Remuneration Information • May 4, 2020
Remuneration Information
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Prepared pursuant to:
article 123-ter of the Consolidated Law on Finance (TUF), as amended by Legislative Decree no. 49/2019 and article 84-quater and outlines no. 7, 7-bis and 7-ter of Annex 3A of the Regulation adopted by CONSOB resolution no. 11971 of 14 May 1999 et seqq., implementing Legislative Decree no. 58 of 24 February 1998.
Rome, 22 April 2020
| Letter from the Chairman of the Remuneration Committee to the Shareholders 3 |
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|---|---|---|
| First Section: Report on the 2020 Remuneration Policy of doValue S.p.A5 | ||
| 1 | GENERAL INFORMATION6 | |
| 1.1. | Introduction6 | |
| 1.2. | Regulatory framework 7 |
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| 1.3. | The new Group organisation and medium-long term strategy: remuneration plan to support the business plan, with a sustainability approach 7 |
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| 2. | The remuneration policy Governance Process9 | |
| 2.1. | Shareholders' Meeting10 | |
| 2.2. | Board of Directors10 | |
| 2.3. | Remuneration Committee12 | |
| 2.4. | Chief Executive Officer13 | |
| 2.5. | Human Resources Function13 | |
| 2.6. | Other Functions involved14 | |
| 3. | Remuneration policy for 2020 14 |
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| 3.1. | Elements of the remuneration policy for 2020 15 |
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| 3.2. | Remuneration policy recipients 15 |
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| 3.3. | Remuneration of the Board of Directors 15 |
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| 3.3.1. | Directors not holding particular offices16 | |
| 3.3.2. | Directors holding particular offices16 | |
| 3.4. | Remuneration of the Board of Statutory Auditors17 | |
| 3.5. | Chief Executive Officer17 | |
| 3.5.1 | Variable Remuneration of the CEO18 | |
| 3.5.2 | Benefits provided in the event of leaving office or termination of the office as CEO | 20 |
| 3.6. | Remuneration of Managers with strategic responsibilities21 | |
| 3.6.1. | Fixed remuneration21 | |
| 3.6.2. | Variable remuneration 22 |
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| 3.6.3. | Variable remuneration payment 23 |
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| 3.6.4 | Severance in the event of early termination of DIRS25 | |
| 4 | Ban on hedging strategies26 | |
| Second | Section: Report on remuneration paid in 201927 | |
| Introduction28 | ||
| 1. | Salient events during the 2019 financial year28 | |
| 2. | Remuneration Committee30 |
| 3. | 2019 Main results 31 |
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|---|---|---|
| 3.1 Economic results and activation of Group Gates 31 |
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| 3.2 Remuneration paid to corporate bodies 32 |
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| 3.2.1 Remuneration approved for the Board of Directors33 | ||
| 3.2.2 Remuneration approved for the Board of Statutory Auditors and Supervisory Body 33 |
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| 3.3 doValue Group CEO remuneration 33 |
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| 3.4 Remuneration of Managers with Strategic Responsibilities and Resources with 2:135 | ||
| 3.5 Hiring and severance pay36 | ||
| 3.6 CONSOB quantitative tables36 |
Dear Shareholders,
I am pleased to present the "Report on the 2020 Remuneration Policy and remuneration paid in 2019" of doValue (hereinafter also "the Report") which will be submitted to the Shareholders' Meeting of 26 May 2020.
The year 2019 was one of great changes for the Group: on 24 June 2019 doValue, previously doBank, after obtaining the necessary authorisation, acquired the status of a listed servicing company with the consequent cancellation from the register of banking groups.
In accordance with the transformation of the company purpose, focussed on servicing activities, on 7 November 2019 doValue presented an update of the business plan with 2019-2022 targets that outlines the business lines – also in light of the completion of the acquisition of 85% of Altamira, the biggest operator specialised in distressed debt in Spain, and the agreement signed for the acquisition, currently being completed, of 80% of the share capital of Eurobank FPS Loans & Credits Claim Management Company (FPS), a leading servicing company operating in Greece - and identified the objectives and relative targets for the coming years, with an increasingly international scope aimed at a leadership position in South Europe.
The early months of 2020 have witnessed a scenario characterised by strong uncertainty at a global level and, obviously national as well, caused by the health emergency related to the COVID-19 epidemic.
The current negative situation connected with the effects of COVID-19, which are not expected to result in structural changes of sector dynamics, requires a cautious approach to short-term performance, in a context of limited visibility. Specifically, despite the continuation of doValue's operations in all its markets, the Group is attentively monitoring the activity of the judicial system and public services in general, as well as the decisions on bank standstill arrangements and the dynamics of the real estate sector, which influence the timing of of procedures and collections.
In light of this context, a decision was made to maintain the remuneration policy in line with that of 2019 after the transformation of the banking parent company into a servicing company ("post de-banking" remuneration policy) defined in detail by the Board of Directors' meeting of 2 August 2019 within the parameters approved last year by the Shareholders' Meeting. Therefore, considering appropriate to postpone defining new objectives more consistent with the Group's current structure - with a more strategic approach - to a period of less uncertainty, thus presumably, in the second half of the year. Any changes and updates to the remuneration policy represented in this document (to be made in accordance to the procedure described below) apposite information will be provided to the market and detailed disclosure given in the Second Section which will be submitted for an advisory vote of the Shareholders' Meeting to be convened to approve the Financial Statements for the year ending 31 December 2020.
It should be noted that for the scenario just described, 2020 will still be a year focussed on a major development programme for the Group, towards a governance model in line with international best practices, appropriate in relation to the businesses controlled in Europe, and a remuneration strategy aimed at maximising the return on investments for the various stakeholders
Moreover, the year in course is characterised by important changes in relation to remuneration transparency and "say on pay" introduced with Legislative Decree no. 49/2019 the SHRD II adopted in Italy which amended article 123-ter of the Consolidated Law on Finance concerning Remuneration Reports and introduced a binding vote in terms of the remuneration policy and advisory vote regarding paid remuneration.
The remuneration policy - described in the first section of this Report - has been defined, as mentioned, maintaining the prudential principles in terms of alignment between remuneration and risks undertaken and basically in line with the 2019 "post de-banking" policy, taking into consideration some specific elements related to the new corporate and business organisation of doValue (listed servicing company no longer subject to banking regulations), and compliant with the legal framework required for listed companies.
The Remuneration Policy is an important tool for discussion with investors and with the public in general, aimed at highlighting the methods by which the Group's Top management is incentivised to pursue the business objectives and to achieve the desired results, for example:
The 2020 Remuneration Policy, in describing the principles and elements of the remuneration, pursues a new commitment in terms of communication with the aim of offering more complete and transparent information, clearly responding to market requirements and regulations concerning adopted remuneration practices and lastly pointing out their consistency with the short and long term business strategies and objectives to the benefit of Shareholders and all other Stakeholders.
I would like to take the opportunity to thank the Shareholder for your trust conferred, and the other members of the Remuneration Committee for their collaboration and proactive contribution.
This Report on the Remuneration Policy 2020 and Remuneration Paid 2019 was approved by the Board of Directors on 22 April and is submitted to the Shareholders' Meeting, in accordance with the Provisions of article 123 ter of the Consolidated Law on Finance.
The Chairman of the Remuneration Committee
This Report - prepared in compliance with articles 114-bis and 123-ter of the "Consolidated Law on Finance", updated with Legislative Decree 49/2019 and article 84-quater and annexes of the "Issuers Regulation" - illustrates the remuneration policy of doValue S.p.A. (hereinafter also "doValue") and is organised in two sections:
Moreover, the first section illustrates how the remuneration policy contributes to the company strategy, pursuit of long term interests and company sustainability.
This document is prepared in compliance with the mentioned laws and regulations and in line with the recommendations regarding remuneration of the Corporate Governance Code from the "Corporate Governance Committee" of listed companies (hereinafter "Corporate Governance Code") in the July 2018 version 1 , which doValue adopts.
This Report (First and Second Section) was approved by doValue's Board of Directors on 22 April; in line with article 123-ter of the Consolidated Law on Finance, the First Section - the "Report on the 2020 remuneration policy" - it is subject to a binding vote of the Shareholders' Meeting while the Second Section - the "Report on remuneration paid for 2019" - is subject to an advisory vote of the Shareholders' Meeting convened for 26 May 2020 to approve the Financial Statements for the year ending 31 December 2019.
This Report is made available to the public, at the company's registered office and on doValue's website in the Governance Section - Remuneration (https://www.dovalue.it/en/governance/remuneration), at least twenty-one days before the date of the Shareholders' Meeting convened to approve the financial statements related to 2019, according to the requirements of current laws.
The Information Document related to the remuneration plan based on financial instruments can be obtained in the Governance Section - Remuneration of doValue's website.
1 It should be noted that in January 2020 the new "Corporate Governance Code" was published which will be applied starting in 2021.
The Report on the 2020 remuneration policy and on remuneration paid in 2019 of doValue S.p.A. is defined within the regulatory framework in terms of the remuneration and incentive system, composed of the following sources for listed companies:
The objective of the remuneration policy is to achieve, in the interest of all stakeholders, remuneration systems aligned with company objectives and values, long term strategies and with a view to managing risk and sustainability.
The doValue Group is a leader in the management of primarily non-performing loans for banks and public and private investors. The Group has also developed a range of ancillary products related to servicing activity which include gathering, developing and providing property-related and legal information on borrowers and providing property services that are also related to recovery activities (e.g. participation in auctions, REOCO, etc.) and support activities for the judicial recovery of loans.
The doValue Group intends to continue to reinforce its position as leader in the credit servicing sector in Europe, in line with the objectives outlined in the update of the 2019-2022 targets of the business plan, focussed on:
The year 2019 highlighted the achievement of important results that lay solid bases for the strategic lines set forth.
* excluding non recurring items
From 2017, the year of listing, to date, doValue has radically expanded and diversified its activities, at the same time maintaining a high profitability and generation of cash flow, with:
Product diversification, the larger customer portfolio and capital solidity of doValue are particularly important in the current market scenario, characterised by different macroeconomic cycles and product able to balance out in the larger South Europe market, a greater focus on customers on real estate servicing and UTP debts, and lastly possible consolidation scenarios between servicing sector operators that facilitate M&A opportunities.
Peer Group: Arrow Global; B2Holding; Banca Farmafactoring; Banca IFIS; Banca Sistema; Cerved; Encore Capital Group; Hoist Finance; illimity2 ; Intrum Justitia; Kruk; PRA Group.
From the listing on 31 December 2019 doValue has reported a total Shareholders Return of 46%, compared to the TSR reported in FTSE mid cap in the same period, equal to 18%, and in the monitored peer group, totalling an average of -20% (excluding Illimity which was not listed on the date measuring started).
The main activities related to the remuneration cycle
2 Illimity included in the index starting from the listing date in 2019.
The process related to the definition, adoption and implementation of the remuneration policy takes into account the delegations of the various bodies and functions involved and aims at ensuring that each delegated company body or function fully exercises the responsibilities defined by external regulations, the articles of association or internal regulations.
Again in 2020 doValue used the assistance of Willis Towers Watson in preparing the Report on the remuneration policy and paid remuneration.
The remuneration policy is reviewed at least annually by doValue's Board of Directors based on a proposal from the Remuneration Committee and is later submitted for approval to the Shareholders' Meeting, along with the section related to paid remuneration, in line with the requirements of the current regulatory framework.
The Human Resources Function examines the policy at least annually and makes a proposal to revise this document. In making the proposal, the Function considers, in particular, the evolution of the market, strategies and risk profile, liaising to that end with the competent Functions and Company Bodies, which provide their contribution to the process according to their respective remits as described in more detail below.
Several Bodies and Functions are involved in this process, each for its own areas of competence defined in keeping with regulatory requirements, the Articles of Association and Company's internal governance model.
The role of doValue's Company Bodies and Company Functions is mentioned below for the remuneration policy definition, adoption and implementation process.
The Shareholders' Meeting of doValue:
The Board of Directors:
In line with the provisions of article 123-ter, paragraph 3-bis of the Consolidated Law on Finance (updated in 2019), the Board of Directors, in the event of exceptional circumstances, upon proposal of the Remuneration Committee and after consultation with the Risks and Transactions with Related Parties Committee, may temporarily make an exception to the elements of the remuneration policy described in paragraph 3.
Exceptional circumstances refer only to situations where an exception to the remuneration policy is necessary for pursuing long term interests and sustainability of the company as a whole or for ensuring the ability to remain on the market.
In this case, during the year or by the date of the Shareholders' Meeting convened to approve the Financial Statements for the year closed 31 December 2020, it should be noted that there is the possibility of stipulating a new individual agreement with the CEO to take into account the recent corporate and business evolutions and to ensure a growing alignment of his remuneration structure with the changed context.
If this will occuer, all of the changes to be made to the CEO's remuneration structure, as an exception to the policy described in this document, will have to be approved by the Board of Directors (with the CEO abstaining from voting as well as being absent from the board discussion) based on a proposal from the Remuneration Committee and after consultation with the Risks and Transactions with Related Parties Committee (in line with the process described in the previous point).
The composition of the Board of Directors and relative bodies is shown below:
| Board of Directors |
Male (U) Female (D) |
Independent | Executive | Nomination Committee |
Risk and Transactions with Connected Persons Committee |
Remuneration Committee |
|
|---|---|---|---|---|---|---|---|
| Giovanni Castellaneta |
C | U | M | M | |||
| Andrea Mangoni |
M | U | X | ||||
| Francesco Colasanti |
M | U | M | ||||
| Emanuela Da Rin |
M | D | X | ||||
| Giovanni B. Dagnino |
M | U | M | C | |||
| Nunzio Guglielmino |
M | U | M | C | |||
| Giovanni Lo Storto |
M | U | X | C | M | ||
| Giuseppe Ranieri |
M | U | X | ||||
| Marella Idi Maria Villa |
M | D |
P: Chairman
M: Member
The Remuneration Committee, made up of a minimum of three non-executive members and with most in possession of the independence requirements, supports the Board of Directors with consulting, advisory and investigative functions relevant to the remuneration and incentive systems.
In particular, the Remuneration Committee:
The Remuneration Committee meets, when convened by its Chairman, whenever necessary to perform the activities required by law and by the internal regulations that govern its operating procedures.
The scheduling of the Remuneration Committee's ordinary activities for 2020 is illustrated below. The possibility remains for the Remuneration Committee to meet during 2020 to examine other issues that may arise during the year.
CEO:
The Parent Company's Human Resources Function collaborates with the CEO and the competent company functions to provide all necessary and opportune information for the proper functioning of the remuneration policy and concretely implements the Board of Directors' resolutions on remuneration and incentives, through the following activities:
The Parent Company's Administration, Treasury, Planning and Control Area:
The Parent Company's Legal and Corporate Affairs Function:
participates in defining and reviewing the Remuneration Policy, with particular reference to remuneration for members of the doValue's Company Bodies, guaranteeing the consistency of the policy with the adopted corporate governance structures.
The Investor Relations Function:
promotes dialogue with the investors and proxy advisors, addressing the received feedback and voting guidelines to the functions in charge.
doValue S.p.A. 2020 remuneration policy includes the following elements:
Neither the CEO nor the Managers with Strategic Responsibilities can be recipients of discretionary one-off payments.
The CEO's remuneration structure may undergo changes if a new individual agreement is signed with the CEO in the course of the year or by the date of the Shareholders' Meeting convened to approve the Financial Statements for the year ended 31 December 2020; in any case such changes must be approved according to the procedure described in paragraph 2.2.
The following paragraphs describe the details of the remuneration policy and the single elements composing it with reference to the various recipients of the policy.
The 2020 remuneration policy is differentiated based on the following categories of recipients:
The ordinary Shareholders' Meeting establishes the remuneration to be paid to the bodies it appoints, and in particular, to the members of the Board of Directors. The Shareholders' Meeting may set a maximum amount for the remuneration of all Directors, including the Directors holding particular offices, to be distributed among the individual members as decided by the Board of Directors.
The allocation methods of the remuneration of the Board of Directors among its members are established by resolution of the Board itself. If not resolved by the Shareholders' Meeting, after consulting with the Board of Statutory Auditors and Remuneration Committee, the Board of Directors establishes the remuneration of the Directors holding particular offices in accordance article 2389, third paragraph, of the Civil Code (including the Directors forming part of the Board's committees). Specifically, the Chairman of the Board of Directors receives a remuneration of an amount consistent with the central role assigned to him and it is determined beforehand.
The remuneration of Directors not holding particular offices is composed of:
The Shareholders' Meeting of 19 April 2018 established - in addition to what is described in the paragraph below for the Chairman - a total overall compensation for Directors not holding particular offices of 850,000.00 euro gross annually, of which:
In light of what is established by the Shareholders' Meeting - and taking account of the remuneration established by the Shareholders' Meeting itself to the Chairman of the Board of Directors - the Board of Directors, consistent with the provisions of the Articles of Association in that regard and having consulted with the Remuneration Committee, has established 30,000.00 euro as the amount due to each member of the Board of Directors, other than the Chairman.
It should be noted that the CEO has waived the amount due to him in the capacity of Director.
The Directors are also entitled to the reimbursement of expenses incurred in the exercise of their functions.
It should also be noted that the Directors not holding particular offices are not recipients of the variable remuneration systems.
All the Directors are also entitled to a D&O (Directors & Officers) insurance policy.
The Board of Directors, consistent with the provisions of the Articles of Association in that regard and having consulted with the Remuneration Committee, has also established the additional compensation due to the Directors for participation in Committees totalling:
The Shareholders' Meeting of 19 April 2018 established an annual compensation totalling 400,000 euro for the Chairman of the Board of Directors.
The Chairman is not a recipient of the variable remuneration systems and, like the other Directors, has the right to the reimbursement of the expenses incurred in the exercise of his functions.
The Chairman is also entitled to a D&O (Directors & Officers) insurance policy.
In line with the current regulatory framework, the Chairman abstains from votes that regard his remuneration and is also not present at board discussions on these matters.
The ordinary Shareholders' Meeting votes on the annual amount due to each auditor in accordance with the law. That sum is fixed and invariable for the entire duration of the office. In no case may the Auditors receive forms of variable remuneration.
The Shareholders' Meeting of 19 April 2018 defined the following fees on an annual basis:
The Auditors are also entitled to the reimbursement of expenses incurred in the exercise of their functions.
The Auditors are also entitled to a D&O (Directors & Officers) insurance policy.
The remuneration structure of the Group's CEO is established in order to align the incentives with the Group's long-term interests, and in general, those of shareholders and investors, and to ensure the long-term sustainability of remuneration and incentive systems while taking into account changes in risks assumed by the Group over time. The structure of the CEO's remuneration has fixed and variable components established so as to maximise the alignment with the interests of shareholders and the company.
The remuneration package of doValue S.p.A. CEO is articulated in two compenets, in continuity with the provisions of the 2019 "post-debanking" remuneration policy, as follows:
Benefits are also assigned that are in line with the relevant policies, in addition to D&O (Directors and Officers) insurance coverage, of a stable and pre-determined nature.
Remuneration Package Pay Mix and MBO Chart for the CEO
Payment of the variable remuneration is subordinate to the preliminary and joint acheivement of the gates that also guarantee the sustainability of the Group's incentive systems.
Specifically, no variable remuneration is paid in the event that the entry gate identified for the purposes of activating the Group's incentive systems is not met ("Access Gates"):
Consolidated EBITDA at least equal to 80% of what was defined during planning (strategic and operational).
The indicator will be considered net of extraordinary transactions approved by the BoD.
Variable remuneration is paid based on the degree to which the assigned targets have been achieved. The maximum possibility is recognised upon achieving the maximum level of all the assigned objectives.
The assigned variable remuneration is gradually reduced for performances not in line with the assigned objectives. The same is zeroed if the entry gate is not met.
The graph depicts changes in the performance of the payout compared to the earnings target, zeroing the variable component if the performance is below the threshold value, and maturing 100% if the target value is achieved.
In order to align the incentives with the long-term interests of the Group, and in general, those of shareholders and investors, and to ensure the long-term sustainability of the remuneration and incentive systems, and taking into account the performance over time of the risks assumed by the Group, any variable remuneration assigned is paid over a timeframe of several years as indicated in the diagram below:
The payment of deferred amounts is also subject to the verification of the Access Gate and the following malus conditions:
The values of these indicators are checked os of 31 December of the year prior to the year the deferred amount matures.
Once the achievement of the above conditions has been verified, the payment of deferred amounts is also subject to meeting the condition that the average market value of shares in the 3 months prior to the Vesting date (date the Board of Directors votes on achievement of the performance objectives and meeting the gates) is at least equal to €8.55 (Minimum Vesting Value). If on the vesting date, the minimum vesting value has not been reached, vesting will be deferred by 12 months, after which, the condition will again be verified and, if again it has not been met, vesting will be deferred a further 12 months; if at this point (24 months after the original vesting date) the Minimum Vesting Value has not been reached, the corresponding deferred amount will be cancelled.
The shares subject to deferral, when the required conditions are met, are increased by a number of shares corresponding to the amount of the dividend paid on the same during the deferral period.
Without prejudice to the right to compensation for any additional damages, after payment of the bonus, the Company reserves the right, within 5 years from the granting date of the variable remuneration and regardless of whether the employment is ongoing or terminated, to ask the Beneficiary to repay the bonus or the equivalent monetary value of the assigned Shares ("clawback"), if one of the following cases occurs:
It should be noted that, given the use of doValue common shares, the Company will submit for approval to the Shareholders' Meeting convened on 26 May 2020, the "Remuneration Plan based on financial instruments", accompanied by the relative Information Document prepared as per article 114-bis of the Consolidated Law on Finance.
As mentioned above, the CEO cannot be a recipient of the discretional one-off payments.
In keeping with best practices and the Company's policies, there is an agreement with the CEO which governs ex-ante the economic aspects related to early termination of the corporate office and/or early termination of contract aimed at preventing the hazard of a current or future dispute, thus avoiding the risks inevitably connected with a lawsuit that could have consequences including of a reputational and image nature for the Company, ensuring at the same time greater certainty in legal relationships.
The amount resulting from application of this agreement cannot exceed a maximum number of 24 months of total remuneration, calculated based on the last fixed remuneration and average of the variable remuneration in the previous three year period.
Without prejudice to compliance with the aforesaid total maximum limit equal to 24 months of gross conventional overall remuneration, in terms of the CEO, the existing agreement links the remuneration to the achieved performance and residual duration of the agreement. In particular, in the event of early departure from office for reasons other than just cause, the provided benefit is equal to 25% of the last monthly fixed remuneration received, multiplied by the number of months between the date of leaving office and the month of March, included, of the year after the last year in office underway plus 1/12 of 50% of the last allocated MBO, multiplied by the number of months between the date of leaving office and the closing date of the 2022 financial year.
On the date this Report was written, the Managers with Strategic Responsibilities are:
CEO
Chief Financial Officer
The remuneration fixed component of Managers with Strategic Responsibilities is characterised as stable, irrevocable and correlated to the professionalism and responsibility of the position. It includes the Gross Annual Salary, any position-related indemnity connected to specific roles within the company organisation as well as benefits, when granted to all employees either by category or bracket of employees or by company role covered and taking into consideration market practices.
In particular, "benefits" are forms of remuneration in kind, and also the result of policies concerning categories of employees or second-level contracts, effective on a time-to-time basis, aimed at increasing the motivation and loyalty of employees. The main benefits that can currently be granted, in addition to what is already provided by the National Collective Labour Agreement (where applicable) consistent with the internal regulations applicable on a time-to-time basis, are:
assignment of mixed use company car;
3 In the event of change of the area of Managers with Strategic Responsibilities during the year, including following the Group's organisational structure, the elements of the remuneration structure defined in this section represent the guiding principles of the remuneration structure, which will be organised taking into account the specific nature of the reference geographic market and assigned responsibility.
The remuneration policy measures having an impact on the structural part of remuneration, as well as any assignment of benefits, are usually implemented on an annual basis.
The Managers with Strategic Responsibilities are recipients of a "Management by Objectives" (known as "MBO") type of incentive system. The MBO system, based on a "pay-for-performance" principle, uses "individual" objective charts consistent with the strategic and operational plans and with the assigned position and responsibilities.
Buy-outs, aimed at ensuring the attraction of resources with proven experience, are only allowed during the hiring phase.
Managers with Strategic Responsibilities are recipients of the "MBO" incentive system whose incentive possibility is defined within the maximum incidence of 200% of gross annual remuneration.
The possibility of achieving an incentive amount greater than 100% of fixed remuneration is correlated to overperformance and subject to achievement of the EBITDA objective greater than 100% based on the following incentive curve:
The actual definition of the maximum MBO possibility for the Managers with Strategic Responsibilities is performed by the Board of Directors, after consultation with the Remuneration Committee.
Payment of the variable remuneration is subordinate to the preliminary and joint acheivement of the entry gate that also guarantee the sustainability of the Group's incentive systems.
Specifically, no variable remuneration is paid in the event that the entry gate identified for the purposes of activating the incentive systems is not met ("Access Gates"):
Consolidated EBITDA at least equal to 80% of what was defined during planning (strategic and operational).
The indicator will be considered net of extraordinary transactions approved by the BoD.
Variable remuneration is paid based on the degree to which the assigned targets have been achieved. The maximum possibility is recognised upon achieving the maximum level of all the assigned objectives.
The assigned variable remuneration is gradually reduced for performances not in line with the assigned objectives. The same is zeroed for failure to meet the minimum performance threshold that activates the MBO system.
The objectives of Managers with Strategic Responsibilities are defined by the Board of Directors, after consultation with the Remuneration Committee, based on a proposal from the CEO.
The objectives are structured as follows:
The actual assignment of the variable component and the respective amount are defined by the Board of Directors, after consultation with the Remuneration Committee, at the outcome of the process that assessed the actual achievement of the specified objectives, which is managed by the Parent Company's Human Resources Function.
Without prejudice to the right to compensation for any additional damages, after payment of the bonus, the Company reserves the right, within 5 years from the granting date of the variable remuneration and regardless of whether the employment is ongoing or terminated, to ask the Beneficiary to repay the bonus or the equivalent monetary value of the assigned Shares ("clawback"), if one of the following cases occurs:
As previously mentioned, Managers with Strategic Responsibilities cannot be recipients of discretionary one-off payments.
Any variable remuneration assigned, in the event of the possibility of variable remuneration greater than 100% of gross annual remuneration, is paid over several years based on the scheme indicated below:
The shares subject to deferral, when the required conditions are met, are increased by a number of shares corresponding to the amount of the dividend paid on the same during the deferral period.
If the incentive assigned, amounts to than €40,000 it is entirely paid in cash and up-front.
Any variable remuneration assigned, in the event of the possibility of variable remuneration equal to a maximum of 100% of gross annual remuneration, is paid over several years, based on the scheme indicated below:
If the incentive assigned, amounts to less than €40,000 it is entirely paid in cash and up-front.
It should be noted that, given the use of doValue common shares, the Company will submit for approval to the Shareholders' Meeting in their 26 May 2020 session, the "Remuneration Plan based on financial instruments", accompanied by the relative Information Document prepared as per article 114-bis of the Consolidated Law on Finance.
In keeping with best practices and the Company's policies, it is possible to define agreements which govern the economic aspects related to early termination of the corporate office and/or early termination of employment contract aimed at avoiding the hazard of a current or future dispute, thus avoiding the risks inevitably connected with a lawsuit that could have consequences including of a reputational and image nature for the Company, ensuring at the same time greater certainty in legal relationships.
The amount defined in such agreements, as termination payment, cannot exceed a maximum number of 24 months of total remuneration, calculated on the basis of the last fixed remuneration and the average of the variable remuneration of the previous three years .
In calculating termination payments, long-term performance is taken into consideration, in terms of creation of value for Stakeholders, any legal requirements, as well as the provisions of collective or individual contracts and all individual circumstances included in the reasons for an early termination. leaving.
The company cost associated with indemnity for pre-notice, amounts due and accrued to the date of termination (unused holidays, etc.) and any defined non-compete compensation, are excluded if considered appropriate and in the interest of the Company and/or its subsidiaries, by the Board of Directors prior consultation with the Remuneration Committee.
The application of personal hedging strategies or insurance on remuneration or on other aspects, aimed at altering, if not even eliminating, the principle of risk weighting, which is inherent in remuneration and incentive mechanisms, are prohibited.
Second Section: Report on remuneration paid in 2019
Section II of the Remuneration Report was prepared in accordance with:
This section provides a concise and descriptive representation of the remuneration for recipients of the remuneration policy and shows the aforesaid remuneration in tables.
In this context and in compliance with normative provisions, disclosure is provided related to the following recipient of the remunerations policy:
The year 2019 represented a year of transformation from a banking group to a servicing company.
In this context, doValue S.p.A., previously doBank S.p.A., introduced some changes to its remuneration policy in relation to this change, ensuring an alignment to the business and organisational strategy.
Important business results have been achieved, in line with the growth trends already reported the previous year and consistent with the expectations for the strategic plan that includes reinforcement of doValue's leadership in the European credit servicing market.
These results are reflected in our incentive systems characterised by a direct connection with the actual performance of the Group and the business where we operate. All of the access thresholds to the 2019 incentive plans were met and the remuneration results are described in the details and tables provided below in this section.
The 2019 remuneration and incentive policies of the doValue Group (hereafter, the "Policy"), were approved on 12 March 2019 by the Parent Company's Board of Directors based on a proposal from the Remuneration Committee and by the Shareholders' Meeting on 17 April 2019.
The Policy, in line with the 2018-2020 strategic plan, included the possible transformation of the former doBank, now doValue, in the first half of 2019, into a servicing company in possession of the license as per article 115 Consolidated Law on Public Safety and elimination of the banking group with consequent release of significant resources (hereinafter the "Transformation").
However, in order to be able to adjust to industry best practices, the Policy envisages the possibility of introducing simplifications and flexibilities, in view of the fact that the prudential supervisory and regulatory requirements would no longer be applicable after the Transformation, provided that such Transformation took place by the first half of 2019, despite maintaining among the fundamental principles sustainability with respect to a long-term timeframe.
In this regard, it should be noted that the Shareholders' Meeting delegated the Board of Directors, after consultation with the Remuneration Committee, to introduce greater flexibility to the payment schemes for the beneficiaries of the 2:1 variable fixed ratio and for Key Figures, upon occurrence of the Transformation on a date before 30 June 2019 and based on verification of the economic sustainability of the impacts of such changes.
Due to the fact that the Transformation was authorised by the Bank of Italy on 21 June 2019 and the same occurred on 24 June 2019, doValue's remuneration and incentive systems underwent adjustments as described below.
In terms of the access gates, the Policy requires that the variable remuneration be paid upon achieving the assigned objectives and in the presence of consolidated EBITDA at least equal to 90% of the lower between what is defined during the strategic and operational planning and 64 million euro, while the capital and liquidity gates are no longer applicable, as they are related to prudential supervision and regulatory provisions.
Similarly, the deferred amounts are paid in the presence of a consolidated EBITDA at least equal to 90% of the lesser between what was defined during the strategic and operational planning and 64 million euro.
In consideration of the corporate Transformation, on 2 August 2019 the Board of Directors, based on a proposal of the Remuneration Committee, approved the following changes to the payment terms and deferral of variables, as well as the company access gates:
In terms of the access gates, the Board of Directors considered it appropriate to introduce another indicator, in addition to EBITDA, which addresses economic-financial sustainability. The indicator was identified in the Debt to EBITDA multiple not greater than 3 times.
| Beneficiaries of the 2:1 variable fixed ratio |
Policy 2019 as a Bank | Maximum flexibility approved as Servicer |
Policy post "debanking" BoD 2/8/2019 |
||
|---|---|---|---|---|---|
| Up-Front and Deferred amounts | 60:40 | 70:30 | 65:35 | ||
| Cash e Shares amounts | 50:50 | 60:40 | 55:45 | ||
| Defferal Period | 3 years | 2 years | 2,5 years | ||
| Lock up up front shares amounts | 2 years | 1 year | 1,5 years |
The payment and deferral terms have been changed as indicated below
| MRTs as of the 2019 Policy approval date |
Policy 2019 as a Bank | Maximum flexibility approved as Servicer |
Policy post "debanking" BoD 2/8/2019 |
||
|---|---|---|---|---|---|
| Up front e deferred amounts | 60:40 | 70:30 | 65:35 | ||
| Defferal Period | 1 year | 1 year | 1 year |
In terms of the deferred amounts for the beneficiaries with a 2:1 variable fixed ratio and for Key Figure, they are payble as follows: 15% for the first deferred amount and 10% for each of the other deferred amounts.
The Remuneration Committee plays an essential role in supporting the Board of Directors in supervising the Group's Remuneration Policy and design of incentive plans.
The Committee has a consultative and propositional function and does not limit the Board of Directors' responsibility or decision-making power. Specifically, the Committee's purpose is to assess the adequacy and implementation of the remuneration and incentive policies and plans, as well as their implications in relation to the assumption and management of risks.
In line with the provisions of the Regulation of Corporate Bodies and Committees, the Committee is composed of 3 non-executive directors. The work is coordinated by a Chairman selected from its members.
The Remuneration Committee, established in July 2017, on the approval date for this document, was composed of:
| REMUNERATION COMMITTEE | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| CHAIRMAN NUNZIO GUGLIELMINO |
|||||||||
| MEMBER | GIOVANNI LO STORTO | ||||||||
| MEMBER | FRANCESCO COLASANTI |
All members of the Committee, in its current composition, are independent in accordance with article 148, paragraph 3, of Legislative Decree no. 58/98 ("Consolidated Law on Finance" - "TUF") and possess the independence requirements required by the Law, which coincide with those required by the Articles of Association. All Committee members are in possession of the professional requirements required by current normative and regulatory provisions. Some members have a specific technical expertise and experience in financial and remuneration policy issues.
During 2019, the Committee held 7 meetings with reference to Remuneration matters. Below are details of the meetings and the subjects discussed during those Committees:
Meetings and matters discussed on remuneration in sessions of the Remuneration Committee
| Session | Matters discussed |
|---|---|
| 12 March 2019 | - Material Risk Takers of the doBank Group: process adopted and results of the analysis for 2019; - Managers with Strategic Responsibilities of the doBank Group: 2019 self-assessment; - Review of 2018 variable remuneration system and Audit Opinion on 2018 Remuneration; |
| - Paragraph on the Report on Corporate Governance and Ownership |
|
|---|---|
| Structure - 2018 Financial Year; | |
| - Annual Report on Remuneration Committee activities and main results; |
|
| - Acknowledgement of the Committee's 2019 budget. |
|
| - Annual Report on remuneration and incentive policies: |
|
| 21 March 2019 | |
| a) Sect. I - 2019 policy; | |
| b) Sect. II - 2018 implementation; | |
| - 2019 Incentive Plan based on financial instruments (with CONSOB |
|
| Information Document for 2019 stock option plan); | |
| - Severance Pay Policy; |
|
| - 2019 MBO system regulation Key Resources and other "selected |
|
| resources". | |
| 16 April 2019 | - Disclosures concerning remuneration and incentive policies. |
| 20 June 2019 | - 2019 incentive system: Selected Resources to whom to allocate a |
| variable component higher than 100%. | |
| 17 July 2019 | - 2019 incentive system: Selected Resources to whom to allocate a variable component higher than 100%. |
| 1 August 2019 | - Revision of the 2019 Remuneration Policy and 2019 MBO chart for the |
| CEO; | |
| - 2018 audit finding objective review; |
|
| - Market benchmark result on 2:1. |
|
| - Update of Committee's Regulation. |
|
| 7 November 2019 | |
The payment of variable remuneration is subject to the preliminary and joint achievement of the of the activation gates which also ensure compliance with capital and liquidity stability indexes established as a part of the procedures to assess the doValue Group's risk appetite.
With reference to the Group's performance in the 2019 financial year, following the final analysis of the results achieved at 31 December 2019, the achievement of the minimum level provided for the "Group Gates" and the consequent activation of the related incentive systems is highlighted.
Below are details for each "gate indicator":
| GATE INDICATOR | TARGET | FINAL | |||
|---|---|---|---|---|---|
| EBITDA | 64 m/€ | 77,68 m/€ | | ||
| Multiplo Debt t o EBITDA |
3x | 1,28x | |
The final variable remuneration (including contributions) totals €12.760.032, which corresponds to 13.9% of the pre-bonus pool EBITDA.
The indicated amount does not compromise the capital and liquidity requirements. In line with what is defined in the 2019 Group Policy, the sum of the various incentive components did not in any case exceed the maximum limit set for each Personnel category.
The sum of the various incentive components did not in any case determine a bonus greater than 200% of the fixed remuneration for Personnel with maximum incentive up to a 2:1 variable fixed ratio and greater than 100% of fixed remuneration for the remaining Personnel.
Resources with a maximum limit of 2:1 were not paid a bonus greater than the fixed remuneration since the overperformance level of the EBITDA objective was not met and was a condition for a bonus amount greater then the fixed remuneration.
The paragraphs below provide the details on the final review results of the incentive systems.
EBITDA Pre-Bonus Pool 2019 Vs 2018
The amount of fees incurred for the doValue directors amounts to €742,385, including for participation in Board Committees, while for the statutory auditors and members of the Supervisory Body the sum is €182,097, making an overall cost item of €924,482.
Therefore the amounts do not include compensation received by the members of the Board of Statutory Auditors who hold offices in other doValue Group companies (€99,282).
With reference to the period between 1 January and 31 December 2019 the fees resolved by the Shareholders' Meeting of 19 April 2018 were paid, which established in the maximum value of 640,000 euro the overall gross annual fee due to the members of the Board of Directors. The annual fee granted for specific offices held is broken down as follows:
In light of what was established by the Shareholders' Meeting and taking account of the remuneration already assigned by the Shareholders' Meeting itself to the Chairman of the Board of Directors, the Board of Directors, after consultation with the Remuneration Committee, has suggested establishing at:
With reference to the period between 1 January and 31 December 2019 the fees resolved by the Shareholders' Meeting held on 19 April 2018 were paid, structured on an annual basis as follows:
CEO Total Pay Vs EBITDA 2018 Vs 2019
Based on what is established in the individual contract signed with the Company on 5 April 2016, the CEO received a fixed remuneration for 2019 totalling €2,500,000.
The CEO waived his compensation as director provided by the Shareholders' Meeting of 19 April 2018 totalling €30,000.
The 2019 fixed remuneration is payable as follows: €1,500,000 in shares and €1,000,000 in cash.
As regards the variable component of the remuneration, the payment of the same, having verified the achievement of the assigned objectives, occurs, in full in shares, according to the following scheme:
Below is the performance achieved by the CEO with reference to the 2019 objectives:
| Indicator | Performance | Performance (%) | |
|---|---|---|---|
| Adjusted Ebitda | | - | |
| GBV NPL Manged | | 94,94% | |
| Sustainabiliy objectives | Contracts signed other than Unicredit |
| 100% |
| KPI SLA | | 100% | |
| Strategic objectives | Operational excellence | | - |
| Share Performance | Share price and Debt to EBITDA multiple |
| 100% |
Based on the achieved performance, the variable component, granted entirely in shares, totals €3,000,000. The respective allocation is distributed over time, subject for 60% to a 5 year deferral, after checking the malus clauses. Both the upfront and deferred component are also subject to a retention period, respectively of 2 years and 1 year.
The individual contract between the CEO and doValue S.p.A. also regulates resignation, dismissal/revocation or early termination of the relationship, and provides for a severance payment in the case of early termination of the office or non-renewal, within the limits and taking account the regulatory provisions in that regard and the Company's Severance Policy.
Managers with Strategic Responsibilities and Personnel whose maximum limit of the variable component is equal to 200% of the fixed remuneration component (with the exception of the CEO) is assigned based on an MBO type incentive system with objectives aimed at incentivising Resources to achieve the Group's earning objectives, as part of the pursued development strategy and a sound and prudent risk management.
For Resources with maximum limit of 2:1 (total of 7 of which 4 DIRS), the possibility of achieving an incentive greater than 100% of fixed remuneration is conditioned to overperformance and subject to reaching the EBITDA objective greater than 100%.
The Group's EBITDA value at 31 December 2019 did not reach such target level and therefore the condition for paying the variable amount greater than fixed remuneration was not met.
A review of the individual MBO of the Resources with maximum incentive of 2:1 shows an average achievement of the performance level compared to the assigned individual targets equal to 86.26%, for the DIRS with the 2:1 ratio equal to 88.18%. The overall take out of Resources with maximum incentive of 2:1 totals €1.118.232,10 with an average take out of €223.646; for DIRS with 2:1 the total take out amounts to € 778.718,10 with an average take out of €259.572.
For Resources with the 2:1 ratio, in compliance with the requirements of the Policy, as later amendments made by the Board of Directors based on the delegation granted by the Shareholders' Meeting and for the maximum flexibility approved by the Board of Directors, payment is made 65% up-front and 35% deferred in 2.5 years and paid after verification of malus conditions.
The variable remuneration is paid 55% in cash, and the remaining 45% in doValue S.p.A. shares.
The component in shares, equal to 45% , is subject to a 1.5 year retention period for the up-front part and 1 year for the deferred amounts.
In terms of the other Managers with Strategic Responsibilities (3 resources), with a maximum variable incentive of of 1:1, a review of the individual MBO shows an average achievement of the performance level compared to the assigned individual targets equal to 113.43%. The overall take out totals €184,122, while the average equals €61,374.
For these Resources, in compliance with the requirements of the Policy, as later amendments made by the Board of Directors based on delegation granted by the Shareholders' Meeting and for the maximum flexibility approved by the Board of Directors, the variable remunerations is entirely paid in cash: 65% up-front and 35% deferred in 1 year and paid after verification of malus conditions.
No early terminations of DIRS occurred in 2019 thus no severance pay was paid out.
| (A) (B) |
1 | 4 | 5 | ||||
|---|---|---|---|---|---|---|---|
| MEMBERS OF THE BOARD OF DIRECTORS (name and surname) |
BOD | Nomination Committee |
Risks and Transactions with Related Parties Committee |
Remuneration Committee |
Fixed Compensation* | Total | Fair Value of equity compensation** |
| Giovanni Castellaneta 1 | C | M | M | ||||
| (I) Compensation in the company that prepares the financial statements |
|||||||
| (II) Compensation from subsidiaries and associates | 400.000 | 17.500 | 16.371 | 433.871 | 433.871 | ||
| (III) Total | 400.000 | 17.500 | 16.371 | 433.871 | 433.871 | ||
| Andrea Mangoni AD 2 | M | ||||||
| (I) Compensation in the company that prepares the | |||||||
| financial statements | 2.500.000 | 2.500.000 | 2.500.000 | 2.399.426 | |||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | 2.500.000 | 2.500.000 | 2.500.000 | 2.399.426 | |||
| Giovanni Lo Storto 3 | M | C | M | ||||
| (I) Compensation in the company that prepares the financial statements |
30.000 | 35.000 | 17.500 | 82.500 | 82.500 | ||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | 30.000 | 35.000 | 17.500 | 82.500 | 82.500 | ||
| Nunzio Guglielmino4 | M | M | C | ||||
| (I) Compensation in the company that prepares the | |||||||
| financial statements (II) Compensation from subsidiaries and associates |
30.000 | 17500 | 35.000 | 82.500 | 82.500 | ||
| (III) Total | 30.000 | 17500 | 35.000 | 82.500 | 82.500 | ||
| Emanuela Da Rin 5 | M | ||||||
| (I) Compensation in the company that prepares the financial statements |
30.000 | 30.000 | 30.000 | ||||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | 30.000 | 30.000 | 30.000 | ||||
| Giovanni B. Dagnino 6 | M | M | C | ||||
| (I) Compensation in the company that prepares the financial statements |
30.000 | 17.500 35000 | 82.500 | 82.500 | |||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | 30.000 | 17.500 | 35000 | 82.500 | 82.500 | ||
| Marella Idi Maria Villa 9 | M | ||||||
| (I) Compensation in the company that prepares the | |||||||
| financial statements | 31.014 | 31.014 | 31.014 | ||||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | 31.014 | 31.014 | 31.014 | ||||
| Giuseppe Ranieri 7 | M | ||||||
| (I) Compensation in the company that prepares the financial statements |
|||||||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | |||||||
| Francesco Colasanti 8 | M | M | |||||
| (I) Compensation in the company that prepares the financial statements |
|||||||
| (II) Compensation from subsidiaries and associates | |||||||
| (III) Total | |||||||
| TOTAL BOD COMPENSATION | 3.051.014 | 70.000 | 68.871 | 52.500 | 3.242.385 | 3.242.385 | 2.399.426 |
| P: CHAIRMAN M: MEMBER |
* Including compensation for participation in Board Committees. There are no attendance fees.
** The fair value of share compensation does not represent a value actually paid/obtained by the beneficiaries of Share Plans, since it is the cost that the Company reports - on an accrual basis and during the period of maturity - in consideration of the offer of incentives based on financial instruments.
Notes:
1_In office since 19/4/2018. Member of the Risk Committee since 25/1/2019.
2_Fixed compensation: €2,500,000 is governed by a collaboration agreement signed with the Company on 5 April 2016, (of which 60% paid in shares and subject to meeting certain conditions). The CEO waives compensation as director passed by the Shareholders' Meeting of 19/4/2018 totalling €30,000.
Andrea Mangoni holds the office of Chairman of a company of the doValue Group, Italfondiario S.p.A., with appointment of 3/3/2017.
3 In office since 19/4/2018. The compensation indicated in the table includes the office of Nomination Committee member
4 In office since 19/4/2018. The compensation indicated in the table includes the office of Remuneration Committee member
5 In office since 19/4/2018.
6 In office since 19/4/2018. The compensation indicated in the table includes the office of Risk Committee member.
7 In office since 19/4/2018. Waives compensation as Member of BoD.
8 In office since 19/4/2018. Waives compensation both as director and member of the Remuneration Committee.
9 In office since 25/1/2019
| Members of the Board of Statutory Auditors (name and surname) |
Office | Fixed Compensation* | Total | |
|---|---|---|---|---|
| Chiara Molon 1 | Chairman | |||
| (I) Compensation in the company that prepares the financial statements | 76.009 | 76.009 | ||
| (II) Compensation from subsidiaries and associates | ||||
| (III) Total | 76.009 | 76.009 | ||
| Francesco Marinao Bonifacio 2 | Statutory Auditor | |||
| (I) Compensation in the company that prepares the financial statements | 53.766 | 53.766 | ||
| (II) Compensation from subsidiaries and associates | 51.386 | 51.386 | ||
| (III) Total | 105.153 | 105.153 | ||
| Nicola Lorito | Statutory Auditor | |||
| (I) Compensation in the company that prepares the financial statements | 52.322 | 52.322 | ||
| (II) Compensation from subsidiaries and associates | 47.895 | 47.895 | ||
| (III) Total | 100.216 | 100.216 | ||
| TOTAL BOARD OF STATUTORY AUDITORS COMPENSATION | 281.378 | 281.378 |
P: CHAIRMAN M: MEMBER Notes:
1 In office since 19/4/2018. Holds the Office of Chairman of the Supervisory Body of doValue 231/01
2 In office since 19/4/2018. Also holds the office of member of the Supervisory Body 231/01 of doValue and Chairman of the Board of Statutory Auditors and Supervisory Body 231/01 of the subsidiary Italfondiario Spa.
3 In office since 19/4/2018 Also holds the office of member of the Supervisory Body 231/01 of doValue and Chairman of the Board of Statutory Auditors and Supervisory Body 23/01 of the subsidiary doSolutions
| Managers with strategic | Non-equity Variable Compensation |
Non | Other | Fair Value equity | Post-mandate or post |
||||
|---|---|---|---|---|---|---|---|---|---|
| responsibilities | Fixed Compensation | Bonuses and other |
monetary benefits |
compens ation |
Total | compensation* | employment benefits |
||
| incentives | Profit sharing | ||||||||
| 8 | |||||||||
| (HC) 1 | |||||||||
| (I) Compensation in the company that prepares the | |||||||||
| financial statements | 1.867.074 | 636.923 | 35.533 | 2.539.530 | 395.541 | ||||
| (II) Compensation from subsidiaries and associates | |||||||||
| (III) Total | |||||||||
| 1.867.074 | 636.923 | 35.533 | 2.539.530 | 395.541 |
* The fair value of share compensation does not represent a value actually
paid/obtained by the beneficiaries of Share Plans, since it is the cost that the
Company reports - on an accrual basis and during the period of maturity - in consideration of the offer of incentives based on financial instruments.
NOTES
1 The Managers with Strategic Responsibilities include a person who left on 30/6/2019.
Table 3A Incentive plans based on financial instruments, other than stock options, in favour of members of the management body, general managers and other managers with strategic responsibilities
| I D | Name and Surname | Office | Plan | Number and type of financial instruments |
Vesting Period | Number and type of financial instruments |
Fair Value on the assignment date |
Vesting Period | Assignment date | Market price at the assignment* | Number and type of financial instruments |
Number and type of financial instruments |
Value on the maturity date |
Fair Value |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Andrea Mangoni | Chief Executive Officer | |||||||||||||
| financial statements | (I) Compensation in the company that prepares the | 2019 Share Plan (Shareholders' Meeting of 17/4/2019) |
307.377 | € 3.000.000 | 5 | 10/04/2020 | € 9,76 | 122.951 | € 9,76 | € 1.200.000 | ||||
| 2018 Share Plan (Shareholders' Meeting of 19/4/2018) |
79.225 | € 11,47 | € 908.720 | |||||||||||
| IPO BONUS (Plan approved by the BoD of 09/06/2017) |
23.201 | € 12,53 | € 290.706 | |||||||||||
| (II) Compensation from subsidiaries and associates | ||||||||||||||
| (III) Totale | 307.377 | 3.000.000 | 225.377 | € 2.399.426 |
| Managers with Strategic Responsibilities 3 HC1 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (I) Compensation in the company that prepares the financial statements |
2019 Share Plan (Shareholders' Meeting of 17/4/2019) |
35.904 | 350.423 | 3 | 10/04/2020 | 9,76 | 23.338 | 9,76 | 227.775 | |
| 2018 Share Plan approved 19/4/2018 |
9.483 | € 11,47 | 108.766 | |||||||
| IPO BONUS related to the Plan approved 09/06/2017 |
4.710 | € 12,53 | € 59.000 | |||||||
| (II) Compensation from subsidiaries and associates | ||||||||||
| (III) Totale | ||||||||||
| 35.904 | 350.423 | 37.531 | 395.541 |
* the share price is registered on the MTA of Borsa Italiana in the 3 months prior to the grant date. For the 2018 Plan, the reporting period is from 12 December 2018 to 11 March 2019; the 2017 Incentive Plan from 19 December 2017 to 16 March 2018. ** Of the 7 Resources belonging to the Managers with Strategic Responsibilities, 4 are beneficiaries of the 2019 Share Plan. Following closing of the final performance balances of the accrual period, only 3 recipients had reached the required results.
Table 3b -Monetary incentive plans in favour of members of the management body, general managers and other managers with strategic responsibilities
| Name and Surname | Office | Plan | Bonus of year | Bonus of previous years | |||||
|---|---|---|---|---|---|---|---|---|---|
| (A) | (B) | C | (A) | (B) | C | Other Bonuses | |||
| Payable/paid | Deferred | Deferral period * No longer | payable | Payable/paid Still deferred | |||||
| Andrea Mangoni 1 | Chief Executive Officer | ||||||||
| 7 HC2 | Managers with Strategic | ||||||||
| Responsibilities | |||||||||
| (I) Compensation in the company that prepares the | Bonus System 2019 | ||||||||
| financial statements | 3 | € 411.541 | € 200.876 | 2,5 | |||||
| Bonus System 2018 Bonus System 2017 |
3,0 | € 152.576 | € 108.766 | ||||||
| 3,0 | € 72.807 | € 72.807 | |||||||
| (II) Compensation from subsidiaries and associates | |||||||||
| (III) Total | € 411.541 | € 200.876 | € 225.383 | € 181.573 |
Notes:
Notes:
1 The variable compensation of the CEO is paid exclusively in shares, of which 40% distributed at the end of the year of accrual and within 30 days from the date of approval of the financial statements of the previous year by the Shareholders' Meeting, and the remaining 60% deferred for a period of 5 years.
2The Manager with Strategic Responsibilities who left in 2019 will not be paid the variable sums, since his time on the job was not sufficient for payment.
3 The variable cash compensation of the Managers with Strategic Responsibilities is distributed for 65% up front at the end of the year of accrual, after approval of the financial statements of the previous year by the Shareholders' Meeting: the remaining 35% deferred in 2.5 years for personnel with a maximum variable compensation of 2:1 compared to fixed compensation, while the remaining DIRS with a maximum variable equal to 1:1 have a lower deferral period, equal to one year. *The deferral period indicated in the table is the maximum one for personnel with a maximum compensation of 2:1, the remaining personnel with maximum variable 1:1 has a one year deferral.
OUTLINE NO. 7-TER - Outline relating to the information on investments of members of the management and control bodies, general managers and other managers with strategic responsibilities
| Table 1 : Equity investments of members of the administration and control bodies and general directors | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Name and Surname | Office | No. of shares Equity held at investment 31/12/2018 |
No. of shares purchased in 2019* |
No. of shares sold in 2019 |
No of shares held at 31/12/2019 |
||||
| Andre Mangoni | Chief Executive Officer | doValue | 87.002 | 323.619 | 144.064 | 266.557 | |||
| - | |||||||||
| *Shares allocated based on incentive plans | |||||||||
| Table 2 : Equity investments of other managers with strategic responsibilities | |||||||||
| Name and Surname | Office | No. of shares held at 31/12/2018 |
No. of shares purchased in 2019* |
No. of shares sold in 2019 |
No of shares held at 31/12/2019 |
||||
| n.3 | Managers with Strategic Responsibilities doValue | 15.106 | 37.864 | 17.330 | 35.640 | ||||
| *Shares allocated based on incentive plans |
Report on the 2020 Remuneration Policy and remuneration paid in 2019 of doValue S.p.A.
The audit activity was aimed at assessing the compliance of the Group's remuneration practices with the 2019 Remuneration and Incentive Policies, by carrying out the following checks:
The checks conducted based upon the final data provided by Resources & Transformation have highlighted the correctness of final bonuses to sampled subjects and, overall, compliance with the proportion between the fixed and variable component, payment methods and deferral rules provided in the Policies.
In this context, areas for improvement of the internal controls system for the implementation of the remuneration policies were identified in relation to governance of the matter with reference to the structuring of the "MBO Bonus" incentive system. These results can be explained by the impacts on the definition process for individual charts resulting from the continuous evolution of strategic scenarios which strongly involved the Group in 2019.
The main areas for improvement identified are summarily indicated below:
In terms of the focus areas found Management has not defined a consistent plan of corrective actions reflected in the audit report issued on 7 April 2020.
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