the parties concerned or the Bank, following notification by the Bank or Internal Audit structures or Public Authority.
In particular, ex-post clauses can be applied to Identified Staff who are directly responsible for a compliance breach, considering whether they should also be applied to identified staff whose responsibilities include the areas where the relevant events occurred.
On the basis of the analyzes carried out and in relation to the seriousness of the violation, the Committee proposes to the Board of Directors, after examination of the Remuneration Committee - on the basis of the established governance - the consequent measures to be adopted with reference to the variable remuneration of the Identified Staff (reduction/cancellation – (malus) or return – (claw-back).
** For the PFA Identified Staff, the functions of Compliance Breach Committee are covered by the competent Disciplinary Committee
*** The Head of Internal Audit is a permanent guest of the Committee, without voting rights.
* Employees and all personnel, including Personal Financial Advisors.
In line with the "pay for sustainable performance" principle, minimum levels for company share ownership are set for Executives, aiming to align interests of top management to those of shareholders by assuring appropriate levels of personal investment in FinecoBank shares over time. As part of our total compensation approach, we offer equity incentives that provide for opportunities of share ownership, in compliance with the applicable laws. In order to further strengthen the alignment of managerial interests with those of the shareholders, starting from 2023, the share ownership requirements for the Chief Executive Officer and General Manager are raised from 100% to 200% of the fixed remuneration and for Executives with strategic responsibilities from 50% to 100% of the fixed remuneration.
| POPULATION | SHARE OWNERSHIP | % |
|---|---|---|
| CEO and General Manager | 2 x annual fixed remuneration | 200% |
| Executives with strategic responsibilities | 1 x annual fixed remuneration | 100% |
As a rule, the established levels described in the above table should be reached within 5 years from the first appointment in the covered role or starting from January 1, 2023, for those already holding the above positions, and they should be maintained for the entire duration of the role covered.
The established levels should be reached through a linear pro-rata approach, providing for a minimum portion every year.
Involved Executives are also expected to refrain from entering into schemes or arrangements that specifically protect the unvested value of equity granted under incentive plans ("hedging").
Any violation of the above mentioned minimum levels and any form of hedging shall be considered in breach of compliance rules with such consequences as provided for under enforceable rules, provisions and procedures.
As provided by art. 123-ter, letter 3-bis of TUF amended in 2019, in case of exceptional circumstances Fineco-Bank can temporarily derogate from its remuneration policies, still taking into account all legal and regulatory restrictions. Exceptional circumstances are intended to be only situations for which the exemption from the remuneration policy is necessary in order to preserve the Company's long-term interests and sustainability, or to ensure its market competitiveness. For example, but not limited to, exceptional circumstances are defined as extraordinary and unforeseeable circumstances such as the case of resolution, post-resolution, change of control, negative impacts on shares resulting from divisions, capital reductions due to losses by share cancellation, etc.
The process is summarized as follows.
The Board of Directors, having heard the opinion of the Remuneration Committee and the Risk and Related Party Committee, can temporarily derogate from the remuneration policy in the aforementioned circumstances, in coherence with FinecoBank Group Global Policy on the management of transactions with individuals in potential conflict of interests whenever applicable, and limited to some elements defined in paragraphs 3.2 and 3.3 Section I, specifically the short and long term variable remuneration systems.
Information regarding the application of any exemption (in particular, the elements waived, a description of the exceptional circumstances that carry out the exemption, the process followed and the compensation paid due to the exemption) will be disclosed within the Remuneration Report, submitted to the Shareholders' Meeting vote in the year following the application of the exemption.
Compensation levels and ratio between the fix and the variable component of the overall remuneration for Identified Staff are managed and monitored according to our business strategy and aligned with Group performance over time.
In compliance with the applicable regulations27, the adoption of the maximum pay ratio of 2:128 for personnel belonging to business functions is confirmed.
For the rest of the employees, a maximum ratio between the components of remuneration equal to 1:129 is usually adopted, except for the Identified Staff of the Company Control Functions30, for which it is provided that the variable remuneration cannot not exceed 1/3 of the fixed remuneration. For the Head of Human Resources and the Manager in charge of preparing financial statements, the remuneration is predominantly fixed. For the aforementioned Functions, the incentive mechanisms are consistent with the assigned tasks.
With reference to applicable regulations, for Financial Advisors belonging to Identified Staff, the 2:1 ratio is adopted between the non-recurring and the recurring component of the remuneration.
The adoption of a ratio of 2:1 between variable and fixed compensation doesn't have any implication on the Bank's capacity to continue to respect all prudential rules, in particular capital requirements.
| MAXIMUM RATIO BETWEEN VARIABLE AND FIXED COMPENSATION | |||
|---|---|---|---|
| Business functions | 2:1 | ||
| Identified staff of company control functions | 1:3 | ||
| Employees | Other employees | 1:1 | |
| Head of Human Resources and Manager in charge of preparing financial statements |
Fix>Var with respect of total compensation | ||
| PFA Identified Staff | 2:1 |
With reference to the CEO and General Manager, a maximum ratio of 2:1 between variable and fixed remuneration applies.
For the application of this ratio, considering a fixed remuneration of € 1,000,000, the maximum variable remuneration is as follows:
27 Cf. Circular no. 285/2013. In particular, for Fineco Asset Management DAC (FAM) employees not identified as Group's risk takers the sectorial regulation does not provide a pre-determined maximum cap to variable remuneration.
28 As approved by the Fineco Shareholders Meeting on June 5, 2014. The rationales of the original request did not change, thus no further maximum ratio approval is requested.
29 The variable component, if present, is contained for all the personnel of the corporate control functions and of the human resources function.
30 Meaning CRO, Compliance, Internal Audit and AML
Within the framework provided by its Compensation Policy, the Group is committed to ensure fair treatment in terms of compensation and benefits regardless of age, race, culture, gender, disability, sexual orientation, religion, political belief, marital status and any others personal characteristic.
Our total compensation approach provides for a balanced package of fix and variable, monetary and non-monetary elements, each designed to impact in a specific manner the motivation and retention of employees.
In line with the applicable regulations, particular attention is paid to avoid incentive elements in variable compensation that may induce to behaviours not aligned with the company's sustainable business results and risk appetite.
As a policy target, fix compensation for Identified Staff considers as a reference the market median, with individual positioning being defined on the basis of specific performance, potential and people strategy decisions. With particular reference to Identified Staff – within the governance defined according to the applicable laws and regulations - the Board of Directors, upon proposal of the Remuneration Committee, establishes the compensation structure for top positions, defining the mix of fix and variable compensation elements, consistently with market trends and internal analyses performed.
Moreover, the Board of Directors annually approves the criteria and features of Identified Staff incentive plans, ensuring the appropriate balance of variable reward opportunities within the pay-mix structure.
| TYPE OF REMUNERATION |
PURPOSES | FEATURES |
|---|---|---|
| 3.2.1. FIXED COMPENSATION | ||
| The fixed salary remunerates the role cov ered and the scope of responsibilities, re flecting the experience and skills required for each position, as well as the level of excellence demonstrated and the overall quality of the contribution to business re sults. |
Fixed salary is appropriately defined for the specific business in which an individual works and for the talent, skills and competencies. The relevance of fixed compensation weight is sufficient to reward the activity rendered even if the variable part of the remuneration package is not paid due to non-achievement of performance goals such as to reduce the risk of excessively risk-oriented behaviours, to discourage initiatives focused on short term results and to allow a flexible bonus approach. |
Specific pay-mix composed by fix and variable compensation is defined with respect to each target of employee population. With particular reference to Identified Staff, the Remuneration Committee proposes to the Board of Directors: • the criteria to perform market benchmarking analysis for each position in terms of compensation levels and pay-mix structure, including the definition of a specific peer group. • the positioning in terms of compensation, in line with relevant market's competitive levels, to define individual compensation reviews as necessary. |
| 3.2.2. VARIABLE COMPENSATION | ||
| The variable compensation includes pay ments depending on performance, inde pendently from how it is measured (prof itability goals, volumes, etc.), or on other parameters (e.g. length of service), and amounts agreed between the bank and personnel in view or upon the early termi nation of the employment or office (exclu ding termination benefits and indemnity in lieu of notice), carried interests and more generally any other form of remuneration that is not uniquely qualify as fixed remu neration. |
Variable compensation aims to remunerate achievements by directly linking pay to per formance outcomes in the short, medium and long-term, and risk adjusted. |
• Adequate range and managerial flexibility in performance-based pay-outs are an inherent characteristic of well-managed, accountable and sustainable variable compensation. • Incentives remunerate the achievement of performance objectives, both quantitative and qualitative. • An appropriately balanced performance based compensation element is encouraged for all employee categories as a key driver of motivation and alignment with organizational goals. • The systems features, including performance measures and pay mechanisms, must avoid an excessive short-term focus by reflecting the principles of this policy, focusing on parameters linked to profitability and sound risk management, in order to guarantee sustainable performance in the medium and long-term. |
| Incentive Systems linked to yearly perfor mance (Short Term Incentives or STI) |
Aim to attract, motivate and retain strategic resources in alignment with national and in ternational regulatory requirements and with best market's practices. |
• Pay-out is based on a "bonus pool" ap proach providing for a comprehensive performance measurement at individual and at Group level. • Reward is directly linked to performance, which is evaluated on the basis of results achieved and on the alignment with our leadership model and values. • Performance Management is the annual process of assigning objectives and evaluating them, which guarantees, in a fair and transparent manner, consistency between bonuses and individual performances for the entire organization. • Where foreseen by regulations, the pay-out is phased to coincide with an appropriate risk time horizon. The design features of incentive plans for Identified Staff are aligned with shareholder interests and long term, firm-wide profitability, providing for an appropriate allocation of a performance related incentive in cash and in shares, upfront and deferred. • The individuals' behaviors (compliance with internal and external rules and regu lations, absence of disciplinary actions and completion of mandatory training) are also elements on which individual incentives award is based. |
| 39 | |
|---|---|
| TYPE OF REMUNERATION |
PURPOSES | FEATURES |
|---|---|---|
| Long-term Incentive plans (Long Term In centive or LTI) |
The aim of these plans is to strengthen the link between variable pay and long-term re sults and to further align the interests of Man agement to those of Shareholders |
• For the 2021-2023 performance period, a share based Long Term Incentive Plan for selected Employees considered "key roles", has been approved. • The plan sets goals linked to the 21- 23 three-year targets, in terms of value creation, industrial sustainability, risk and stakeholder value, coherent with Group long term goals established in the 2020- 2023 Multi Year Plan. • The Plan provides entry and malus conditions, claw-back conditions and a specific risk adjustment mechanism. • The Plan provides for the payment of a bonus in FinecoBank shares, over a multi year period. |
| 3.2.3. BENEFITS | ||
| These include welfare benefits supple mentary to social security plans and are intended to provide substantial guarantees for the well-being of staff and their families during the active career as well as the re tirement. |
Benefits aim to reflect internal equity and overall coherence of our remuneration sys tems, catering to the needs of different cate gories as appropriate and relevant. |
• In coherence with Fineco Bank Group governance framework and Global Job Model, benefits are assigned against general common criteria for each employee category. • In addition, special terms and conditions of access to various FinecoBank Banking products and other services may be offered to employees in order to support them during different stages of their lives. • FinecoBank has always been attentive to the psychophysical well-being of its employees. In this context, various measures are in place to ensure an effective balance between work and private life, with particular attention to safeguarding of parenthood. In addition, employees can take advantage of benefits that improve contractual provisions and public services within of pension, health care and work-life balance support. |
| Insurance Plans | As part of the supplementary health care, our employees enjoy healthcare benefits that supplement social security plans. |
• Employees are offered a comprehensive Health Plan, extended to their tax dependent family members, which allows them to take advantage of various health services (e.g., surgeries, highly specialized treatments and diagnostics, dental coverage, physiotherapy and maternity related treatments, etc.) without advance payments or with the possibility to ask for reimbursement. • In addition, Employee Benefit insurance policies are available for all employees, covering the risk of professional and non professional injuries, permanent disability and death. Furthermore, a Professional Kasko policy, which covers damages to vehicles driven by the employee during a business trip, is available and an Extra Professional Kasko policy is offered at a discounted price. |
| Complementary pension plans Supplementary pension plans are a form of support for employees, supplementing the mandatory pension plan. |
• Complementary pension plans are offered by external pension funds, legally independent from the Group. In particular, the pension funds usually subscribed by employees are "closed" funds. • Subscribers can elect their contribution, depending on their own risk appetite, among investment lines characterized by different risk/yield ratios. • For employees who choose to join the reference Pension Fund for FinecoBank, with some exceptions, the Company recognizes a contribution calculated on the compensation useful for calculating the "Trattamento di Fine Rapporto", if the employee chooses to pay the contribution at his own expense. |
|---|---|
| Mobility management | • For employees with managerial qualifications and for those who, as part of their business, travel around the area for service reasons, a car is assigned for mixed use. The choice of available models is in line with the objectives set out in the Multi-Year Plan, providing only hybrid and / or electric cars, with the aim of reducing the environmental impact resulting from vehicular traffic. • The employees can take advantage of the specific initiatives included in the Commuter Benefit Plan aimed at reducing the environmental impact of vehicular traffic in urban and metropolitan areas. |
The last update of the remuneration policy in the event of early termination of the employment relationship ("Termination Payments Policy" so-called "Severance") has been approved by the Shareholders' Meeting on April 10, 2019, implementing the regulatory provisions provided by Bank of Italy Circular 285 and in particular the provisions on remuneration amounts agreed upon early termination.
With the exception of the notice required by law and Severance Payments, the aforementioned amounts constitute variable remuneration and should therefore be included in the calculation of the variable remuneration limit for Identified Staff, with the exception of:
the fees for non-competition agreements that do not exceed a fixed annual remuneration for each year of the term of the agreement
the amounts for the settlement of a current or potential litigation related to the termination of the employment relationship, if calculated on the basis of a predefined formula in the Policy.
Therefore, it has been determined a predefined formula for the calculation of severances that, if used, allows not to compute them within the maximum limit set for variable remuneration.
Reference is made to the aforementioned Policy regarding criteria, limits and authorization processes in relation to termination payments.
In general, the calculation of any severance pay-outs prescribed or suggested by the specific market of reference takes into consideration the long-term performance in terms of shareholder added value, as well as any local legal requirements, collective/individual contractual provisions, and any individual circumstances, including the reason for termination.
According to the Severance Policy, the maximum limit for termination payments - inclusive of the indemnity in lieu of notice – is equal to 24 months of total compensation (in any case, the amount of payments in addition to the indemnity in lieu of notice does not exceed eighteen months of total compensation), calculated considering the average of the incentives actually received in the 3 years preceding the termination, after the application of the malus and claw-back clauses. In any case, the termination payments do not exceed the limits foreseen by the laws and collective labour agreements.
As a rule, discretionary pension benefits are not granted and, in any case, even if they may be provided in the context of local practices and/ or, exceptionally, within individual agreements, they are paid consistently with the specific and applicable laws and regulations.
The individual contracts must not contain clauses envisaging the payment of indemnities, or the right to keep post-retirement benefits, in the event of resignations or dismissal without just cause or if the employment relationship is terminated following a public purchase offer. In case of early termination of the mandate, the ordinary law provisions would therefore apply.
The payments defined accordingly replace the provisions of the national collective contract of employment in case of termination, and they will be awarded only under subscription of an out of court agreement that implies a waiver by the beneficiary, with regards to any claim linked to the employment relationship and the role covered. These agreements are defined keeping into account all the applicable regulations; therefore, they do not include payments and awards due on the basis of law provisions and collective contract.
Additional elements of remuneration may be envisaged (so-called non-standard forms of remuneration), subject to a specific decision-making process through the involvement of the relevant functions and, where envisaged, by the corporate bodies, for instance welcome bonus, special award, retention bonus, role based allowance).
Welcome bonus, special award, retention bonus are considered variable remuneration and are limited only to specific situations related to hiring phases, launch of special projects, achievement of extraordinary results, high risk of leaving for critical/strategic employees/roles. Bonuses linked to the hiring of new staff cannot be paid more than once to the same person, neither by the bank nor by any other company of the banking group, and contribute to the determination of the limit to the ratio between fixed and variable remuneration of the first year, unless it is paid as a lump sum upon hiring.
Compensation linked to roles in specific company functions (so-called Role-Based Allowance) are considered fixed remuneration.
Moreover, non-standard forms of remuneration is compliant with regulations in force and the governance processes of FinecoBank S.p.A. and FinecoBank Group.
All remuneration classified as variable remuneration is subject to the rules applicable (e.g. cap on the ratio between variable and fix remuneration, technical features fixed by regulation where applicable for bonus pay-out) as well as to malus conditions and claw-back actions, as legally enforceable.
Financial Advisors are tied to the Company by an agency agreement, under which the Advisor is engaged on a permanent basis (without representation) to provide independent services, exclusively for the Bank, for the promotion and placement of financial instruments and Banking/financial services in Italy, as well as insurance and welfare products or any other products indicated in the contract. Advisors are also responsible for diligently monitoring the assistance to the existing and/or allocated customers in order to fulfil the Company's objectives. In accordance with existing regulations, contractual relationships with customers acquired by the Financial Advisor, and any other that is subsequently allocated, are conducted exclusively between the customer and the Bank.
FinecoBank's Network of Financial Advisors is composed by:
The Group Managers and the Area Managers are Financial Advisors with the accessory assignment to coordinate other Financial Advisors.
In particular, Area Managers are responsible for coordinating Advisors in their geographic area, for growing the business and for reaching the targets set by Commercial Department and are supported - for the purposes of coordination activity - by Group Managers.
The Commercial Department uses Company's internal structures, to provide support to the network. Their tasks are to control the local activities and provide support for commercial activity.
As mentioned in the preamble, the provisions of this Compensation Policy also apply to the members of the Financial Advisors' Network, in line with the Advisors' specific remuneration.
Financial Advisors are freelancers and their remuneration is entirely variable. The regulatory requirements31, in order to adapt the same employees' rules on compensation structure, based on a fixed and on a variable component, established for Financial Advisors a comparison between "non-recurring" pay component and variable remuneration and between "recurring" pay component and fix remuneration.
| TYPE OF REMUNERATION |
PURPOSES | FEATURES |
|---|---|---|
| 3.3.1. RECURRING REMUNERATION | ||
| This is the most stable and ordinary part of the total remuneration, equivalent to the fixed salary of employees |
Recurring remuneration is sufficient to reward the activity rendered even if the variable part of the remuneration package is not paid due to non-achievement of performance goals such as to reduce the risk of excessively risk-oriented behaviours, to discourage ini tiatives focused on short-term results and to allow a flexible bonus approach. |
• Sales commissions, in other words the payment to the Financial Advisor of a per centage of the sales charge, paid by the customer at the time of purchase of invest ment instruments. It is paid on an individual basis or as a supplement if the Advisor has been given coordination tasks. • Management and maintenance commis sion, in other words the Financial Advisor monthly remuneration for assistance pro vided to customers during the contract, commensurate with the average value of the investments and the type of product, paid on an individual basis or as a supple ment if the Advisor has coordination tasks. |
| 3.3.2. NON RECURRING REMUNERATION | ||
| It represents the part of the remuneration that has an incentive value (linked, for example, to the increase in volumes of net deposits, the overcoming of certain product benchmarks, the launch of new products, etc.) and is equivalent to the variable compensation of employees. In particular, are defined incentive Systems, linked to short-term performance and tied to reach certain goals. |
Aims at motivating, retaining and rewarding Financial Advisors and Managers of the Network, in full alignment with the regulatory requirements. |
• Pay-out is based on a "bonus pool" approach providing for a comprehensive performance measurement at individual and at Group level. • Reward is directly linked to performance, which is evaluated on the basis of actual results. • For the Financial Advisors belonging to Identified Staff, a dedicated incentive system ("PFA Incentive System") was defined, whose pay-out, as foreseen by regulations, is phased to coincide with an appropriate risk time horizon. The design features of the plan is aligned with shareholder interests and long-term, firm-wide profitability, providing for an appropriate allocation of a performance related incentive in cash and in shares, upfront and deferred. • For all the Financial Advisors not belonging to Identified Staff, specific incentive systems were defined, as, for example, "Incentive Plans for PFA-Area Managers-Group Managers", and specific retention initiatives such as the "Additional Future Program". This plan, in particular, is dedicated to selected PFA and network Managers not Identified Staff and provides the accrual of annual awards (subject to the achievement of specific performance conditions, and the compliance of individual behaviors) in specific insurance policies. The release of those awards is provided at the reach of the retirement age. • All the incentive systems provide for ex ante ("entry conditions") and ex-post (malus on any deferred components) adjustment mechanisms and claw-back clauses. • In order to award individual incentives individual behaviors (compliance with internal and external rules, Compliance rules and Group's integrity values and regulations and absence of disciplinary actions) are also considered (compliance assessment). In addition, to further strengthen compliance, a "Scoring" system is in place, consisting of an adjustment mechanism resulting from the assessment of compliance indicators and quality of operations, relating to specific areas such as mandatory training and internal rules, transparency, MIFID, AML and disciplinary actions. This system is applied during the incentive period and can lead to the revision of the amount of the accrued bonus. |
The existing provisions on Bank Transparency (for reference, "Disposizioni in materia di trasparenza delle operazioni e dei servizi bancari finanziari – Correttezza delle relazioni tra intermediari e clienti") issued by Bank of Italy on March 19, 2019, appoint two categories of staff (relevant subjects and credit intermediaries)32 which remuneration has to follow further principles, in addition to the ones provided in paragraph 2, Section I of the 2023 remuneration policy.
In particular, these subjects' remuneration has to be:
The total number of relevant subjects as of December 31, 2022 is equal to 2,918, of which 208 in a managerial position; these subjects, Financial Advisors allowed to off-site sales, are also entitled to present and offer loan contracts and to other activities pursuant the conclusion of loan contracts33.
Regarding the personnel who has to evaluate the credit rating, remuneration ensures the adequate risk management by the Bank. Personnel who are assigned to handle complaints, remuneration takes into consideration, among other things, the results of the complaints management and the costumer care quality.
For non-executives members of Board of Directors and for the members of the Board of Statutory Auditors, in line with the regulatory provisions, incentives systems are avoided. The remuneration of said subjects is fixed and is defined on the basis of the relevance of the role, of possible additional duties, and of the requested efforts for carrying out the assigned tasks and is not linked to economic results.
As provided by Bank of Italy provisions on remuneration policies and practices, the remuneration of the Chairman of the Board of Directors is not higher than the fixed remuneration of the Chief Executive Officer.
32 Relevant subjects: personnel who offers product to costumers as well as their underling;
Credit intermediaries: financial agents, loan mediator and subjects other than the Bank who, in the exercise of their professional/commercial activity, concludes loan contracts on the Bank's behalf as well as presents and offers loan contracts or carries out other related activities in exchange of a monetary compensation or other economic advantage in respect with applicable regulation.
33 According to art. 31(2) of legislative Decree n. 58, February 24, 1998, "L'attività di consulente finanziario abilitato all'offerta fuori sede è svolta esclusivamente nell'interesse di un solo soggetto. Il consulente finanziario abilitato all'offerta fuori sede promuove e colloca i servizi d'investimento e/o i servizi accessori presso clienti o potenziali clienti, riceve e trasmette le istruzioni o gli ordini dei clienti riguardanti servizi d'investimento o prodotti finanziari, promuove e colloca prodotti finanziari, presta consulenza in materia di investimenti ai clienti o potenziali clienti rispetto a detti prodotti o servizi finanziari. Il consulente finanziario abilitato all'offerta fuori sede può promuovere e collocare contratti relativi alla concessione di finanziamenti o alla prestazione di servizi di pagamento per conto del soggetto nell'interesse del quale esercita l'attività di offerta fuori sede." The Bank contracted an agreement for the promotion and sale of banking and insurance products aimed at distributing mortgage loans.
In line with FinecoBank's Articles of Association, the outgoing Board of Directors submits to the Shareholders' Meeting of April 27, 2023, its own list of candidates for the renewal of the Board, along with a proposal regarding the remuneration due to the Directors for their activities within the scope of the Board of Directors and Board Committees in FinecoBank S.p.A.
The following elements, inter alia, were taken into consideration in drawing up the above proposal:
With regard to the appointment of the Board of Statutory Auditors, the Ordinary Shareholders' Meeting is also called to approve the annual remuneration due to the members of the Board of Statutory Auditors for the entire period of its mandate.
The self-evaluation process to define the Identified Staff population both employees and Financial Advisors is conducted yearly.
The definition of the 2023 Identified Staff at FinecoBank Group and FinecoBank S.p.A. level, is in line with the provisions of the Circular no. 285 of 2013 of the Bank of Italy and the new EU Delegated Regulation 923/202134. Specifically, also to ensure a uniform approach standard at Group level, an evaluation process is performed in which the quantitative and qualitative criteria envisaged by the aforementioned regulatory provisions are analyzed according to the definitions and interpretative keys contained therein.
Such criteria are applied considering the role, the decision-making power, the effective responsibilities of the employees and of the Financial Advisors and, in addition, the total compensation level. Declining the qualitative criteria, all employees with Global band title equal to or greater than band 5 (Senior Vice President) are considered Identified Staff35.
For the purposes of applying the quantitative criteria based on the remuneration of staff members, the fixed and variable remuneration paid in the previous financial year were considered36.
The self-assessment is carried out involving the Compliance and Risk Management functions of FinecoBank, with the support of the independent external consultant of the Remuneration Committee and is reviewed by the Internal Audit function. The Board of Directors approves the results after a positive opinion of the Remuneration Committee and a preliminary step in Risk and Related Parties Committee.
The result of the assessment process brought to the identification of a total number of 2437 employees and 11 Financial Advisors38 for 2023.
Regarding employees, the following categories of employees have been defined for 2023 as Identified Staff: Chief Executive Officer and General Manager, Executives with strategic responsibilities, executive positions in Company Control Functions (Compliance, CRO, Internal Audit and AML) and other positions that are responsible for strategic decisions which may have a relevant impact on the Group's risk profile39.
Regarding Financial Advisors, a qualitative criteria is applied to select those belonging to Identified Staff, on the basis of their impact on business risk (represented by the risk that the Bank's profitability decreases consequently to the exit of Advisors from the Network and the related loss of customers and assets), the only type of risk that the Bank considers attributable to PFA, due to the absence of power of attorney they have to assume any other kind of risks.
In particular, the following categories of Financial Advisors have been identified for 2023 as Identified Staff:
34 Cf. also art. 92, paragraph 3 of the EU Directive 36/2013
35 According to the Global Job Model
36 Some elements of the remuneration were considered on an accrual basis.
37 The non-Executive Directors member of the Board (10 people), identified by the regulatory provisions applicable, are included as Identified Staff; however, the identification does not have any impact on remuneration.
38 Vs 23 Employees and 15 Financial Advisors identified in 2022
39 The list of Fineco Group Identified Staff includes also the CEO of Fineco Asset Management DAC
As in the past years, the 2023 Incentive System, as approved by the Board of Directors of FinecoBank on January 23, 2023, is based on a "bonus pool" approach that takes into consideration the national and international regulatory requirements and directly links bonuses with company results, ensuring the link between profitability, risk and reward.
In particular, the system provides for:
40 In compliance with sectorial regulations, the Chief Executive Officer of Fineco Asset Management DAC - Identified Staff of the Group - is the beneficiary of the FAM Incentive System, for which the use of UCITS-compliant instruments is envisaged.
The bonus pool process includes the following steps:
The Bonus pool process starts with the definition of the "funding rate" during budgeting phase. The funding rate for FinecoBank is a percentage of the Net Operating Profit (net of Provisions for Risk and Charges, corresponding to Profit Before Tax) considering: historical data analysis, expected profitability, business strategy and previous year pool. The bonus pool is submitted for approval to the Board of Directors of FinecoBank S.p.A.
During the year of performance, accruals are based on actual results.
The Bonus pool is adjusted based on the funding rate percentage set during the budgeting phase that determines by the end of the year the maximum theoretical bonus pool.
The Entry Conditions are based on performance indicators in terms of profitability, capital and liquidity. The entry conditions defined for 2023 – working also as malus conditions for the previous incentive systems deferrals – are reported in the following table.
| ENTRY CONDITIONS |
|---|
| Net Operating Profit adjusted ≥0 |
| Net Profit ≥0 |
| CET1 Ratio >9% (2023 RAF Capacity) |
| Liquidity Coverage Ratio >101% (2023 RAF Capacity) |
Net Stable Funding Ratio >101% (2023 RAF Capacity)
• If all Entry Conditions are met (option "A"), the bonus pool can be confirmed or adjusted with the opportunity to award extra performance
• In case all Entry Conditions are met (option A), the "multiplier" effect deriving from the overall evaluation of the risk factors included in the CRO Dashboard can be applied to the bonus pool, pursuant to the defined methodology defined by the CRO function and approved by the Board of Directors itself. The dashboard evaluation is carried out by the FinecoBank CRO and verified by the Remuneration Committee and the Board. The CRO dashboard (defined in coherence with Risk Appetite Framework) includes KPIs taken from the Risk Appetite Framework, measured with reference to the respective relevant thresholds (Risk Appetite, Risk Tolerance and Risk Capacity). Here below a sample of the content of the dashboard:
| SAMPLE | ||||
|---|---|---|---|---|
| 2023 | ||||
| DIMENSIONE | KPIs | Risk Appetite | Risk Tolerance | Risk Capacity |
| CET1 Ratio (%) | --% | --% | --% | |
| Capital | MREL-LRE (%) phase in 1Q23 3Q23 | --% | --% | --% |
| MREL-LRE (%) phase in 4Q23 | --% | --% | --% | |
| LCR (%) | --% | --% | ||
| Liquidity | NSFR (%) | --% | --% | |
| Risk & Return | ROAC (%) | --% | --% | --% |
| EL stock (%) | --% | --% | --% | |
| Credit | Coverage on Impaired (%) | --% | --% | --% |
| Interest Rate Risk on Banking Book | EV Sensitivity (%) | --% | --% | |
| Operational Risk | Operational Risk Losses / Revenues | --% | --% | --% |
The bonus pool corrections ranges deriving from the CRO Dashboard assessment are the same as the 2022 Incentive System, as follows.
| −− | − | = | + | ++ |
|---|---|---|---|---|
| 50% | 75% | 100% | 110% | 120% |
The opportunity to award an extra performance in the bonus pool (positive "+" or "++" rating) can only be granted in case of positive EVA at the end of the financial year. In line with the 2022 System, the Remuneration Committee and the Board of Directors may apply a further correction up to +20%, while no limit is set in case the bonus pool is reduced with respect to the theoretical value.
In any case, as requested by regulations as per Bank of Italy provisions, the evaluation of the sustainable performance parameters and the alignment between risk and remuneration are assessed by Remuneration Committee and by Risk and Related Party Committee and defined under the governance and accountability of the Board of Directors.
The Board of Directors may not take into account, when deciding bonus, balance sheet extraordinary items that do not affect operational performance, regulatory capital and liquidity (e.g. goodwill impairment, extraordinary contributions to deposit guarantee schemes, etc.).
Moreover, following potential changes in current regulations and/or in relation to potential extraordinary and/ or unpredictable contingencies that can impact the Group, the Bank or the market in which they operate, the Board of Directors, having heard the opinion of the Remuneration Committee and upon competent functions proposition, maintains the right to amend the system and relevant rules.
An annual performance assessment framework supports the 2023 Incentive System. The assessment assures a connection between performance and variable remuneration, clarity of performance objectives and coherence with business strategy. Our performance management process ensures that all Identified Staff receive their own
individual goals at the beginning of the year and includes a rigorous review of their goals achievements. Shortterm variable remuneration, for instance, is determined based on specific, clear and measurable performance indicators, through an assessment based on objective drivers.
The individual goals are assigned through the Scorecard, which adequately balances economic-financial and non-economic factors (that means, quantitative/strategic and qualitative/sustainable), also considering performance goals linked to Risks and Compliance, to the respect of values and to ESG parameters. This approach ensures medium-term sustainability for the Group and all its stakeholders.
In particular, the 2023 Scorecard for Identified Staff provides for a minimum of 5 and maximum 8 goals that reflect the Bank and FinecoBank Group's strategy. The Scorecard includes 4-6 quantitative/strategic goals, equally weighted, with an overall incidence of 70% on the Scorecard, and up to 2 qualitative/sustainable goals with a 30% incidence on the Scorecard (see below CEO and General Manager 2023 scorecard).
For Company Control Functions, Human Resources department and the Manager in charge of financial statements, all goals linked to economic results must be excluded, in order to minimize potential conflicts of interest and be independent from the results of the respective areas.
With the aim to align all goals coherently, the individual scorecards for some Executives with strategic responsibilities replicate exactly the scorecard of the CEO and GM, as applicable to each role. The goal setting for the remaining Identified Staff, is carried out through a cascading process of their superiors' goals, considering both the strategic factors and the business objectives, as well as the specificities of each role.
Individual bonus will be allocated to beneficiaries considering the overall evaluation (from Below Expectations to Greatly Exceed Expectations), the Bonus Pool allocated for the financial year, the internal benchmarking analysis on similar roles and the maximum ratio between variable and fix compensation as approved by Shareholder's Meeting.
In particular, the appraisal system is based on a 5-rating scale with a descriptive outcome (from "Below Expectations" to "Greatly Exceeds Expectations").
To allocate the individual bonus, individuals' behaviors (compliance with internal and external rules and regulations, absence of disciplinary actions and completion of mandatory training) are also considered.
The 2023 scorecard defined and approved by FinecoBank S.p.A. Board of Directors as the core drivers of performance for the Chief Executive Officer and General Manager includes goals related to the Group profitability, with particular focus on risk, consistency with Risk Appetite Framework and sustainability.
| WEIGHT | CATEGORY | GOAL NAME | REFERENCE TARGET |
|---|---|---|---|
| QUANTITATIVE/ STRATEGIC 70% |
Value Creation Risk-Based Cost Efficiency |
ROAC AUM net sales EL stock (%) Cost Income |
vs. budget vs. budget vs. target vs. budget vs. budget Operating costs as reported in reclassified P&I, i.e.: |
| OPEX | Staff expenses + Other Administrative Expenses (direct + indirect) - Expenses Recovery + Depreciations |
||
| Improve/maintain the scores of the main ESG ratings: S&P CSA, CDP Climate Change, Sustainalytics, MSCI, Moody's ESG Solutions, Standard Ethics. |
|||
| QUALITATIVE/ SUSTAINABLE |
Responsible finance: y/y % of new ISIN funds with ESG rating* | ||
| Stakeholder Value | Delta on Gender Pay Gap and Gender Balance (Y/Y) | ||
| 30% | Sustainability | Improve Fineco's environmental performance: maintenance of EMAS Registration, also through the achievement of the Environ mental Program goals with particular reference to the development of a new green lending product. |
|
| Tone from the | Promotion of initiatives aimed at fostering staff integrity, customer protection, and trustworthiness by enhancing risk & control culture; |
||
| top on conduct and compliance culture |
The overall status of audit, compliance and External Authorities findings considering the type, severity and the timely completion of the related remedial actions. |
* Excluding UK representing for Fineco a new opening market
In line with the principle of alignment of the Remuneration Policy with the Group's ESG strategy, the 2023 scorecard of the Chief Executive Officer and General Manager, linked to the short-term incentive system, includes two macro-objectives that are qualitative and linked to sustainability, understood as the ability to generate and maintain value for all stakeholders in the medium-long term. These ESG objectives are "Stakeholder Value" and "Tone from the top on conduct and compliance culture", each with a 15% weight on the overall scorecard of the CEO/GM.
Within the "Stakeholder Value", coherently with the Group's 2020-2023 ESG Plan, the following objectives were set:
maintenance or improvement of the score assigned to Fineco by the main ESG rating agencies: S&P CSA, CDP Climate Change, Sustainalytics, MSCI, Moody's ESG Solutions, Standard Ethics, thus guaranteeing impartiality and objectivity in assessing Fineco's commitment on environmental, social and governance aspects and how they are managed.
ESG rating for the new funds included in the Italian platform, as part of offering responsible products and investments.
the outcome of the year-on-year monitoring of the gender pay gap, as defined in paragraph 2.3.1, and of the gender balance linked to gender representation within the company staff, in line with gender neutral remuneration policies and practices and with the attention of the Group to create an inclusive and diverse work environment.
the improvement of Fineco's environmental performance in the context of maintaining the EMAS Registration, obtained in 2022, which certified the excellence of FinecoBank's Environmental Management System, implemented throughout the Italian perimeter according to the requirements of EMAS Regulation no. 1221/2009/CE. Furthermore, the objectives indicated in the Environmental Improvement Program are also considered, which concern various areas, including, by way of example, energy efficiency, the reduction of emissions related to the mobility of personnel, the consumption of resources, etc. In line with the Group's growing attention to the integration of climate and environmental risks into remuneration systems in order to promote behavior consistent with the strategy adopted in this area, the objective in question has been strengthened by envisaging the development of a new "green" lending product.
Furthermore, to strengthen the risk and compliance culture, which are fundamental elements of Fineco's governance, the macro-objective "Tone from the top" is set based on integrity of conduct and the spreading of compliance culture within the organization.
As approved by the Board of Directors on January 23, 2023, for the purpose of the applicable payment structure, the Identified Staff will be divided into 3 groups, according to the regulations.
Payment of the incentives will be made through immediate and deferred tranches - in cash or in FinecoBank ordinary shares - over a period of up to 6 years:
the remaining amount of the total incentive will be paid in several installments in cash and/or Fineco free ordinary shares in the period:
2025-2029 for the CEO and GM, and for the other roles foreseen by the legislation42 with variable remuneration amount over Euro 435,00043;
2025-2029 for the roles foreseen by the legislation44 with variable remuneration amount below or equal to Euro 435,000;
In particular, payment systems are based on two time horizons (5 and 6 total years) differentiated on the basis of the target population and of the total amount of variable remuneration awarded for the performance year, according to the schemes described below:
• For the CEO and GM and other roles provided by law with a "significant amount" of total variable remuneration in the performance year (>435,000 €) a 5-year deferral scheme applies with an overall payout structure of 6 years, with 60% of bonus deferred, consistent with the 2022 payout scheme.
| 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | Total | ||
|---|---|---|---|---|---|---|---|---|
| Cash | 20% | 12% | 12% | 44% | ||||
| ALLOCATION | Shares | 20% | 12% | 12% | 12% | 56% | ||
| Cash | 20% | 12% | 12% | 44% | ||||
| PAYOUT | Shares | 20% | 12% | 12% | 12% | 56% |
Upfront Deferred
41 Considering also the seriousness of possible internal/external inspections (i.e. Internal Audit, Bank of Italy, Consob and/or similar authorities), and in general, according to the paragraph "Focus on compliance breach, individual Malus and Claw- back"
42 Cf. Circular no. 285/2013 Bank of Italy. For instance the first reporting line of Management Body (CEO) and responsible of main business areas.
43 Equal to 25% of the total remuneration of the Italian High Earners according to the EBA report (Benchmarking and High Eaners Report). The threshold includes both the short-term variable remuneration and the annual tranche of the long-term variable remuneration, and it is equal to less than 10x the overall average remuneration of the Bank's employees. As required by the regulatory provisions (Circular 285/2013), the threshold has been defined for the three-year period 2022-2024.
44 Cf. Circular no. 285/2013 Bank of Italy. For instance the first reporting line of Management Body (CEO) and responsible of main business areas.
| 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | Total | ||
|---|---|---|---|---|---|---|---|---|
| Cash | 25% | 10% | 10% | 45% | ||||
| ALLOCATION | Shares | 25% | 10% | 10% | 10% | 55% | ||
| Cash | 25% | 10% | 10% | 45% | ||||
| PAYOUT | Shares | 25% | 10% | 10% | 10% | 55% | ||
Upfront Deferred
• For the other identified staff with no significant amount of total variable remuneration a 4-year deferral scheme applies with an overall payout structure of 5 years, with 40% of bonus deferred.
| 2024 | 2025 | 2026 | 2027 | 2028 | Totale | ||
|---|---|---|---|---|---|---|---|
| Cash | 30% | 10% | 10% | 50% | |||
| ALLOCATION | Shares | 30% | 10% | 10% | 50% | ||
| Cash | 30% | 10% | 10% | 50% | |||
| PAYOUT | Shares | 30% | 10% | 10% | 50% | ||
Every tranche will be subject to the Zero Factor related to the year of competence and to the verification of the compliance of individual behaviors45:
At the local level, the legal entities can calibrate the duration of the deferral schemes and/or use different financial instruments in line with market practices and the local regulatory framework.
Excluding death and "good leaver" status, the employee participation to the Incentive System will automatically lapse (as well as any right depending on the Incentive System) upon any of these circumstances happening:
45 considering also the gravity of any internal/external findings by the competent Functions or Authorities (e.g. Internal Audit, Bank of Italy, Consob and/ or analogous local authorities).
46 37th update to the Circ. no. 285
i. The employee communicates the termination or terminates his/her contract for any reasons; or
ii. The employee is informed of the termination of his/her contract.
The "good leaver" status occurs only when the employee terminates his/her contract (or his/her contract is terminated) with the Company or any other company of FinecoBank Group, during the validity of the Incentive System, because of any of the reasons mentioned in the System's Rule (e.g. physical constraints, retirement, sale of the business…).
It is understood that the beneficiary has the right to receive any of the deferred payment already awarded but subject to a holding period.
Given the differences in the forms of remuneration and in the modalities of its generation, also for the PFA population Identified Staff in FinecoBank a specific Incentive System is provided. Mirroring what is designed for the Employees, the system is based on a bonus pool approach, it takes into account the national and international regulatory requirements, and it directly links bonuses with Group results, ensuring the link between profitability, risk and reward.
In particular, the 2023 Incentive System for PFA Identified Staff – as approved by the Board on January 17, 2023 - provides for:
47 Unlike what happens in the Incentive System for Employees, the FinecoBank shares used for the purposes of payments to the PFA, are not generated by a free capital increase but are purchased directly on the market, pursuant to article 2357 of Italian Civil Code.
In coherence with what previously described for the Employees, also for the PFA the process of bonus pool definition includes the following steps:
The Bonus pool process starts with the definition of the "funding rate" during budgeting phase. The funding rate is a percentage of the Net Operating Profit (net of Provisions for Risk and Charges, corresponding to Profit Before Tax) considering: historical data analysis, expected profitability, business strategy and previous year pool. The bonus pool is submitted for approval to the Board of Directors of FinecoBank S.p.A.
During the performance year, accruals are based on actual results.
The bonus pool is adjusted taking into consideration the percentage of funding rate fixed during budgeting phase that set by the end of the year the maximum theoretical bonus pool.
The Entry Conditions are based on performance indicators in terms of capital, liquidity and profitability. The entry conditions48 defined for 2023 – working also as malus conditions for the deferrals of previous years' incentive systems – are reported in the following table.
48 For the indicators' definitions, see paragraph. 4.2
| ENTRY CONDITIONS |
|---|
| Net Operating Profit adjusted ≥0 |
| Net Profit ≥0 |
| CET1 Ratio >9% (2023 RAF Capacity) |
| Liquidity Coverage Ratio >101% (2023 RAF Capacity) |
| Net Stable Funding Ratio >101% (2023 RAF Capacity) |
The on/off mechanism of the entry conditions and the related effects on the Bonus Pool work as shown below:
If all Entry Conditions are met, can be applied the "multiplier" effect to bonus pool, pursuant to the defined methodology.
The CRO dashboard (defined in coherence with Risk Appetite Framework) includes KPIs taken from the Risk Appetite Framework, measured with reference to the respective relevant thresholds (Risk Appetite, Risk Tolerance and Risk Capacity).
The "multiplier" effect deriving from the evaluation of overall CRO dashboard outcome made by the Fineco-Bank S.p.A. CRO – and verified by the Remuneration Committee and the Board of Directors – applies to the bonus pool in case all entry conditions are met.
The dashboard evaluation is carried out pursuant to a methodology defined by the CRO, as for the Employees System.
The bonus pool corrections ranges deriving from the CRO Dashboard assessment, in line with the 2022 Incentive System, are as follows:
The opportunity to award an extra performance in the bonus pool (positive "+" or "++" rating) can only be granted in case of positive EVA at the end of the financial year. As provided in the 2023 System, the Remuneration Committee and the Board of Directors may apply a further correction up to +20%, while no limit is set in case the bonus pool is lowered with respect to the theoretical value.
In any case, as requested by regulations as per Bank of Italy provisions, the evaluation of the sustainable performance parameters and the alignment between risk and remuneration will be assessed by Remuneration Committee and Risk and Related Party Committee and defined under the governance and accountability of the Board of Directors.
The Board of Directors does not take into account, when deciding bonus, balance sheet extraordinary items that
do not affect operational performance, regulatory capital and liquidity (e.g. goodwill impairment, extraordinary contributions to deposit guarantee schemes, etc.).
Moreover, following potential changes in current regulations and/or in relation to potential extraordinary and/ or unpredictable contingencies that can impact the Group (e.g. delisting, change of control), the Bank or the market in which they operate, the Board of Directors, having heard the opinion of the Remuneration Committee and upon competent functions proposition, maintains the right to amend the system and relevant rules.
Taking into account the specificities of the PFA49 business, and in continuity with the previous years' Incentive Plans in terms of business objectives, for the purposes of the 2023 Incentive System for PFA the performance assessment of Financial Advisors included in the Identified Staff will be based on the following indicators:
For the Financial Advisors belonging to the Identified Staff, the payment mechanism provides for a 4-year deferral period. The payment of the potential bonus 2023 will therefore take place over a maximum period of 5 years. In particular:
In particular, the payment systems are differentiated on the basis of the total amount of variable remuneration57 awarded for the performance year, according to the schemes described below:
49 Always taking into account the individual compliance condition, as described above
50 For PFAs and Group Managers individual net sales
51 For Group and Area Manager
52 Products that - in addition to present high-quality characteristics in terms of risk / return, costs and diversification - allow the best control of market, credit and liquidity risks, through a timely risk management activity carried out by the competent structures of the Fineco Group, based on the availability of complete and updated data on the composition of the underlying elements. In this regard, in line with the Compliance Function's evaluation and coherently with the Regulator's indications, specific activities are in place to strengthen the process aimed at defining the perimeter of products that can be defined as Top Quality.
53 For the Financial Advisors in managerial positions with more than 5 PFA coordinated (Group and Area Manager)
54 For PFAs and Group Managers individual net sales
55 PFA, Area Manager, Group Manager
56 Considering also the seriousness of possible internal/external inspections (i.e. Internal Audit, Bank of Italy, Consob and/or similar local authorities).
57 The definition of the overall variable remuneration threshold (>€ 435,000) follows the same logic described in the Incentive System for Employees Identified Staff
• For roles with a significant amount of total variable remuneration, a 4-year deferral scheme applies with an overall payout structure of 5 years, with 60% of bonus deferred.
| 2024 | 2025 | 2026 | 2027 | 2028 | Total | ||
|---|---|---|---|---|---|---|---|
| Cash | 20% | 5% | 5% | 10% | 10% | 50% | |
| ALLOCATION | Shares | 20% | 15% | 15% | 50% | ||
| Cash | 20% | 5% | 5% | 10% | 10% | 50% | |
| PAYOUT | Shares | 20% | 15% | 15% | 50% | ||
Upfront Deferred
• For roles with no significant amount of total variable remuneration, a 4-year deferral scheme applies with an overall payout structure of 5 years, with 40% of bonus deferred.
| 2024 | 2025 | 2026 | 2027 | 2028 | Total | ||
|---|---|---|---|---|---|---|---|
| Cash | 30% | 10% | 10% | 50% | |||
| ALLOCATION | Shares | 30% | 10% | 10% | 50% | ||
| Cash | 30% | 10% | 10% | 50% | |||
| PAYOUT | Shares | 30% | 10% | 10% | 50% | ||
The beneficiaries cannot activate programs or agreements that specifically protect the value of unavailable financial instruments assigned within the incentive plans. Any form of coverage will be considered a violation of compliance rules and imply the consequences set out in the regulations, rules and procedures.
58 37th update to the Circ. no. 285
With the aim of rewarding, retaining and motivating selected Bank Employees in the long term, in line with FinecoBank Group 2020-2023 Strategic Plan, a share-based long-term incentive plan has been defined. The Plan sets performance targets for the period 2021-2023 in terms of value creation, industrial sustainability, risk and stakeholder value, also in order to align the long-term interests of the Bank's Management with the long-term value creation for shareholders.
The beneficiaries of the Plan are selected Group Employees among key resources (100 resources estimated), including Executives with strategic responsibility.
The Heads of the Company Control Functions (CRO, Head of Compliance, Head of Internal Audit and Head of AML) are excluded from the Beneficiaries of the Plan.
The structure of the Plan, described below in detail, provides for:
In order to comply with current regulations, Fineco defined:
According to the results of the benchmarking analysis and in compliance with regulations and market practice, it is provided the application of the same parameters used for the short-term incentive system, therefore specific to measure capital strength, liquidity and profitability of the Group60.
Shares will be awarded only in case the minimum conditions of capital, liquidity and profitability (entry condtions) are met over the whole performance period. The mechanism works as follows:
59 Shares will be awarded only if the beneficiaries will still be employed at each date of the assignment of the shares.
60 For the indicators' definitions, see paragraph 4.2
not met, the maximum bonus will be reduced pro-quota (equal to 1/3 per year).
Moreover, each single deferral will be subject to malus conditions concerning the considered year (2024-2027):
Any right of the employee to the bonus (or its instalments) under the Plan depends on the existence of an employment relationship between him/her and any company of Fineco Group at each date of the assignment of the shares61 provided by the Plan's Rule, as well as the absence of a notice period.
The bonus payout is subject to claw-back mechanisms.
The performance targets, as defined above, have a specific weight in terms of impact on the final bonus and their assessment is based on progressive thresholds, corresponding to increasing bonus percentages from 0% to 100% in a linear progression62, as shown below.
61 To be understood as the final vesting of the right to the incentive and not the actual instalment of the shares at the end of the holding period.
62 For example, with average ROAC equal to 35.5%, the corresponding bonus instalment amount would be equal to 50% of the value established for reaching the ROAC 38% threshold.
| GOALS | KPIs | WEIGHT | TARGET | ASSESSMENT CRITERIA | ||
|---|---|---|---|---|---|---|
| Threshold | Payout | |||||
| ≥ 38% | 100% | |||||
| ROAC | 35% | Average 2021-2023 |
33% - 38% | 0% - 100% | ||
| ≤ 33% | 0% | |||||
| VALUE CREATION 50% | ≥ 13 bn | 100% | ||||
| Net Sales Asset Under Management |
15% | Sum 2021-2023 |
11 bn - 13 bn | 0% - 100% | ||
| ≤ 11 bn | 0% | |||||
| ≤ 37,5% | 100% | |||||
| INDUSTRIAL SUSTAINABILITY 20% | Cost Income Ratio | 20% | Average 2021-2023 |
40% - 37,5% | 0% - 100% | |
| ≥ 40% | 0% | |||||
| 15% | Average 2021-2023 |
≤ 18 bps | 100% | |||
| RISK 15% | Cost of Risk | 22 bps - 18 bps | 0% - 100% | |||
| ≥ 22 bps | 0% | |||||
| ≥ 90 pt | 100% | |||||
| Customer satisfaction | 5% | Average 2021-2023 |
85 pt - 90 pt | 0% - 100% | ||
| ≤ 85 pt | 0% | |||||
| ≥ 76% | 100% | |||||
| STAKEHOLDER VALUE 15% equally weighted |
People engagement | 5% | Average 2021-2023 |
71% - 76% | 0% - 100% | |
| ≤ 71% | 0% | |||||
| 100% | 100% | |||||
| ESG rating for all new funds* | 5% | EOY 2023 | 80% - 100% | 0% - 100% | ||
| ≤ 80% | 0% |
*Excluding UK, wich represents a new market for Fineco
In light of the benchmarking analysis' results carried out with the support of the External Advisor, with regards to the materiality matrix and Group's sustainability goals as intended in the strategic plan, specific ESG parameters have been identified within the macro-goal Stakeholder Value:
Customer Satisfaction: as to monitor the strength of the relationship with our customers, defined by performance and preference. In order to measure this performance indicator, it will be used the average of the assessments carried out twice a year during the performance years (2021-2023).
People Engagement: it is based on the monitoring of the employees involvement with respect to business strategy and positioning, and it will be measured through the People Survey results, which reflects the engagement level and the alignment with respect to the company strategy. In order to measure this performance indicator, the survey will be carried out twice during the performance years (2021-2023) with the purpose to elaborate a data mean that could reflect the employee experience over a long-time period.
ESG rating for all new funds: it focuses on the introduction of an ESG rating for all new funds, measuring environmental, social and governance risks from a financial point of view, compared with a peers' benchmark. In order to measure this performance indicator, at the end of the performance years (2021-2023) it will be taken into account the percentage of new funds with ESG rating on the total number of new funds (ISIN).
For the purposes of the appropriate Plan correction for the Bank's Risk, the results of the annual CRO Dashboard assessments will be taken into consideration for each year of the Plan's performance. The presence of any negative assessments will result in a proportional reduction of individual bonuses, as shown below:
Maximum bonuses have been defined on the basis of the categories of beneficiaries of the Plan. The amounts were established in line with the applicable regulatory provisions and the FinecoBank Group Compensation Policy.
Individual bonuses - in particular - confirm compliance with the maximum limits for the variable remuneration envisaged for the Plan Beneficiaries, also taking into account the short-term variable remuneration attributable in each year of performance.
Within the aforementioned limits, it is planned, in detail:
As mentioned, the bonuses will be paid entirely in FinecoBank free ordinary shares63, according to the payment schemes shown below.
IS=Identified Staff at Group Level
For the Beneficiaries of the Plan included in Identified Staff a one-year holding period on the shares is provided, both for the upfront shares, assigned at the end of the performance period, and the deferred shares.
For the other Beneficiaries the assignments of the shares and their availability coincide.
The evaluation of the results and the conditions for the individual assignment of the shares will be carried out by the Board of Directors, upon the proposal of the Remuneration Committee, according to the established governance.
It is provided the possibility for the Remuneration Committee and the Board of Directors to increase bonuses up to 20% (within the maximum bonuses provided by the Plan), as well as reduce them without limits, considering indicators as the Total Shareholders Return (absolute and relative) or other indicators, such as market context and trends on remuneration, or events with reputational impacts. The correction "in positive" does not apply in case Entry Conditions are not met, as described in this paragraph.
When deciding the bonus, the Board of Directors does not take into account balance sheet extraordinary items, which do not affect operational performance, regulatory capital and liquidity (e.g. goodwill impairment, extraordinary contributions to deposit guarantee schemes, etc.).
The Board of Directors of May 5, 2021 approved the promise to assign a maximum number of shares equal to 741,129 FinecoBank ordinary shares that can be awarded to the beneficiaries of the Plan in 2024, following the verification of the entry conditions, performance conditions and the other conditions envisaged by the Plan.
The number of shares was determined based on the arithmetic average of the official closing price of Fineco-Bank shares recorded in the month preceding the resolution of the Board of Directors of FinecoBank S.p.A., which implemented the shareholders' resolution relating to the Plan, equal to € 14.178.
The Plan provides for an impact on FinecoBank S.p.A. share capital of approximately 0.24%, assuming that all free shares for employees will be distributed. The current overall dilution for all other outstanding equity-based plans for both Employees and Financial Advisors equals to 0.6% ca.
The beneficiaries cannot activate programs or agreements that specifically protect the value of unavailable financial instruments assigned within the incentive plans. Any form of coverage will be considered a violation of
compliance rules and imply the consequences set out in the regulations, rules and procedures. Excluding death and "good leaver" status, the employee participation to the Plan will automatically lapse (as well as any right depending on the Plan) upon any of these circumstances happening:
i. The employee communicates the termination or terminates his/her contract for any reasons; or
ii. The employee is informed of the termination of his/her contract.
The "good leaver" status occurs only when the employee terminates his/her contract (or his/her contract is terminated) with the Company or any other company of FinecoBank Group, during the validity of the Plan, because of any of the reasons mentioned in the Plan's Rule (e.g. physical constraints, retirement, sale of the business…).
It is understood that the beneficiary has right to receive any of the deferred payment already awarded but subject to a holding period.
Moreover, following potential changes in current regulations and/or in relation to potential extraordinary and/or unpredictable contingencies that can affect FinecoBank Group, the Bank or the market in which it operates, the Board of Directors, having heard the opinion of the Remuneration Committee and upon competent Company Functions' proposal, maintains the right to amend the Plan and relevant rules.
2022 remuneration report
| 1. | INTRODUCTION | 71 |
|---|---|---|
| 1.1 | 2022 FY main results | 71 |
| 2. | GOVERNANCE & COMPLIANCE | 73 |
| 2.1 | Remuneration committee | 73 |
| 2.2 | The role of the company control functions: Compliance, CRO and Internal Audit | 76 |
| 3. | IMPLEMENTATION OF 2022 INCENTIVE SYSTEM AND PREVIOUS YEARS' PAYMENTS | 78 |
| 3.1. | 2022 incentive system for employees belonging to identified staff | 78 |
| 3.1.1 | Further details on compensation of Executives with strategic responsibility | 81 |
| 3.1.2 | Previous years' Incentive Systems payout for employees belonging to Identified Staff | 82 |
| 3.2 | 2022 incentive system for financial advisors belonging to identified staff | 83 |
| 3.2.1 | Previous years' Incentive Systems payout for Financial Advisors belonging to Identifies Staff | 83 |
| 4. | COMPENSATION FOR MEMBERS OF THE ADMINISTRATIVE AND AUDITING BODIES | 85 |
| 5. | INDEMNITIES TO DIRECTORS IN THE EVENT OF RESIGNATIONS, DISMISSAL OR | |
| TERMINATION OF EMLOYMENT FOLLOWING A PUBLIC PURCHASE OFFER (AS PER | ||
| SECTION 123/BIS, PARAGRAPH 1, LETTER I), OF TUF) | 86 | |
| 6. | COMPENSATION DATA | 86 |
| 6.1 | Company results, compensation and employees' remuneration variation | 86 |
| 6.2 | Information tables pursuant to art. 84-quater of the regulantion no. 11971 issued by | |
| Commissione Nazionale per le Società e la Borsa (CONSOB) | 88 | |
| 6.3 | Benefit data | 90 |
The 2022 Remuneration report discloses all relevant FinecoBank compensation-related information with the aim to increase Stakeholders' awareness of our compensation practices, demonstrating their coherence with business strategy and performance and sound risk management.
The report provides complete and comprehensive ex-post information on 2022 results and includes details referring to Members of Administrative and Auditing bodies, General Manager and Executives with strategic responsibility64.
Remuneration solutions implemented in 2022 provided for:
Over the years we constantly kept abreast of ongoing changes in national and international regulations (see, for instance, EBA Guidelines on remuneration policies and practices).
The information are provided pursuant to art. 123-bis of TUF, as modified by Legislative Decree no. 49/2019 which applies the European Directive 828/2017 (Shareholder Rights Directive II), and pursuant to Consob Regulation no. 11971/1999.
In particular, the data in compliance with art. 114-bis TUF and with the Regulation no. 11971/1999, with regard to information that have to be disclosed to the market concerning the award of incentive plans based on financial instruments, are included in this document and in the Annex II (Annex II: Compensation systems based on financial instruments for FinecoBank staff).
According to the mentioned regulations and in line with the previous year, Section II will receive an advisory and non-binding vote by the Shareholders' General Meeting 2023 on a specific resolution, distinct and separate from the one approving Section I.
As required by the Issuers' Regulation in Annex 3A Scheme no. 7-bis "Report on the remuneration policy and remuneration paid", it should be noted the absence of any derogation to the 2022 Remuneration Policy.
The results achieved by FinecoBank Group as of December 31, 2022 (2022 financial year) confirm the ability to adjust to the new scenario, with an approach focused on transparency and great respect of the customer. In particular:
65 Figures net of non-recurring items recorded in 2022
64 In this regard, it should be noted that the aforementioned information is also provided for the purposes of the report on corporate governance and ownership structures drawn up pursuant to art. 123-bis of the TUF.
66 Figures net of non-recurring items recorded in 2022
For the purpose of alignment with regulatory requirements, specific indicators are set to measure profitability, financial solidity and liquidity on an annual basis, which act as access/entry conditions.
According to the actual results, verified and approved by the Board of Directors of FinecoBank S.p.A. on February 7, 2023, the relevant entry conditions have been achieved, confirming the bonus pool67 for Employees and Personal Financial Advisors.
| ENTRY CONDITIONS | RESULTS | |
|---|---|---|
| Net Operating Profit adjusted ≥0 | 663,7 k€ | A Open 100% |
| Net Profit ≥0 | 428,505 k€ | |
| CET 1 ratio > 9.6% (2022 RAF Capacity) | 20.82% | B |
| Liquidity Coverage Ratio > 101% (2022 RAF Capacity) | 729.25% | ZERO FACTOR |
| Net Stable Funding Ratio > 101% (2022 RAF Capacity) | 352.76% |
The bonus pool dimension is related to the actual profitability measure multiplied for the percentage of the bonus pool funding rate defined in the budgeting phase.
This calculation determines the so called "theoretical bonus pool" that, during the year of performance, has been adjusted based on the effective performance trend.
Once the entry conditions have been verified, the effective bonus pool for FinecoBank's employees and personal financial advisors was approved by the Board of Directors, also in light of the overall positive ("++") assessment of the performance of the so-called "CRO dashboard"68, carried out by FinecoBank CRO. This method provides a quarterly monitoring of the progress of the indicators included in the Dashboard and an annual assessment.
67 Calculated applying the funding rate percentage to the profitability results
68 The CRO Dashboard 2022 is a set of indicators selected among the Risk Appetite Framework KPIs; the threshold values have been approved by the Board of Directors at the beginning of the year (January 2022).
The Remuneration Committee holds a strategic role in supporting the Board of Directors' oversight of Fineco-Bank Group Remuneration policy and plans design.
According to the internal provisions approved by the Board of Directors, ruling the functioning and competencies of corporate bodies and related information flows (hereinafter the "Corporate Governance Rules"), this Committee is composed by 3 non-executive members. In compliance with regulatory provisions, at least one member of the Committee has adequate knowledge and experience in accounting and finance topics, as well as in remuneration policies.
Mr. Gianmarco Montanari, Ms. Giancarla Branda and Ms. Paola Giannotti De Ponti are the members of Fineco-Bank Remuneration Committee.
The Board of Directors verified the Administrators' independence requirements pursuant to art. 148 TUF and art. 2 of the Corporate Governance Code of Borsa Italiana. In this regard, all members of the Remuneration Committee resulted Independent Directors pursuant to art. 148 TUF and art. 2 of the Corporate Governance Code of Borsa Italiana.
Mr. Gianmarco Montanari, in his capacity as Chairman, coordinated the Committee meetings held in 2022. In performing its duties and if important and suitable, the Remuneration Committee, also with the support of an external consultant:
vi. cooperates with the other Committees, in particular with the Risk and Related Parties Committee, which, with reference to the remuneration and incentive policies, examines whether the incentives provided by the remuneration system take into account the risks, share capital and liquidity, provided that this does not affect the tasks assigned to the Remuneration Committee, with which adequate coordination must be ensured;
vii. ensures the involvement of the relevant business functions in the process of drawing up and monitoring remuneration and incentive policies and practices;
In 2022 the Remuneration Committee met 13 times. The meetings had an average duration of one hour and half. From the beginning of 2023 and until the approval of the present Report, 3 meetings of the Committee have been held. The Secretary designated by the Committee takes minutes of each meeting and places them on record. The Chairman of the Committee provided time by time the information on the Committee meetings to the subsequent Board meeting.
The Committee has started a collaboration with an external advisor by means of the budget assigned, which supports the decisions making process of the Committee itself and whose independence has been previously verified. The external advisor participates to the Committee's meeting when required.
The Committee may, when it deems appropriate, invite other individuals from within the Company to attend the meetings, in relation to the corporate functions and organizations concerned by the issues at hand, including members of other committees within the Board of Directors. The Committee shall meet when convened by its Chairman, whenever he/she deems necessary, or upon the request of one of its members. In any case, the Committee has always been able to access the information and the Company Functions necessary to perform its activities.
In 2022, the Head of Human Resources has been always invited to Committee's meetings. The Chairman has also invited the Head of Legal & Corporate Affairs for the matters within the competence, and the Head of Network Controls, Monitoring and Service Department for topics related to PFA network (see for instance the Incentive Systems and related rules for the PFA population). In addition to the aforementioned Functions, the Chairman invited among others – to specific Committee's meetings and for topics in the competence perimeters – the Head of Regulatory Affairs.
In addition, the Human Resources Manager of Fineco Asset Management DAC also took part in the meetings of the Committee relating to the remuneration systems of the legal entity.
The Chairman has also invited the Internal Audit function to the meeting related to the annual audit performed on FinecoBank remuneration policies and practices.
| MAIN COMMITTEE'S ACTIVITIES IN 2022 | |
|---|---|
| JANUARY | 2022 Employees Identified Staff definition and related 2022 Incentive System • 2022 Incentive System for PFA Identified Staff • • 2022 Quality Contest I° edition |
| FEBRUARY* | • Bonus Pool 2021 and 2021 and previous years' Incentive Systems execution Long term incentive system 2018-2020 execution for employees and PFA • 2022 Performance goals of Employees Identified Staff • 2022 PFAs Identified Staff definition • • 2021 and previous years' Incentive Systems execution for PFAs Identified Staff • 2021 incentive System and Additional Future Program implementation for PFAs and PFAs Managers. |
| MARCH | 2022 Remuneration policy and remuneration report • Report on Corporate Governance and Ownership Structures - for the section related to the Remuneration Com • mittee |
| APRIL | • 2022 Incentive Systems Plan Rules for Employees Identified Staff and 2021-2023 Long term Incentive System Plan Rules 2022 Incentive System Plan Rules for PFAs Identified Staff • 2022 FAM Remuneration Framework • |
| MAY | • 2022 Shareholders' General Meeting: outcome analysis 2022 Quality Contest II° edition • |
| JUNE | • Analysis of FinecoBank peers' remuneration policies • Incentive Systems 2nd semester 2022 for Financial Advisors and Network Managers and Plan Rules |
| JULY | • Gender neutrality of the Remuneration Policies: regulatory framework and proposal to edit the applied method ology |
| SEPTEMBER | • Information on Share Ownership Guidelines requirements • Share Ownership Guidelines: best practice analysis • Fineco Asset Management DAC 2022 Remuneration Policy |
| OCTOBER | Share Ownership Regulation • 2022 Quality Contest III° edition • |
| NOVEMBER* | • Peer Group and Benchmarking Analysis for Identified Staff • Pay for Performance Analysis • Benchmark Analysis about compensation for Members of the Administrative and Auditing Bodies |
| DECEMBER | 2023 Guidelines for PFAs and PFAs Managers Incentive System • New trends • |
During 2022, the key activities of the Remuneration Committee included:
*Two meetings of the Remuneration Committee were held in February and November.
The main topics discussed by the Committee are also submitted to the attention of the Board of Statutory Auditors, in advance over their submission to the Board of Directors. In fact, at least a member of the Board of Statutory Auditors attended the meetings of the Committee in 2022.
The following table represents the composition of the Committee and the information on the independency of the members, provides details regarding their attendance to the meetings that have been held during the year.
| NAME | EXECUTIVE | NON-EXECUTIVE | INDIP. CODE | INDIP. TUF | % (*) | (**) |
|---|---|---|---|---|---|---|
| Gianmarco Montanari | X | X | X | 100% | P | |
| Giancarla Branda | X | X | X | 100% | M | |
| Paola Giannotti De Ponti | X | X | X | 100% | M | |
N. Committee meetings: 13
(*) In this column is indicated the percentage of participation of the directors in the Committee's meetings (no. of presences/no. of meetings held during the actual period in which the director was in office in 2022)
(**) In this column is reported the capacity of the director in the Committee ("C" Chairman; "M" member).
Key contributions in 2022 of FinecoBank S.p.A. Compliance function, for all aspects that fall within its perimeter, included:
In 2023, the Compliance function will continue to operate in close co-ordination with the Human Resources function to support not only the validation but also the design and definition of compensation policy and processes.
The link between compensation and risk has been maintained in 2022 with the involvement of the CRO function in compensation design and in the definition of risk adjustment mechanisms in line with Risk Appetite Framework. In particular, the Board of Directors and Remuneration Committee leveraged on the input of involved functions to define the link between profitability, risk and reward within incentive systems.
The Internal Audit Function has examined the remuneration and incentive system adopted by FinecoBank ("Bank") and by the Group for the determination and disbursement of compensation to representatives of corporate bodies and variable remuneration to employees and the Personal Financial Advisors ("PFA"), in order to verify the compliance with the supervisory regulations issued by the Bank of Italy and the Remuneration Policy defined for 2022 and approved by the Shareholders' Meeting.
The evaluation is "mostly satisfactory" considering the overall correct application of the 2022 remuneration and incentive system and the compliance of the 2023 Remuneration Policy to relevant external regulation.
The checks carried out have ascertained in the governance area the correct fullfillment of the obligations envisaged by the regulations, the general compliance of the remuneration policies with the current regulation and the sustainability with regard to the Bank's capital and income conditions, the dissemination of the Group Policies to the subsidiary Fineco Asset Management DAC and the correct functioning of the relevant bodies, including the Remuneration Committee and the Board of Directors; internal regulation framework was found also overall adequate. Furthermore, compliance with external regulations was ascertained in the identification process of the staff belonging to the category of most relevant personnel (Identified Staff), both for employees and Personal Financial Advisors.
The incentives awarded to employees and Personal Financial Advisors (PFA) were determined in accordance with the defined policies, ensuring the correct balance of the fixed and variable components, consistency with the qualitative / quantitative assessments of the performance goals, as well as an adequate information to the Remuneration Committee and Control Bodies. It was recommended to define roles, responsibilities and controls for the scoring system introduced in 2022 within the remuneration framework for Personal Financial Advisors, as well as to formalize adequate documentation to trace the logic followed for the definition of each
indicator underlying the PFA scoring system.
The remuneration paid to company representatives, the payment and deferral of the incentive system of the previous year and the application of the employee termination policy, aligned with the corporate risk management strategy, were also correctly determined.
The Company control functions, in particular Compliance and CRO, were correctly involved, in line with respective competencies, in the definition of the remuneration policy as well as in the process of evaluating the annual performance. Also, Compliance has correctly performed the controls provided by the Bank of Italy Circular 285/2013 aimed at verifying the prohibition on activating programs or agreements that specifically protect the value of unavailable financial instruments assigned within the incentive plans (so-called personal hedging). The Bank, in compliance to relevant regulations, has correctly published on its website the Remuneration Policy 2022 as well as the Termination Policy and has submitted to Bank of Italy the requested remuneration related reporting.
The main results of the audit were presented to the Remuneration Committee on 13th March 2023.
The 2022 Incentive System, approved by FinecoBank Board of Directors on January 18, 2022, provides for the allocation of a performance related bonus in cash and/or free ordinary shares over a maximum period of 6 years.
| Cash 20% 12% 12% |
|
|---|---|
| 44% | |
| PAYOUT Shares 20% 12% 12% 12% |
56% |
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | Total | ||
|---|---|---|---|---|---|---|---|---|
| Cash | 25% | 10% | 10% | 45% | ||||
| PAYOUT | Shares | 25% | 10% | 10% | 10% | 55% |
Upfront Deferred
In line with FinecoBank governance, the Board of Directors, based on the positive opinion of Remuneration Committee, approved the 2022 evaluations and pay-out for the Chief Executive Officer and General Manager, the Deputy General Managers, the other Executives with strategic responsibilities and other Identified Staff. With reference to the Heads of the company control functions, the Risk and Related Parties Committee was involved, issuing a formal opinion about the performance appraisal and the bonus to be granted to the Head of Internal Audit.
The Board of Directors of FinecoBank on February 7, 2023, has approved the allocation of a total number of shares equal to 143,653 to be assigned in 2024, 2025, 2026, 2027 and 2028.
On the same date, the Board of Directors also approved the implementation - in 2023 - of the Incentive Systems 2017, 2018, 2019, 2020, 2021 and the 2018-2020 Long Term Incentive System for employees69.
69 The data relating to the assignments are included in the information reported in paragraphs 3.1.2 and 6 of Section II and in the Annex II
The Board of Directors, upon positive opinion of Remuneration Committee, assessed the 2022 performance of FinecoBank CEO and General Manager as Exceeds Expectations. Below the details of the individual scorecard assessment. Specifically, excellent results were achieved with reference to the quantitative KPIs of Roac, Cost Income, EL Stock and Opex, which were assessed as "greatly exceed" compared to the budget/target. AUM net sales results, though lower than budget, confirmed a good positioning with respect to Fineco's reference market.
Regarding qualitative/sustainable objectives, the results of activities implemented with reference to both the Stakeholder value and the Tone from the top were positively evaluated.
| # | WEIGHT | GOAL NAME | RESULTS | ASSESSMENT | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Below | Almost | Meets | Exceeds | Greatly Exceeds | ||||||
| | 1 | 14% | ROAC vs. budget |
Budget: 52.96% Results: 64.28% |
● | |||||
| ASSESSMENT | 2 | 14% | AUM net sales vs. budget |
Budget: 6,000 k€ Result: 3,579 k€ |
● | |||||
| 3 | 70% Equally |
14% | Cost Income vs. budget |
Budget: 34.4% Results: 29.6% |
● | |||||
| 4 | weighted | 14% | EL stock (%) vs. target |
Target: 0.21% Results: 0.12% |
● | |||||
| 5 | 14% | OPEX vs. budget Operating costs as reported in reclassified P&I, i.e.: Staff expenses + Other Administrative Expenses (direct + indi rect) - Expenses Recovery + Depreciations |
Budget: 295,794 k€ Result: 280,816 k€ |
● | ||||||
| 6 | 30% Equally weighted |
15% | Stakeholder Value vs. qualitative assessment based on: • Improve/maintain the scores of the main ESG ratings • Responsible finance: y/y % of new ISIN funds with ESG rating* • Delta on Gender Pay Gap and Gender Balance (Y/Y) • Improve Fineco's environmental performance: renewal of EMAS Registration, also through the achievement of the Envi ronmental Program goals |
• In 2022, the independent agency Standard Ethics confirmed Fineco's rating for the third consecutive year at the 'EE+' level. In addition, there was an im provement in the scores assigned by the other major ESG rating agencies: Sustainalytics; S&P's Corporate Sustainability Assessment; MSCI; Moody's ESG Solu tions (formerly Vigeo Eiris). Refinitiv confirmed the rat ing assigned the previous year. Finally, in December 2022 Fineco obtained its first CDP Climate Change rating equal to "B", demonstrating that it addresses the environmental impacts of its activities and ensures good environmental management. • In 2022, 100% of funds launched on FinecoBank plat form had an ESG rating. • The gender analysis shows a positive Y/Y trend, with out significant gaps. • In 2022, the Environmental Management System was verified by an independent Environmental Auditor to confirm its adherence to the EMAS Regulation, which resulted in the successful outcome of the verification without highlighting any non-conformity. Also, in Sep tember 2022 FinecoBank became the first Italian as set gatherer to obtain the EMAS Registration, Europe's most important award for excellence in environmental management. The targets set within the 2021-2024 Environmental Program proceed as planned, with (i) the increase of the coverage of funds with ESG rating, (ii) the increase of the exposure to ESG bonds as a % of the total FinecoBank portfolio, (iii) the achievement of 100% of electricity consumption from renewable sources, related to buildings in which the electric utili ties are registered to Fineco and (iv) the launch of the digital debit and reloadable cards. |
● | |||||
| 7 | 15% | Tone from the top on conduct and compliance culture vs. qualitative assessment based on: • Promotion of initiatives aimed at fostering staff integrity, cus tomer protection, trustworthiness by enhancing risk & control culture. • The overall status of audit, compliance and External Authorities' findings considering the type, severity and the timely comple tion of the related remedial actions. |
• Tone from the top activities have been carried out through the promotion of the compliance and risk cul ture with specific policies, communications and train ing sessions. • Overall internal compliance and audit findings as at the end of 2022 show neither open critical aspects nor major/critical older than two years in overdue sta tus. • All requests/evidence from external authorities have been promptly and successfully managed by involving the relevant functions of the Bank. |
● |
Excluding UK representing for Fineco a new opening market
Starting from 2022, new provisions have been introduced on the subject of "gender neutrality" following the update of the applicable regulatory framework. In fact, the 37th update of the Bank of Italy Circular no. 285 of 2013 on remuneration policies has defined the Gender Pay Gap as the ratio between the average remuneration of the most represented gender and the average remuneration of the least represented gender, analyzing separately members of the Board of Directors, Identified Staff and Non-Identified Staff.
For more detailed analysis, the guidelines of the European Banking Authority for sound remuneration policies provide that the pay gaps must also be defined at the level of "position/role" in order to carry out an assessment according to the concept of Gender Equity Pay Gap i.e., "equal pay for equal work".
In application of the aforementioned regulatory provisions, an analysis was carried on both "Gender Pay Gap" and "Gender Equity Pay Gap" and the results were submitted to the Remuneration Committee and to the Board of Directors, which is responsible for overseeing the neutrality of policies with respect to gender and for monitoring any eventual gender pay gap. The results of the analysis are shown below:
Specific activities have been implemented aimed at supporting an effective monitoring of the gender neutrality of remuneration policies, including, by way of example, a specific control aimed at monitoring and intervening on any gender pay gaps as part of the annual process of salary review and the periodic update of the analysis on gender neutrality.
Please refer to the 2022 Non-Financial Statement for further details on the demographic composition of the Group and on the initiatives aimed at promoting fair gender representation at the different levels of the organization (gender balance).
Considering the overall business results achieved by the Company and on the basis of the elements reported in the preceding paragraph, the 2022 Chief Executive Officer and General Manager's performance was assessed as "Exceeds Expectation".
Notwithstanding, considering the actual macro-economic context, that influenced the achievement of the AUM Net Sales KPI, the Board of Directors, upon the favorable opinion of the Remuneration Committee, decided to award a short-term variable bonus equal to € 860,000, which is approximately 14% less than the maximum amount he could receive considering the ratio between variable and fixed remuneration of 2:1.
The short-term variable remuneration, so determined, allows to maintain a competitive compensation, considering the Company results and confirming the respect of pay for performance principle.
For the purpose of applying the ratio between variable and fixed remuneration, it should be noted that the Chief Executive Officer received a fixed remuneration of € 1,000,000 and that an annual pro-quota of € 1,000,000 relating to the long-term variable remuneration (LTI 2021-2023) is also included as variable remuneration, in line with the applicable legislation.
The € 860,000 bonus linked to the short-term incentive system awarded for the 2022 performance will be delivered in cash and in shares, with an upfront portion equal to 40% and a deferred portion equal to 60%, according to the deferral scheme described in Section II p. 3.1, which considers the period of unavailability of the shares both upfront and deferred, as required by law.
For 2022, according to our Compensation Policy, in line with regulatory provisions, it has been defined ex-ante the maximum ratio between variable and fix component of the compensation both for the Chief Executive Officer and General Manager (the only executive director sitting on the Board of Directors and employee of the Company) and for the other Executives with strategic responsibilities.
Tables 1, 3A e 3B Annex 3A n. 7-BIS (Consob Regulation n. 11971 of 14 May 1999), reported in the paragraph 6.2, contain information regarding Executives with strategic responsibilities. It is also specified that:
In particular, ex-ante defined specific metrics that reflect categories of our Fineco Risk Appetite Framework align the remuneration of the Chief Executive Officer and General Manager and of the other Executives with strategic responsibility to sustainable performance and value creation for the shareholders in a medium/long term perspective. Specific individual goals are set out taking into consideration the market practices and the role assigned within the Group, through the systematic use of specific indicators aimed at strengthening the sustainability of business, such as, for example, risk and financial sustainability indicators and profitability measures70.
70 Since the CFO - included in the Executives with Strategic Responsibilities - cover also the activities related to the Financial Statements, the individual goals are defined in coherence with the assigned tasks
It is also foreseen the deferral in cash and shares of minimum 50% of the incentive. All the instalments are subject to the application of malus and/or claw-back conditions, as legally enforceable. The 2022 Incentive System provides for 50% of the annual incentive to be deferred and paid in the five following years through the granting of FinecoBank shares. The number of such shares is set at the beginning of the deferral period, thus creating a link between the evolution of the share price and the actual value of the incentive.
The Chief Executive Officer and General Manager, on top of 2022 Incentive System, benefits also from:
The entity and duration of the deferral are aligned with the provisions set by regulators and are consistent with the characteristics of the business and with the Bank's risk profiles.
The achievement of all entry conditions71 allows the execution of the Incentive Systems for the Employees Identified Staff, which have been approved in previous years and provide a cash and/or shares instalment in 2023. In particular, these are 2017, 2018, 2019, 2020, 2021 Incentive Systems, for which the Board of Directors approved on February 7, 2023:
71 With reference to the cash tranches, reference is made to the 2022 entry conditions, for the share tranches, reference is made to the 2021 entry conditions, in consideration of the unavailability period.
| IMPLEMENTED | PAYMENT | OUTSTANDING | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | |
| Incentive System 2017 |
CASH | CASH | SHARES | CASH SHARES |
SHARES | CASH SHARES |
||||
| Incentive System 2018 |
CASH | CASH | SHARES | CASH SHARES |
SHARES | CASH SHARES |
||||
| Incentive System 2019 |
CASH | SHARES | CASH SHARES |
CASH SHARES |
SHARES | CASH SHARES |
||||
| Incentive System 2020 |
CASH | SHARES | CASH SHARES |
CASH SHARES |
CASH SHARES |
CASH SHARES |
||||
| Incentive System 2021 |
CASH | SHARES | CASH SHARES |
CASH SHARES |
CASH SHARES |
CASH SHARES |
Following, the implementation dashboard for the aforementioned plans:
Moreover, the achievement of all the entry conditions allowed the execution of the 2018-2020 Long Term Incentive Plan for the employees, according to the Board of Directors decision of May 8, 2018. In particular, the Board of Directors on February 7, 2023 approved the payment of the first instalment to CEO/GM, the first instalment and the second instalment to the others Identified Staff and the third instalment to the beneficiaries of the Plan who belong to the Non-Identified Staff category.
The 2022 Incentive System PFA, approved by the Board of Directors on January 18, 2022, takes into consideration all the national and international regulatory requirements for the sales networks incentives and directly links bonuses with the objectives of growth in the medium and long term, in a general framework of overall sustainability.
The System, implemented within the framework of our policy and governance, provides for the allocation of a performance related bonus in cash and/or shares over 4 years.
In line with FinecoBank governance, the 2022 performance evaluations and payouts for PFA Identified Staff have been approved by the Board of Directors, based on the positive opinion of Remuneration Committee.
Based on the resolutions of the Board of Directors of February 7, 2023, the total number of shares serving the 2022 Incentive System for Financial Advisors is 27,466 to be assigned in 2024, 2025 and 2026.
On the same date, the Board of Directors also approved the execution - in 2023 - of the Incentive Systems 2018, 2019, 2020, 2021 and of the 2018-2020 Long Term Incentive Plan for PFA Identified Staff72.
The achievement of all entry conditions73 allows the execution of the Incentive Systems for the Personal Financial Advisors Identified Staff, which have been approved in previous years and provide a cash and/or shares instalment in 2023. In particular, these are 2018, 2019. 2020 and 2021 PFA Incentive Systems, for which the Board of Directors approved on February 7, 2023:
72 The data relating to the assignments are included in the information reported in paragraphs 3.2.1 and 6 of the Remuneration Report and in the Annex II. 73 With reference to the cash tranches, reference is made to the 2022 entry conditions, for the shares tranches, reference is made to the 2021 entry conditions, in consideration of the unavailability period.
Incentive System, in coherence with the equivalent cash amount approved by the Board of Directors with the resolution of January 10, 2019.
| IMPLEMENTED | PAYMENT | OUTSTANDING | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |||
| Incentive System PFA 2018 |
CASH | CASH | SHARES | CASH SHARES |
SHARES | |||||
| Incentive System PFA 2019 |
CASH | SHARES | SHARES | CASH SHARES |
||||||
| Incentive System PFA 2020 |
CASH | CASH SHARES |
CASH SHARES |
CASH SHARES |
||||||
| Incentive System PFA 2021 |
CASH | CASH SHARES |
CASH SHARES |
CASH SHARES |
CASH |
Following, the implementation dashboard for the aforementioned plans:
Moreover, the achievement of all the entry conditions allows the execution of the 2018-2020 Long Term Incentive Plan for PFA Identified Staff, according to the Board of Directors decision of May 8, 2018. In particular, the Board of Directors on February 7, 2023 approved the payment of the first share instalment to the beneficiaries of the Plan.
The remuneration for members of the administrative and auditing Bodies of FinecoBank S.p.A. is represented only by a fix component, determined based on the importance of the position and the time required to perform the assigned tasks.
This approach applies to non-Executive Directors and to the Supervisory Body members that are not employees of FinecoBank or other Legal Entities of the Group, as well as to Statutory Auditors.
The compensation paid to non-Executive Directors, to the Supervisory Body members and to the Statutory Auditors is not linked to the economic results achieved by FinecoBank and none of them takes part in any incentive plans based on stock options or, generally, based on financial instruments. The compensation has been defined referring to market benchmarks.
The amount of the remuneration of the Chairman of the Board of Directors does not exceed the fixed remuneration received by the CEO.
| BENEFICIARIES* | REMUNERATION COMPONENT |
APPROVED BY | AMOUNT (€) | NOTES |
|---|---|---|---|---|
| Non-Executive Directors | Fixed only | Board of Directors of March 9, 2020 and Shareholders' Meeting of April 28, 2020 Board of Directors of March |
Yearly amount: • € 505,000 for the Board of Directors • € 110,000 for participat ing in the Risk and Relat ed Parties Committee • € 65,000 for participat ing in other BoD's Com mittees € 35,000 e € 25,000 re • spectively for the Chair man and the Members of the Supervisory Body • € 600 attendance fee for***: - BoD - BoD's Committees |
Compensation is deter mined based on the rele vance of the role and the effort required to carry out the assigned activities. |
| 9, 2020, according to art. 2389 par. 3 of Civil Code and heard the favourable opinion of the Statutory Au ditors |
• € 260,000 yearly, divid ed between: - BoD Chairman - BoD Deputy Chairman |
|||
| Statutory Auditors | Fixed only | Shareholders' Meeting on April 28, 2020 |
Yearly*: • € 65,000 for the Chair man of Statutory Auditors • € 50,000 for each effec tive member € 600 as attendance fee • for BoD and Statutory Audit meetings |
* Mr. Alessandro Foti, as a FinecoBank employee, renounces to the remuneration approved for the office of Chief Executive Officer.
** The overall amount for the Board of Directors (including the Executive Director) approved by the Assembly is € 550,000.
*** With the BoD decision of June 9, 2020, the new Members of the Supervisory Body have been nominated.
**** In case of multiple meetings on the same day, the fee can be cumulated.
***** Alternate Statutory Auditors don't receive any compensation, except if they permanently substitute one of the Auditors.
None of the Directors have contracts containing clauses envisaging the payment of indemnities, or the right to keep post-retirement benefits, in the event of resignations or dismissal/revocation without just cause or if the employment relationship is terminated following a public purchase offer. In case of early termination of the mandate, the ordinary law provisions would therefore apply.
The individual employment contract of the Chief Executive Officer and General Manager, Mr. Alessandro Foti, is governed - also concerning the event of resignations, dismissal or termination - by the ordinary provisions of the law and National Labor Agreement for Banking Industry Executives. In such context, the annual remuneration used to define the possible indemnity due in the above mentioned instances would include the fix remuneration, any other continuative compensation and the average of the variable pay (inclusive of the components paid in equity - such as for example free shares, restricted shares, performance shares - with the only exclusion of the valorisation of the stock options potentially assigned within long-term incentive plans) received in the last three years prior to the termination. The actual amount of such indemnity – in terms of months of compensation considered – is then bound to vary depending on the events which led to the termination and on the relationship's duration and is anyway subjected to provisions of the "Severance Policy" of FinecoBank approved by the Shareholders' Meeting on April 10, 2019 and in line with paragraph 3.2 of Section I.
Non-executive Directors do not receive, within incentive plans, stock options or other equities. For the Chief Executive Officer and General Manager no specific provisions are provided with reference to the right to keep, in case of termination, the options received and the plans' provisions apply.
For none of the Directors currently in office, provisions exist regarding the establishment of advisory contracts for a term following the termination of the directorship, nor the right to keep post retirement perks. No agreements exist either providing compensation for non-competition undertakings.
Compensation was awarded in compliance with the remuneration policy approved by the Shareholders' Meeting on April 28, 2022, keeping into account the broad consensus achieved74:
| VOTING RESULTS | |
|---|---|
| Section I – 2022 Remuneration policy | |
| (Shareholders' Meeting's approval is required) | 91.4% of favorable votes |
| Section II – 2021 Remuneration report | |
| (a non-binding advisory vote is required) | 95.8% of favorable votes |
In line with the most recent regulatory provisions, as outlined in the Consob Regulation n. 11971/1999 updated on December 11, 2020, it is displayed the comparison of the annual variation for the last three years75 of the following information:
74 Cf. art. 123-ter paragraph 4 lett. b) bis TUF
75 In application of the transitory provision that allows the company to provide the comparison of information of the financial years starting from January 1, 2019, instead of the five years' preceding the regulatory amendment
| COMPANY PERFORMANCE VARIATION | ||||
|---|---|---|---|---|
| Euro/ 000 | FY 2022 | FY 2022 vs FY 2021 | FY 2021 vs FY 2020 | FY 2020 vs FY 2019 |
| Company results* | ||||
| Revenues | 948,062 | 17.8% | 7.4% | 17.9% |
| Net Profit | 428,810 | 22.8% | 7.6% | 19.2% |
* Data adjusted
| INDIVIDUAL COMPENSATION VARIATION | ||||
|---|---|---|---|---|
| Euro/ 000 | FY 2022 | FY 2022 vs FY 2021 | FY 2021 vs FY 2020 | FY 2020 vs FY 2019 |
| Management Body members' remuneration* | * | |||
| Alessandro Foti (CEO/GM) | 2,999 | -1.8% | 7.6% | 7.8% |
| Non-Executive Directors remuneration** | ||||
| Marco Mangiagalli (Chairman) - In office since april 28th 2020 |
257 | 0% | 47.8% | - |
| Francesco Saita (Deputy Chairman) |
188 | 0.6% | 9.4% | 24.2% |
| Patrizia Albano | 112 | 0.5% | 15.6% | 56.0% |
| Elena Biffi | 123 | -2.4% | 16.9% | 25.4% |
| Giancarla Branda - In office since april 28th 2020 |
87 | 3.0% | 45.3% | - |
| Paola Giannotti De Ponti - In office since april 28th 2020 |
119 | 1.5% | 56.8% | - |
| Marin Gueorguiev - In office since april 28th 2020 |
91 | -0.7% | 57.9% | - |
| Gianmarco Montanari | 120 | 0.9% | 9.2% | 17.2% |
| Maria Alessandra Zunino De Pignier - In office since april 28th 2020 |
124 | 1.0% | 51.4% | - |
| Alessandra Pasini - Role taken over during 2021 |
57 | 28.1% | - | - |
| Statutory Auditors remuneration*** | ||||
| Luisa Marina Pasotti (Chairman) - Role taken over during 2020 |
94 | 2.7% | 267.2% | - |
| Massimo Gatto - In office since april 28th 2020 |
81 | 3.6% | 43.9% | - |
| Giacomo Ramenghi - Role taken over during 2020 |
80 | 4.8% | 300.7% | - |
* Equal to the total remuneration (column 6 Table 1 Annex 3A n. 7-bis of the Issuers' Reg. Reported in paragraph 6.2) inclusive of the instalments of the short-term incentive systems vested during the year (column 11 Table 3A Annex 3A no. 7-bis of the Issuers' Reg. Reported in paragraph 6.2) and, conventionally, of the pro quota for 2021 of the maximum amount of the 2021-2023 LTI plan as represented in paragraph 3.1, Section II. For the years 2020 and 2019, for the 2018-2020 LTI plan, the annual pro quota is considered with respect to the amount actually awarded.
** It includes the fees as members of the Board of Directors, the fees for any position within the internal Board Committees, the attendance fees for participation in the respective meetings and any expense reimbursement.
*** These include the fees as members of the Board of Statutory Auditors, attendance fees for participation in the meetings of the Board of Directors and the Board of Statutory Auditors and any expense reimbursement.
| EMPLOYEES' AVERAGE REMUNERATION VARIATION | ||||
|---|---|---|---|---|
| Euro/ 000 | FY 2022 | FY 2022 vs FY 2021 | FY 2021 vs FY 2020 | FY 2020 vs FY 2019 |
| Employees' average remuneration* | ||||
| Average fixed and variable annual remuneration |
58 | 1.8% | 3.6% | 6.7% |
*Intended as the average total remuneration paid out in the referred year (excluding social security contributions), therefore: average fixed remuneration and average variable remuneration, which corresponds to all variable remuneration paid in the referred year (the short and long-term incentive systems' instalments and deferrals awarded in previous years were therefore included). It should be noted that a change in the methodology with respect to the information provided in 2021, as it is more representative of the remuneration paid (in 2021 the average variable remuneration did not include the productivity bonus). For comparison purposes, the data relating to the previous years have been restated.
| Consob Issuers' Regulation no. 11971, Article 84-quater - Annex 3A / Schedule 7-bis | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amounts in euro (A) |
(B) | (C) | TABLE 1: Compensation paid to members of the administrative and auditing bodies, to general managers and to other executives with strategic responsibility (D) |
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | ||||||
| Fixed Compensation | Variable non-equity | ||||||||||||||||
| Name and surname | Office | Period in which office was held | Office expiration date | Emoluments resolved by the Shareholdes' Meeting |
Attendance tokens |
Lump sum expense reinbursements * |
Compensation for specific offices ex article. 2389 Italian Civil Code |
Fixed salary | Total | Compensation for committee membership |
compensation Bonuses and other incentives |
Profit sharing |
Non-monetary benefits |
Other remunaration |
Total | Fair Value of equity compensation |
Severance indemnity for end of office or termination of employment |
| Marco Mangiagalli | Chairman of the Board of Directors | 01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 | 7,200 | 200,000 | 257,200 | 257,200 | |||||||||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
50,000 50,000 |
7,200 7,200 |
- - |
200,000 200,000 |
- - |
257,200 257,200 |
- - |
- - |
- - |
- - |
- - |
257,200 257,200 |
|||||
| Francesco Saita | Deputy Chairman of the Board of Directors | 01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 | 7,200 | 60,000 | 117,200 | 117,200 | |||||||||
| Chairman of Risk and Related Parties Committee Member of the Corporate Governance and Environmental and Social Sustainability Committee (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 13,800 7,200 28,200 |
- | 60,000 | - | 13,800 7,200 138,200 - |
30,000 20,000 50,000 |
- | - | - | - | 43,800 27,200 188,200 - |
|||
| Alessandro Foti | (III) Total Chief Executive Officer/ General Manager |
50,000 | 28,200 | - | 60,000 | - 1,000,000 |
138,200 1,000,000 |
50,000 | - 378,400 |
- | - 5,038 |
- | 188,200 1,383,438 |
703,276 | |||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
- - |
- - |
- - |
- - |
1,000,000 1,000,000 |
1,000,000 - 1,000,000 |
- - |
378,400 378,400 |
- - |
5,038 5,038 |
- - |
1,383,438 - 1,383,438 |
703,276 703,276 |
||||
| Patrizia Albano | Member of the Board of Directors Member of the Corporate Governance and Environmental and Social Sustainability Committee |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 6,600 7,800 |
56,600 7,800 |
20,000 | 56,600 27,800 |
|||||||||
| Member of the Appointments Committee (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 50,000 |
7,200 21,600 21,600 |
- - |
- - |
- - |
7,200 71,600 - 71,600 |
20,000 40,000 40,000 |
- - |
- - |
- - |
- - |
27,200 111,600 - 111,600 |
|||
| Elena Biffi | Member of the Board of Directors | 01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 | 7,200 | 57,200 | 57,200 | ||||||||||
| Member of the Risk and Related Parties Committee Chairman of the Appointmements Committee (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 13,800 7,200 28,200 |
- | - | - | 13,800 7,200 78,200 - |
20,000 25,000 45,000 |
- | - | - | - | 33,800 32,200 123,200 - |
|||
| (III) Total | 50,000 | 28,200 | - | - | - | 78,200 | 45,000 | - | - | - | - | 123,200 | |||||
| Giancarla Branda | Member of the Board of Directors Member of the Remuneration Committee (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 50,000 |
7,800 7,800 15,600 |
1,229 1,229 |
- | - | 59,029 7,800 66,829 |
20,000 20,000 |
- | - | - | - | 59,029 27,800 86,829 |
||
| (III) Total | 50,000 | 15,600 | 1,229 | - | - | 66,829 | 20,000 | - | - | - | - | 86,829 | |||||
| Paola Gianotti De Ponti | Member of the Board of Directors Member of the Risk and Related Parties Committee Member of the Remuneration Committee |
01/01/2022 01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 7,200 13,800 8,400 |
57,200 13,800 8,400 |
20,000 20,000 |
57,200 33,800 28,400 |
|||||||||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
50,000 50,000 |
29,400 29,400 |
- - |
- - |
- - |
79,400 79,400 |
40,000 40,000 |
- - |
- - |
- - |
- - |
119,400 119,400 |
|||||
| Marin Gueorguiev | Member of the Board of Directors Member of the Risk and Related Parties Committee |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 7,200 13,800 |
57,200 13,800 |
20,000 | 57,200 33,800 |
|||||||||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
50,000 | 21,000 | - | - | - | 71,000 | 20,000 | - | - | - | - | 91,000 | |||||
| (III) Total | 50,000 | 21,000 | - | - | - | 71,000 | 20,000 | - | - | - | - | 91,000 | |||||
| Gianmarco Montanari | Member of the Board of Directors Chairman of the Remuneration Committee Member of the Appointments Committee |
01/01/2022 01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 7,200 8,400 7,200 |
2,296 | 59,496 8,400 7,200 |
25,000 20,000 |
59,496 33,400 27,200 |
||||||||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
50,000 | 22,800 | 2,296 | - | - | 75,096 - |
45,000 | - | - | - | - | 120,096 - |
|||||
| Alessandra Pasini | (III) Total Member of the Board of Directors |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 50,000 |
22,800 7,200 |
2,296 | - | - | 75,096 57,200 |
45,000 | - | - | - | - | 120,096 57,200 |
||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
50,000 50,000 |
7,200 7,200 |
- - |
- - |
- - |
57,200 57,200 |
- - |
- - |
- - |
- - |
- - |
57,200 57,200 |
|||||
| Maria Alessandra Zunino De Pignier | Member of the Board of Directors Member of the Risk and Related Parties Committee |
01/01/2022 01/01/2022 |
31/12/2022 31/12/22 financial statements approval | 50,000 | 7,800 | 57,800 | 57,800 | ||||||||||
| Chairman of the Corporate Governance and Environmental and Social Sustainability Committee (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval 31/12/2022 31/12/22 financial statements approval |
50,000 | 14,400 6,600 28,800 |
- | - | - | 14,400 6,600 78,800 |
20,000 25,000 45,000 |
- | - | - | - | 34,400 31,600 123,800 |
|||
| (III) Total | 50,000 | 28,800 | - | - | - | 78,800 | 45,000 | - | - | - | - | 123,800 | |||||
| TOTAL BOARD OF DIRECTORS | (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
500,000 - |
210,000 - |
3,524 - |
260,000 - |
1,000,000 - |
1,973,524 - |
305,000 - |
378,400 - |
- - |
5,038 - |
- - |
2,661,962 - |
703,276 - |
- - |
||
| (III) Total | 500,000 | 210,000 | 3,524 | 260,000 | 1,000,000 | 1,973,524 | 305,000 | 378,400 | - | 5,038 | - | 2,661,962 | 703,276 | - | |||
| Luisa Marina Pasotti | Chairman of the Board of Statutory Auditors (I) Total compensation in the company preparing the financial statements |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 65,000 65,000 |
27,600 27,600 |
1,680 1,680 |
- | - | 94,280 94,280 |
- | - | - | - - |
- | 94,280 94,280 |
||
| (II) Compensation from subsidiaries and associates (III) Total |
65,000 | 27,600 | 1,680 | - | - | 94,280 | - | - | - | - | - | 94,280 | |||||
| Massimo Gatto | Standing Auditor (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 50,000 |
27,600 27,600 |
2,909 2,909 |
- | - | 80,509 80,509 |
- | - | - | - | - | 80,509 80,509 |
||
| (III) Total | 50,000 | 27,600 | 2,909 | - | - | 80,509 | - | - | - | - | - | 80,509 | |||||
| Giacomo Ramenghi | Standing Auditor (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 50,000 |
27,600 27,600 |
2,176 2,176 |
- | - | 79,776 79,776 |
- | - | - | - | - | 79,776 79,776 |
||
| Alessandro Gaetano | (III) Total Alternate Auditor |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | 50,000 | 27,600 | 2,176 | - | - | 79,776 - |
- | - | - | - - |
- | 79,776 - |
||
| (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
- | |||||
| Lucia Montecamozzo | Alternate Auditor (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
01/01/2022 | 31/12/2022 31/12/22 financial statements approval | - | - | - | - | - | - - |
- | - | - | - - |
- | - | ||
| TOTAL BOARD OF STATUTORY AUDITORS |
(III) Total (I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates |
- 165,000 - |
- 82,800 - |
- 6,765 - |
- - - |
- - - |
- 254,565 - |
- - - |
- - - |
- - - |
- - - |
- - - |
- 254,565 - |
- - |
- - |
||
| * For "out of pocket expenses" and mileage travelled | (III) Total | 165,000 | 82,800 | 6,765 | - | - | 254,565 | - | - | - | - | - | 254,565 | - | - | ||
| Other Executives with Strategic Responsibility** (total no.5) |
(I) Total compensation in the company preparing the financial statements (II) Compensation from subsidiaries and associates (III) Total |
- - |
- - |
- - |
- - |
1,840,000 - 1,840,000 |
1,840,000 - 1,840,000 |
- - |
848,096 - 848,096 |
- - |
68,654 - 68,654 |
- - |
2,756,750 - 2,756,750 |
1,233,129 - 1,233,129 |
|||
| ** The Total Remuneration of the Deputy General Managers is equal to respectively €1,189,814, €1,177,690, €972,583. |
| Amounts in euro | TABLE 2: Stock Option assigned to the Members of the Administrative Body, to General Managers and other Executives with Strategic Responsability | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Opzions held at the beginning of the year | Opzions assigned during the year | Options exercised during the year | |||||||||||||||
| (A) | (B) | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) | (13) | (14) | (15) | (16) |
| Name and surname | Office | Plan | Number of Options |
Exercise Price |
Exercise Period (from to) |
Number of Options |
Exercise Price |
Exercise Period (from to) |
Fair Value at Assignment Date |
Assignment Date |
Market Price of Underlying Shares upon Assignment of Options |
Number of Options |
Exercise Price |
Market Price of Underlying Shares on Exercise Date |
Options Lapsed during the year (Number) |
Options held at the end of the year (Number) |
Options relevant to this year (Fair Value) |
| Alessandro Foti | Chief Executive Officer/ General Manager |
||||||||||||||||
| (I) Compensation in the Company preparing the Financial Statements | |||||||||||||||||
| (II) Compensation from Subsidiaries and Associates | - | ||||||||||||||||
| (III) Total | |||||||||||||||||
| Other Executives with Strategic Responsibility | |||||||||||||||||
| (I) Compensation in the Company preparing the Financial Statements |
|||||||||||||||||
| (II) Compensation from Subsidiaries and Associates | - | ||||||||||||||||
| (III) Total |
| Amounts in euro | TABLE 3A: Incentive Plans based on financial instruments other than stock options for Members of the Administrative Body, General Managers and other Executives with Strategic Responsibility | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| years and not vested during the year | Financial instruments assigned during previous | Financial instruments assigned during the year | Financial instruments vested during the year and not assigned |
Financial instruments vested during the year and assignable |
Financial instruments relevant to the year |
||||||||
| (A) | (B) | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) |
| Name and surname | Office | Plan | Number and type of financial instruments |
Vesting period | Number and type of financial instruments |
Fair Value on assignment date |
Vesting period | Assignment date Market price upon assignment |
Number and type of financial instruments |
Number and type of financial instruments |
Value on maturity date | Fair Value | |
| Alessandro Foti | Chief Executive Officer/ General Manager | ||||||||||||
| (I) Compensation in the Company preparing the Financial Statements | Fineco shares - 2018 Group Incentive System |
8,881 | 146,492 | 12,588 | |||||||||
| Fineco shares - 2019 Group Incentive System |
9,199 | 31.12.2023 | 9,199 | 151,738 | 39,444 | ||||||||
| Fineco shares - 2020 Incentive System | 17,622 | 1/2 31.12.2023 1/2 31.12.2024 |
8,811 | 145,337 | 83,473 | ||||||||
| Fineco shares - 2021 Incentive System | 23,691 | 1/3 31.12.2023 1/3 31.12.2024 1/3 31.12.2025 |
64,908 | ||||||||||
| Fineco shares - 2022 Incentive System | 29,195 | 481,600 | 37% 31.12.2022 21% 31.12.2024 21% 31.12.2025 21% 31.12.2026 |
07/02/2023 | 16.495 | 10,427 | 171,993 | 301,657 | |||||
| Fineco shares - 2018-20120 LTI Plan | 154,858 | 31.12.2023 | 201,206 | ||||||||||
| (II) Compensation from Subsidiaries and Associates | |||||||||||||
| (III) Total | 481,600 | - | 615,560 | 703,276 | |||||||||
| Other Executives with Strategic Responsibility | |||||||||||||
| (I) Compensation in the Company preparing the Financial Statements |
no. 4 Executives | Fineco shares - 2018 Group Incentive System |
18,944 | 312,481 | 26,851 | ||||||||
| no. 4 Executives | Fineco shares - 2019 Group Incentive System |
19,171 | 31.12.2023 | 19,171 | 316,226 | 82,202 | |||||||
| no. 4 Executives | Fineco shares - 2020 Incentive System | 36,638 | 52% 31.12.2023 18% 31.12.2024 |
19,964 | 329,306 | 178,745 | |||||||
| no. 4 Executives | Fineco shares - 2021 Incentive System | 52,179 | 1/3 31.12.2023 1/3 31.12.2024 1/3 31.12.2025 |
142,959 | |||||||||
| no. 4 Executives | Fineco shares - 2022 Incentive System | 65,118 | 1,074,304 | 37% 31.12.2022 21% 31.12.2024 21% 31.12.2025 21% 31.12.2026 |
07/02/2023 | 16.495 | 23,985 | 395,633 | 672,830 | ||||
| no. 4 Executives | Fineco shares - 2018-20120 LTI Plan | 44,196 | 31.12.2023 | 44,196 | 729,013 | 129,541 | |||||||
| (II) Compensation from Subsidiaries and Associates | |||||||||||||
| (III) Total | 1,074,304 | - | 2,082,659 | 1,233,129 |
| Amounts in euro | TABLE 3B: Cash-based Incentive Plans for Members of the Administrative Body, General Managers and other Executives with Strategic Responsability | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (A) | (B) | (1) | (2) | (3) | (4) | ||||
| Bonus for the year | Prior years' bonus | #FinecoBank S.p.A. - Internal Use Only | |||||||
| (A) | (B) | (C) | (A) | (B) | (C) | ||||
| Name and surname | Office | Plan | Payable / Paid | Deferred | Deferral period | No longer payable |
Payable / Paid | Still deferred | Other Bonuses |
| Alessandro Foti | Chief Executive Officer/ General Manager |
||||||||
| 2022 Incentive System | 172,000 | 206,400 | 50% 31.12.2024 50% 31.12.2027 |
||||||
| 2021 Incentive System | 240,000 | ||||||||
| (I) Compensation in the Company preparing the Financial Statements | 2020 Incentive System | 120,000 | 120,000 | ||||||
| 2019 Group Incentive System | 102,000 | ||||||||
| 2018 Group Incentive System | 170,000 | ||||||||
| 2017 Group Incentive System | 170,000 | ||||||||
| (II) Compensation from Subsidiaries and Associates | |||||||||
| (III) Total | 172,000 | 206,400 | 290,000 | 632,000 | |||||
| Other Executives with Strategic Responsibility | |||||||||
| no. 4 Executives | 2022 Incentive System | 395,680 | 452,416 | 50% 31.12.2024 50% 31.12.2027 |
|||||
| no. 4 Executives | 2021 Incentive System | 528,640 | |||||||
| (I) Compensi nella società che | no. 4 Executives | 2020 Incentive System | 271,910 | 260,710 | |||||
| redige il bilancio | no. 4 Executives | 2019 Group Incentive System | 212,580 | ||||||
| no. 4 Executives | 2018 Group Incentive System | 362,632 | |||||||
| no. 5 Executives * | 2017 Group Incentive System | 297,594 | |||||||
| (II) Compensation from Subsidiaries and Associates | |||||||||
| (III) Total | 395,680 | 452,416 | 569,504 | 1,364,562 |
| TABLE 1: Investments of the Members of the Administrative and Auditing Bodies and General Managers | |||||||
|---|---|---|---|---|---|---|---|
| Number of shares | |||||||
| Name and surname | Office | Investee Company |
Type of shares | Held at the end of 2021 |
Acquired during the year* |
Sold dutring the year | Held at the end of 2022 |
| BOARD OF DIRECTORS | |||||||
| Marco Mangiagalli Francesco Saita |
Chairman of the Board of Directors Deputy Chairman of the Board of Directors |
- - |
- - |
||||
| Alessandro Foti | Chief Executive Officer/ General Manager | FinecoBank | Ord. | 483,233 | 42,482 | 18,267 | 507,448 |
| Patrizia Albano | Member | - | - | ||||
| Elena Biffi | Member | - | - | ||||
| Giancarla Branda | Member | - | - | ||||
| Paola Gianotti De Ponti | Member | - | - | ||||
| Marin Gueorguiev | Member | - | - | ||||
| Gianmarco Montanari | Member | 200 | 200 | ||||
| indirect possession (spouse) | FinecoBank | Ord. | 100 | 100 | |||
| Maria Alessandra Zunino De Pignier | Member | - | - | ||||
| Alessandra Pasini | Member | - | - | ||||
| BOARD OF STATUTORY AUDITORS | |||||||
| Luisa Marina Pasotti | Chairman of the Board of Statutory Auditors | - | - | ||||
| Massimo Gatto | Standing Auditor | - | - | ||||
| Giacomo Ramenghi | Standing Auditor | - | - | ||||
| Alessandro Gaetano | Alternate Auditor | ||||||
| Lucia Montecamozzo | Alternate Auditor | - | - |
*including shares linked to Incentive Plans
| TABELLA 2: Investments of the other Executives with Strategic Responsibility | ||||||
|---|---|---|---|---|---|---|
| Number of shares | ||||||
| Executives with Strategic Responsibility |
Investee Company | Type of shares | Held at the end of 2021 |
Acquired during the year* |
Sold dutring the year Held at the end of 2022 | |
| 4 | FinecoBank | Ord. | 630,045 | 79,211 | 47,848 | 661,408 |
Our employees enjoy welfare, healthcare and life balance benefits that supplement social security plans and minimum contractual requirements. These benefits are intended to provide substantial guarantees for the well-being of staff and their family members during their active careers as well as in retirement.
With reference to the complementary pension plans, there are defined benefit plans and defined contribution plans. In the first ones the benefit's calculation is known in advance, while in defined contribution plans the benefit depends on allocated asset management results. #FinecoBank S.p.A. - Internal Use Only
Complementary pension plans are offered by external pension funds, legally autonomous from the Group. In particular, the pension funds usually subscribed by employees are "closed" funds.
Subscribers can distribute contribution, depending on their own risk appetite, among investment lines characterized by different risk/yield ratios.
For employees who choose to join the reference Pension Fund for FinecoBank, with some exceptions, the Company recognizes a contribution calculated on the compensation useful for calculating the "Trattamento di Fine Rapporto", if the employee chooses to pay the contribution at his own expense.
As part of the supplementary health care, employees are offered a Health Plan, which also benefits their tax-dependent family members, dental coverage and additional dedicated policies (e.g. Life, Accident, Permanent Disability, Professional and extra-professional "Kasko" policies).
FinecoBank also offered its employees and family members the opportunity to take out a Long Term Care insurance policy which guarantees an annuity in the event of loss of self-sufficiency.
Finally, all employees can take advantage of a digital platform that allows them to easily manage their Welfare credit in a diversified basket of services (e.g. education, family assistance, free time, etc.). Furthermore, in 2021,
digital vouchers were introduced for the first time, which can be used in various product areas, which further expand the possibility of spending through the welfare account.
Finally, for employees with managerial qualifications and for those who, as part of their business, travel around the area for service reasons, a car is assigned for mixed use. The choice of available models is in line with the objectives set out in the Multi-Year Plan, providing only hybrid and / or electric cars, with the aim of reducing the environmental impact resulting from vehicular traffic.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.