Remuneration Information • Mar 13, 2017
Remuneration Information
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| Shareholders' Meeting | The Bank's ordinary shareholders' meeting |
|---|---|
| Shares | Ordinary shares of Banca IFIS, traded in the market regulated by the Italian Stock Exchange |
| Claw back | Contractual clause that requires recipients to return part of or all of the variable compensation upon the occurrence of certain circumstances |
| Recipients or Beneficiaries | Subjects for whom the payment of a variable compensation is foreseen in accordance with what has been defined in this document |
| Issuer or Bank or Parent Company |
Banca Ifis S.p.A. |
| The most Important Personnel | The Group's personnel whose professional activity has or may have a significant impact on the Bank's risk profile. |
| Vesting Period | The period between the time during which the right to participate in the Plan is assigned and the moment when this right reaches maturity |
| Retention Period | Period during which the sale of shares is prohibited |
| Malus | Mechanism that operates during the deferral period, before actual payment of the compensation, as a result of which the variable remuneration accrued can be reduced even falling to zero in relation to the dynamics of the results |
| Issuer's Regulations | It indicates the Consob Regulation No. 11971/99 and subsequent amendments and integrations |
| Report | Report on remuneration pursuant to Article 123-ter of the CFA |
| CFA (Consolidated Law on Financial Intermediation) |
It indicates the Legislative Decree No. 58 of February 24, 1998 |
| Up-front | Portion of variable remuneration that is paid without a deferral period |
In accordance with the provisions set forth in Articles 114 Bis of the Consolidated Law on Financial Intermediation (CLFI) and 84 Bis of the Issuer's Regulations and more specifically in accordance with the Scheme 7 of Annex 3A of the same concerning information that must be communicated to the market in relation to the attribution of compensation plans based on financial instruments, the Bank has prepared this document in order to provide comprehensive information concerning the valuation of a portion of the variable component of the compensation of the "most important personnel" of the Gruppo Banca IFIS S.p.A., in view of the new Shareholders' Meeting that has been convened in order to approve, among other things, a new incentive plan (2017 Plan) that is contingent upon the attainment of specific performance targets set for the 2017 financial year.
The 2017 Plan, submitted by the Remuneration Committee to the Board of Directors and approved by the Board of Directors on 2 March 2017, is subject to the approval of the ordinary Shareholders' Meeting convened on 21 April 2017.
This document furthermore contains an information section related to the implementation of the compensation plans based on the financial instruments that are currently in use (the "2014 Plan", "2015 Plan" and "2016 Plan").
1.1. The names of the beneficiaries who are members of the Board of Directors of the issuer of the financial instruments, of the issuer's controlling companies, and the companies, directly or indirectly controlled by the issuer.
The beneficiary of the 2017 Plan falling within the aforementioned categories is Mr. Giovanni Bossi in his capacity as Chief Executive Officer of the issuer.
There are no further beneficiaries of the 2017 Plan to be considered as such in function of their membership in the Boards of Directors of the subsidiary companies.
Additional potential beneficiaries of the 2017 Plan have been identified among the personnel who have significant impact on the risk profile of the Banca IFIS Group (so-called "most important personnel"). With reference to the conditions provided for in the 2017 plan, any additional potential beneficiaries of the 2017 plan are to be identified in the following categories:
The General Manager of the issuer, Mr. Alberto Staccione, is among the beneficiaries of the 2017 Plan.
b) other executive managers with strategic responsibilities of the financial instrument issuer that do not result as being a "smaller company", pursuant to Article 3, paragraph 1, let. f), of the Regulation No. 17221 of March 12, 2010, in the case in which they have received during the year total compensations (obtained by summing up the monetary compensations and those compensations based on the financial instruments) larger than the highest total compensation among those paid to members of the board or the Management Board, and to Manager Directors of the issuer of financial instruments
There are not subjects falling within this category among the beneficiaries of the 2017 Plan.
There are not subjects falling within this category among the beneficiaries of the 2017 Plan.
There are three additional potential beneficiaries of the 2017 Plan that fall within the category of directors with strategic responsibilities, other than the Managing Director already indicated in point 1.3:
Banca Ifis S.p.A. does not fall within the category of "smaller" companies.
c) of any other categories of employees or collaborators for whom different characteristics of the plan are envisaged (for example managers with executive functions, middle managers, employees etc.)
There are no further categories defined beyond those indicated above in point 1.2.
For detailed information regarding the reasons underlying the adoption of the 2017 Plan, please refer to the information contained in Section I of the Remuneration Report approved for the year 2017.
3.1. Scope of the powers and functions that the shareholders' meeting delegates to the board of directors for the implementation of the plan
Under the provisions of the company by-laws, the Ordinary Shareholders' Meeting is responsible for the approval of possible remuneration plans based on financial instruments, while the Board of Directors is responsible for the re-examination of such policies and responsibilities of correct implementation of the remuneration and incentive policies at least once a year.
The Human Resources and Administration areas have been entrusted, for those aspects within their competence, with administration and operational management of the 2017 Plan.
The Risk Management area, also in support of the Remuneration Committee, following approval of the financial statements by the Shareholders' meeting collaborates with the Administration for the determination of the amount of variable remuneration due to the Chief Executive Officer and Managing Director, as well as to additional potential beneficiaries of the plan, and for the verification of the conditions established for the assignment of the same.
3.3. Possible procedures in place to review the plans, also in relation to possible variations of the basic targets
No procedures are envisaged for the review of the 2017 Plan.
3.4. Description of the methods for the determination of the availability and assignment of the financial instruments on which the plans are based (for example: the granting of shares free of charge, share capital increases with the exclusion of pre-emptive rights, the purchase and sale of treasury shares)
The 2017 Plan envisages the assignment of a number of treasury shares held by the Parent Company.
The number of shares to be allocated is calculated by taking as the fair value the average share price in the stock exchange of the month preceding the determination of the variable remuneration that relates to the period, this allocation should be carried out by the date of the Shareholders' Meeting that approves the financial statements. The number of shares is determined by rounding to the nearest integer.
The shares can furthermore be assigned on the basis of the Long-Term Incentives described in the Report on Remuneration approved for 2017. In this case, the number of shares to be assigned will be calculated by taking the average of the month's stock price as the fair value of the share prior to determining the long-term incentive; the latter will be made effective as of the date of the Shareholder's Meeting to approve the balance at the end of the accrual period of reference (for 2017-2019). The number of shares is determined by rounding to the nearest integer.
The Board of Directors, in identifying the characteristics of the 2017 Plan, was advised by the Remuneration Committee, made up of three non-executive Directors, the majority of whom are independent. Based on the current remuneration and incentive policies, it being envisaged that the remuneration of the non-executive Directors shall not be linked to the economic results attained by the Bank and that the same shall not be beneficiaries of share-based incentive plans, no situations of conflict of interest arose as regards the concerned Directors. These situations are moreover excluded in accordance with the internal rules and regulations of the Remuneration Committee, in which it is foreseen that no Director may take part in Committee meetings in which proposals submitted to the Board of Directors regarding their own remuneration are formulated.
On the date of 1 March 2017, the Remuneration Committee expressed its favourable opinion in the Report on Remunerations pursuant to Art. 123 ter of the Consolidated Financial Act as well as this document. Both documents were approved by the Board of Directors on the date of 2 March 2017 in order to propose approval of the plan during the Shareholder's Meeting on 21 April 2017.
put forward to the aforementioned body that were formulated by any remuneration committee
For details on information requested, see Chapter 5 and the attached Table 1.
3.8. Market price, recorded on the aforementioned dates for the financial instruments on which the plans are based, if traded on regulated markets
For details on information requested, see Chapter 5 and the attached Table 1.
3.9. In the case of plans based on financial instruments traded on regulated markets, the terms in which and the methods according to which the issuer takes into account, when determining the timeframe for granting the instruments for implementing the plan, of a possible timing coincidence with:
i) the aforementioned grant and any decisions taken with regard to the matter by the remuneration committee; and
ii) the communication of any relevant information as per Art. 114, Paragraph 1; for example, should such information:
a. not already be in the public domain and likely to have a positive impact on the market price, or
b. be already in the public domain and likely to have a negative impact on the market price
The timing of allocation of the shares is established within the context of the Remuneration and Incentive Policies deliberated annually in advance and being neutral as regards possible events that could affect the market value of the Parent Company's shares. During the implementation of the 2017 Plan, information will be given to the market, where provided for by laws and regulations in force from time to time.
4.1. Description of the forms in which the financial instrument-based compensation plans are structured
The 2017 Plan is based on the assignment of the Parent Company's own shares.
The actual implementation period of the 2017 Plan shall start in 2018 (this being the period in which the results of the 2017 financial year are recorded) and conclude in 2020 (latest period of assignment). The deferred component is subject to a retention period of one additional year.
The 2017 Plan, linked to the results for the period between 1st January 2017 and 31st December 2017, will end during the financial year 2021 with the end of the retention period provided for by the deferred variable component.
4.4. Maximum number of financial instruments also in the form of Options, allocated in each fiscal year in relation to the persons individually identified or to the categories specified
At the moment, it is not possible to indicate the number of shares that will be assigned on the basis of the 2017 Plan, in as much as their precise identification is contingent upon the attainment of the individual performance targets and connected to the trend of the stock market price. This information shall be provided in the times and ways provided for by current legislation.
Activation of the 2017 plan is dependent upon the following access (gate) conditions:
The lack of any one of these parameters will prevent payment of the variable component.
The variable component is furthermore recognised under the condition that the beneficiary be currently employed by the Group and not on notice for voluntary dismissal or termination; an exception to this would be for pension or solidarity contributions. Payment of the variable component would also be prevented in the case of disciplinary proceedings in course for fraudulent behaviour or gross negligence resulting in damage to the Bank, or behaviour that may result in rightful termination of the subject.
It is, in any case, specified that, in accordance with usual best market practice, the rules for deferment and partial payment in treasury shares of the Bank are applied if the variable remuneration is equal to or greater than 70,000 Euros.
Except in the aforementioned case, the potential beneficiaries of the cited 2017 plan, with the exception of the Chief Executive Officer and the General Manager, are furthermore subject to assessment on the fulfilment of assigned goals, as described in detail in the Remuneration Report approved for 2017 related to assigned goals for the year as well as for the Long-Term Incentive plans.
The effective assignment of the instruments, with reference to the deferred variable component, is furthermore subject to malus mechanisms that go toward reducing, or even writing off, the previously determined amount ex post, according to the criteria presented in the following table:
1 Elements that derive from extraordinary functions are not considered in the calculations, such as: increases in capital, business mergers, de-mergers, acquisitions or any other non-recurrent operation on which the Board of Directors must deliberate and which are eligible for modifying the value of the indicator
| Group Total Own Funds Ratio 2 |
||||||||
|---|---|---|---|---|---|---|---|---|
| <10.7% | 10.7%< <11.5% | 11.5%< 12.5% | >12.5% | |||||
| Group | ≥ 15% | -100.0% | --- | --- | --- | |||
| RORAC | 10.5%< < 15% -100.0% | -30.0% | -20.0% | -10.0% | ||||
| < 10.7% | -100.0% | -40.0% | -30.0% | -20.0% |
Furthermore, the deferred variable component will be written off if the subject has caused or contributed to causing:
or, moreover, if:
the Shareholder's Meeting has deliberated upon revoking the assignment for just cause, or the Board of Directors has deliberated upon the termination of the work contract for just cause.
The aforementioned criteria occurred in each of the three financial years3, which were closed on determination of the variable component (accrual period) applicable to the occurrence of the conditions illustrated above, taking into account the least positive result recorded in the period in question.
The Group furthermore reserves the right to use whatever means it deems opportune for the restitution of the variable component recognised and/or paid to the most important personnel who have exceeded the materiality level in the case that the subject has caused or contributed to cause:
Or in the case that the Group Total Own Funds Ratio is inferior to the capital requirements (Overall Capital Requirement) disclosed by the Monitoring Body for "decisions on capital" at the conclusion of the regular Supervisory Review and Evaluation Process (SREP).
2 EU Regulation n. 575/2013 (CRR) and Directive 2013/36/EU (CRD IV)
3 A sufficient condition for the application of corrective mechanisms is the occurence of indicated conditions, in at least one of the three years in question (accrual period).
These criteria have occurred in each of the three financial years (accrual period), which have been closed after having determined the variable component applicable to the occurrence of the conditions illustrated above.
In consideration of the fact that provision is never made for the payment of a significant variable component, as this is considered to be variable remuneration which is higher than the fixed remuneration, the percentage of the variable component to be deferred is set at 40% for a period of 3 years.
Up-front variable remuneration is calculated following approval of the financial statements for the year ended on 31 December of the previous year. 50% of that will be paid in shares of the Parent Company at the end of the maintenance period (retention period) of three years to which shares are subjected, in line with the strategic planning horizon.
The variable remuneration subject to temporary deferral (vesting period) is calculated following approval of the financial statements for the year ended on 31 December of the previous year and will be paid upon elapse of the three-year deferral period following approval of the financial statements for the reference year. 50% of the variable remuneration subject to temporary deferral will be paid in shares of the Parent Company at the end of the retention period of one year to which they are subjected. The remaining share of the variable remuneration subject to temporary deferral is annually reassessed at the statutory rate from time to time in force.
The number of shares to be allocated is calculated by taking the average share price in the stock exchange of the month preceding the determination of the variable date that relates to the period as the fair value, this allocation should be carried out by the date of the Shareholders' Meeting that approves the financial statements. The number of shares is determined by rounding to the nearest integer.
4.7. The description of possible termination clauses applicable to the Plan and in the event that the beneficiaries carry out any hedging transactions that allow them to neutralise any prohibitions on the sale of the financial instruments assigned, also in the form of options, or of the financial instruments received after the exercise of such options.
The 2017 Plan does not envisage termination conditions of the type described above.
The variable component is recognised under the condition that the beneficiary be currently employed by the Group and not on notice for voluntary dismissal or termination; an exception to this would be for pension or solidarity contributions. Payment of the variable component would also be prevented in the case that the Shareholders' Meeting has resolved upon the revocation of the office of the Managing Director for just cause, or that the the Board of Directors has resolved upon the termination of the employment contract for just cause.
There are no additional annulment clauses of the 2017 Plan beyond those already illustrated in the preceding paragraphs.
4.10. The justification for any provision for the company's redemption of the financial instruments in the plans envisaged under Article 2357 et seq. of the Italian Civil Code; the beneficiaries of the redemption should specify whether the provision is only intended for special categories of employees; the effects of termination of employment on this same redemption.
For those shares concerned by the 2017 Plan the bank does not foresee any redemption.
For those shares that are concerned by the 2017 Plan, no granting of loans or other facilities are foreseen pursuant to Art. 2358 of the Italian Civil Code.
4.12. Assessments of the expected costs for the company on the date of the related assignment , as determinable on the basis of terms and conditions that have already been defined, by total amount and with regards to each instrument in the plan.
It is currently not possible to quantify exactly the expected cost because its determination is contingent upon the occurrence of the conditions and upon the attainment of the identified performance targets.
Given that the payment of the equity component of the variable remuneration is accomplished through the use of the Bank's own treasury shares, these will not entail any significant dilution effects on the Bank's capital.
The conferring of ownership of shares and the full availability of the same takes place on conclusion of the retention period, save for cases of application of aforementioned malus and claw back mechanisms cited and detailed in the Report on remuneration approved for 2017.
These conditions do not apply in as much as Banca IFIS S.p.A. shares are traded in regulated markets.
In relation to the 2014 Plan, approved by the Board of Directors on the date of March 17, 2014 and by the Ordinary Shareholders' Meeting on April 17, 2014, the Bank prepared a document in order to provide complete information about the valuation of a portion of the variable component of the remuneration by the "most important personnel" of Banca IFIS S.p.A. through an assignment program of ordinary Banca IFIS shares. This document is available on the company website www.bancaifis.it in the "Corporate Governance" section, "Shareholders meeting" of the year 2014.
After the approval of the financial statements, during which the fulfilment of the conditions for the allocation of the variable remuneration occurred, the beneficiaries (CEO and General Manager) of the Plan were identified for whom the Company has registered an overall cost of € 834,146.00 of which: (i) € 166,823.82 before taxes, equal to a total of 8,592 shares, as an up front variable compensation; (ii) € 250,243.80 before taxes in shares to be determined in accordance with the provisions of the reference Plan.
The up-front variable remuneration was paid by means of actions with a retention period of two years. Over the course of 2016 it was verified that the conditions for possible complete recovery of the up front (claw back) variable compensation were not present.
In relation to the 2015 Plan, approved by the Board of Directors on the date February 18, 2015 and by the Ordinary Shareholders' Meeting on April 2, 2015, the Bank prepared a document in order to provide complete information about the valuation of a portion of the variable component of the remuneration by the "most important personnel" of Banca IFIS S.p.A. through an assignment programme of ordinary Banca IFIS shares. This document is available on the company website www.bancaifis.it in the "Corporate Governance" section, "Shareholders meeting" of the year 2015.
After the approval of the financial statements, during which the fulfilment of the conditions for the allocation of the variable remuneration occurred, the beneficiaries (CEO and General Manager) of the Plan were identified for whom the Company has registered an overall cost of € 834,146.00 of which: (i) € 250,233.49 before taxes, equal to a total of 9,295 shares, as an up front variable compensation; (ii) € 166,829.20 before taxes in shares to be determined in accordance with the provisions of the reference Plan.
The up-front variable remuneration was paid by means of actions with a retention period of three years. The possible complete recovery of the up front (claw back) variable compensation will be verified over the course of the first six-month period of 2017.
In relation to the 2015 Plan, approved by the Board of Directors on the date February 2, 2016 and by the Ordinary Shareholders' Meeting on March 22, 2016, the Bank prepared a document in order to provide complete information about the valuation of a portion of the variable component of the remuneration by the "most important personnel" of Banca IFIS S.p.A. through an assignment programme of ordinary Banca IFIS shares. This document is available on the company website www.bancaifis.it in the "Corporate Governance" section, "Shareholders meeting" of the year 2016.
It should be noted that, as of the date of this document's preparation, the official elements are not as yet available, which are necessary for verifying the conditions for the distribution of the variable component of remuneration related to the 2016 Plan, these shall be disclosed following the approval of the financial statements by the Ordinary Shareholders' Meeting. The information about the status of implementation of the 2016 Plan will, therefore, be provided in the times and methods provided for by current law.
| Na d s me an urn am e o r teg ca ory |
Ap oin t ( be tm to p en ind ica ted ly for th on os e s l ist ed by ) p ers on na me |
CL AS SIF ICA TIO N 1 |
||||||
|---|---|---|---|---|---|---|---|---|
| Fin cia l in oth tha k o tio ( 8 ) str ts toc an um en er n s p ns |
||||||||
| Se Sh cti 1 Ins tru nts lat ing to lan ntl ali d, ed th e b is of iou ho lde rs' M tin olu tio on me re p s, cu rre y v ap p rov on as p rev s are ee g res ns |
||||||||
| Da of te Sh ho lde rs' are de cis ion |
Ty of p es fin cia l an ins tru nts me ( 12 ) |
Nu mb of er fin cia l an ins tru nts me |
All ati oc on ( ) da te 10 |
Po ibl e i tru nt ss ns me rch ric pu as e p e |
Ma rke ric t p e u p on all ati oc on |
Ve sti ng eri od p ( ) 14 |
||
| ( 2) Gio i B si va nn os |
CE O |
17/ 04 /20 14 |
IS Sh Ba IF nca are s |
66 95 |
04 /05 /20 15 |
19 41 61 8 , |
18 28 64 , |
- |
| 17/ 04 /20 14 |
IS Sh Ba IF nca are s |
* 1 06 64 |
04 /05 /20 15 |
19 41 61 8 , |
18 28 64 , |
3 | ||
| No tes |
||||||||
| ( 3 ) Alb Sta ion ert o cc e |
Ge ral M ne an ag er |
17/ 04 /20 14 |
IS Sh Ba IF nca are s |
189 7 |
04 /05 /20 15 |
19 41 61 8 , |
18 28 64 , |
- |
| 17/ 04 /20 14 |
IS Sh Ba IF nca are s |
* 3 02 1 |
04 /05 /20 15 |
19 41 61 8 , |
18 28 64 , |
3 | ||
| No tes |
||||||||
| ( 4) Gio i B si va nn os |
CE O |
08 /04 /20 15 |
IS Sh Ba IF nca are s |
72 43 |
22 /03 /20 16 |
26 92 13 , |
28 78 , |
|
| 08 /04 /20 15 |
IS Sh Ba IF nca are s |
* 4 51 7 |
22 /03 /20 16 |
26 92 13 , |
28 78 , |
3 | ||
| No tes |
||||||||
| ( 5 ) Alb Sta ion ert o cc e |
Ge ral M ne an ag er |
08 /04 /20 15 |
IS Sh Ba IF nca are s |
20 52 |
22 /03 /20 16 |
26 92 13 , |
28 78 , |
|
| 08 /04 /20 15 |
IS Sh Ba IF nca are s |
* 1 28 0 |
22 /03 /20 16 |
26 92 13 , |
28 78 , |
3 | ||
| No tes |
||||||||
| ( 4) Gio i B si va nn os |
CE O |
22 /03 /20 16 |
IS Sh Ba IF nca are s |
** | ||||
| 22 /03 /20 16 |
IS Sh Ba IF nca are s |
** | ||||||
| No tes |
||||||||
| ( ) Sta 5 Alb ert ion o cc e |
Ge ral M ne an ag er |
/03 /20 22 16 |
IS Sh Ba IF nca are s |
** | ||||
| 22 /03 /20 16 |
IS Sh Ba IF nca are s |
** | ||||||
| No tes |
||||||||
| ( 6) |
||||||||
| No tes |
||||||||
| ( 7) |
||||||||
| No tes |
(*) The number of shares is calculated at market price on the allocation date. This number will be recalculated at the moment of payment.
(**) The data of assignable shares with reference to the incentive attributed regarding the year 2016 results will be available following the resolutions of the Ordinary Shareholders' Meeting convened on 21/04/2017
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