Remuneration Information • Mar 15, 2019
Remuneration Information
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pursuant to Article 123-ter of Legislative Decree no. 58 of February 1998 (Italian Consolidated Financial Law - TUF) and pursuant to Article 84-quater of CONSOB Resolution no. 111971 of 14 May 1999 ("Issuers' Regulation") Approved by the Board of Directors on 25th Febbraio 2019
pursuant to Article 123-ter of Legislative Decree no. 58 of February 1998 (Italian Consolidated Financial Law - TUF) and pursuant to Article 84 - quater of CONSOB no. 111971 of 14 May 1999 ("Issuers Regulation") Approved by the Board of Directors on 25th February 2019
| 1. Remuneration Policy of the members | ||
|---|---|---|
| of the Board of Directors, the General Managers | ||
| and the Executives with | ||
| Strategic Responsibilities | 10 | |
| 1.1. Procedures for adopting and | ||
| implementing the Remuneration Policy | 10 | |
| 1.1.1. Bodies and parties involved in | ||
| preparing, approving and implementing | ||
| the Policy | 10 | |
| 1.2. Remuneration Committee: | ||
| composition, method of functioning, | ||
| duties and activities performed | 11 | |
| 1.3. Independent experts involved in | ||
| preparing the Remuneration Policy | ||
| and information on using, as reference, | ||
| the remuneration policies of other | ||
| companies | 13 | |
| 2. Characteristics of the Remuneration | ||
| Policy | 13 | |
| 2.1. Goals pursued by the Remuneration | ||
| Policy, basic principles and changes | ||
| with respect to the policy adopted | ||
| for the 2018 fi nancial year | 13 | |
| 2.2. Signifi cant amendments to the | ||
| Remuneration Policy in the 2019 | ||
fi nancial year compared to 2018 15
SECTION II 26
and Key Executives/Executives with Strategic
Responsibilities in the
fi nancial year 2018 34
| Remuneration received in the fi nancial year 2018 by the members of the Board of Directors and Board of Statutory Auditors, the General Manager, as well as Key Executives/ Executives with Strategic Responsibilities |
26 | Table on monetary incentive plans for the Chairman, the Chief Executive Offi cer, the General Manager and Key Executives/Executives with Strategic Responsibilities |
36 |
|---|---|---|---|
| First Part | SECTION III | 37 | |
| Items making up the remuneration | 26 | Information on the shareholding of | |
| 1. Board of Directors 1.1. The Chairman of the Board of Directors 26 1.2. Chief Executive Offi cer 1.3. Other members of the Board of |
26 27 |
members of the Board of Directors, of the Board of Statutory Auditors, the General Manager and Executives with Strategic Responsibilities |
37 |
| Directors | 28 | TABLE 3A | 38 |
| 1.4. Members of the Board of Directors' internal committees 2. Board of Statutory Auditors 3. General Management Department 4. Key Executives/Executives with Strategic Responsibilities 5. Agreements for payment of indemnities in the event of early termination of employment |
30 30 30 31 32 |
Incentive plans based on fi nancial instruments, other than stock options, for members of the Board of Directors, the General Manager and other Executives with Strategic Responsibilities |
38 |
| Second Part | |||
| TABLE 1 | 34 | ||
| Table on remunerations paid to members of the Board of Directors and the Board of Statutory Auditors, the General Manager, |
| 2.3. Remuneration structure: fi xed | |
|---|---|
| components and variable components; | |
| performance objectives based on which | |
| variable components are assigned, and | |
| information on the connection between | |
| changes in performances and changes in | |
| remuneration | 15 |
| 2.3.1. Fixed component | 18 |
| 2.3.2. Variable component | 18 |
| 2.3.3. Non-monetary benefi ts | 24 |
| 2.3.4. Criteria used for evaluation of | |
| performance targets at the basis of | |
| the assignment of variable salary | |
| components and information aimed | |
| at highlighting the coherence of the | |
| Remuneration Policy with the pursuit | |
| of the Company's long-term interests | |
| and risk management policy | 24 |
| 2.3.5. Deferred payment systems, | |
| with indication of the deferment | |
| periods and criteria used for | |
| determination of those periods and | |
| ex post correction mechanisms | 24 |
| 2.3.6. Policy relating to salary | |
| packages in the event of the end | |
| of term of offi ce or termination | |
| of employment | 25 |
| 2.3.7. Information on insurance, | |
| social security or pension coverage, | |
| other than those that are mandatory | 25 |
| 2.3.8. Remuneration Policy followed | |
| regarding: (i) the independent Directors, | |
| (ii) participation in Committees and | |
| (iii) performing specifi c assignments | 25 |
On 22 January 2019, the Board of Directors resolved to appoint a second General Manager who will assist the General Manager appointed earlier on 26 September 2016.
2 The Key Executives who are also identifi ed as Executives with Strategic Responsibilities pursuant to Annex 1 of CONSOB Regulation No. 17221 of 12 March 2010, are shown in bold. 3 Until 21 January 2019.
Members of the Board of Directors.
The Directors vested with particular duties by the Board of Directors, specifi cally the Chairman and Chief Executive Offi cer.
Contractual agreements that permit the Company to request restitution, in whole or in part, of variable components of remuneration paid (or to retain sums that are the subject of deferment) that were calculated based on information that is later revealed to be manifestly erroneous or false, or in cases of fraud or wilfully wrongful or negligent conduct to the detriment of the Company, on the condition that the satisfaction of the above requirements is verifi ed based on information ascertained by proven methods by the competent corporate Departments within three years from payment of the cash incentive (or from the allocation of the incentive that was covered by the deferment).
The Corporate Governance Code for listed companies promoted by the Corporate Governance Committee established by Borsa Italiana S.p.A., ABI, Ania, Assonime, Confi ndustria and Assogestioni.
The Remuneration Committee set up by the Fincantieri Board of Directors under the Code.
Fincantieri's Board of Directors.
The General Managers of Fincantieri.
The ratio between EBITDA and the Group revenue in the reference period.
FTSE Italia All Share index, the value of which is published daily by Borsa Italiana, adjusted by excluding companies mainly off ering banking, asset management or insurance services.
FINCANTIERI S.p.A.
Fincantieri and the Companies controlled by the same under Article 93 of the Italian Consolidated Law on Finance (TUF).
The means to measure the achievement of the sustainability objectives that the Company has determined combined and/or set in addition to those of the economic and fi nancial performance, in order to align itself with the European best practices and the expectations of the fi nancial community in terms of sustainable development.
Management by Objectives, i.e., the short term variable component of remuneration consisting of an annual bonus in cash to be paid on the basis of the achievement of fi xed annual objectives.
Standard level of achieving the objective that entitles one to obtain 100% of the incentive (without prejudice to other multipliers or discretionary parameters).
Panel of companies listed on the international stock exchanges and indicated as a reference parameter in the Information Document on the LTI Plans.
The following executives of Fincantieri, who hold organisational positions of signifi cant impact with regard to achieving the company's objectives:
"Those parties who have the power and the responsibility, whether directly or indirectly, for the planning, management and control of the Company's activities, including Directors (executive or otherwise) of the Company".
Profi t gross of taxable interest, taxes, depreciation and amortisation on tangible and intangible assets.
The medium-long term variable incentive scheme that provides for the free allocation to benefi ciaries of rights to acquire a pre-set quota of Fincantieri's ordinary shares with no par value, upon achieving specifi c performance objectives, approved by the Shareholders' Meeting on 19 May 2017.
The medium-long term variable incentive scheme that provides for the free allocation to benefi ciaries of rights to acquire a pre-set quota of Fincantieri's ordinary shares with no par value, upon achieving specifi c performance objectives, approved by the Shareholders' Meeting on 11 May 2018.
Collectively, the 2016-2018 Performance Share Plan and the 2019-2021 Performance Share Plan.
The Remuneration Policy approved by the Board of Directors as described at Section I of this Report.
The Remuneration Committee Regulations.
The Regulations issued by Consob with Resolution No. 11971 of 14 May 1999 on Issuers, as amended.
This Remuneration Report, prepared pursuant to Article 123-ter of the Italian Consolidated Law on Finance (TUF).
Company FINCANTIERI S.p.A.
The return for an investor that is calculated considering both the variations in the price of the share during a given period, and the dividends distributed in the same period, assuming that such dividends are immediately reinvested in the same Company's shares.
Legislative Decree No. 58 of 24 February 1998 (as amended), containing the "Consolidated text of the provisions on the subject of fi nancial intermediation".
The Remuneration Report that we submit to you illustrates Fincantieri's Remuneration Policy for the 2019 fi nancial year and the remunerations paid to Directors, Statutory Auditors, the General Manager, Executives with Strategic Responsibilities and Key Executives of the Company in the 2018 fi nancial year. This document laid down in line with the governance model adopted by the Company, with the recommendations of the Corporate Governance Code, as well as with the best practices that normally apply, was approved by the Board of Directors on 25 February 2019 on the Remuneration Committee's proposal.
The aim of Fincantieri's Remuneration Policy is to attract, motivate and retain the most adequate resources to successfully manage the Company, favouring retention capacity, encouraging the achievement of strategic objectives in order to align top management interests with the primary objective of creating sustainable value for the shareholders over the medium-long term.
In this regard, in the three fi nancial years throughout which the policy was in force, the Remuneration Committee, with the expert contribution of the Company's Human Resources and Industrial Relations Department, seamlessly and consistently advocated a Remuneration Policy for the Company organised along three important lines:
Regarding the fi rst point, the Company, in line with best market practices and starting in 2016, has pursued the goal of increasingly favouring the variable remuneration component of its management compared to the fi xed component by eff ectively combining the STI (Short Term Incentives) Plan and the LTI (Long Term Incentives) Plan, consistent with Group's performance trends and with shareholder returns. In accordance with the provisions of the Corporate Governance Code, as well as the best practices for listed companies, on 10 November 2016, Fincantieri approved a medium-long term Incentive Plan (2016-2018 Performance Share) hinging on Fincantieri's shares, intended for its management, which had recorded a more consistent pay-mix balance from the start .In keeping with the abovementioned 2016- 2018 LTI Plan, the Shareholders' Meeting held on 11 May 2018 approved a new medium-long term incentive Plan (2019-2021 Performance Share Plan).
The new LTI Plan, in keeping with the previous plan, pursues the following objectives:
• improving the alignment of the benefi ciaries' interests with those of the shareholders, connecting management remuneration to specifi c performance objectives spread over multiple years, the
achievement of which is closely tied to improving the Company's performance and increasing its value over the long term;
The 2019-2021 Plan, in line with the above, provides for a vesting period, a lock-up period and the application of claw-back clauses.
As for the remuneration components, in view of the evidence derived from updating the assessment as to weighing managerial positions and the related benchmark with the relevant market, conducted in the fi rst half of 2017, the Company continued in 2018, in keeping with the previous fi nancial year, to implement the plan to adjust remuneration arrangements for Key Executives, as well as for other managers, so that these are accurately positioned in the relevant market. Implementing the actions proposed by the Company has thus allowed to register a signifi cant increase (from 18% noted in 2017 to 62% today) in the number of Key Executives receiving remunerations that are around the market median. Finally, in view of the increasing expectations of the fi nancial community on sustainable development, and in line with the Sustainability Plan approved in December 2018, Fincantieri not only introduced the already consolidated economic and fi nancial performance objectives (EBITDA) tied to share performance (Total Shareholder Return) to the abovementioned 2019-2021 LTI Plan, but also a Sustainability objective allowing individuals to focus their awareness and eff orts on strategic objectives, even if not strictly economic. Furthermore, Fincantieri has also confi rmed its awareness and eff ort towards these topics by including certain objectives in the short term reward system (MBO Plan) tied to sustainability, including those on quality, safety, respect for the environment and anti-corruption. Esteemed Shareholders, given the above, the Remuneration Policy that we submit for your approval confi rms the following distinctive elements; the pursuit of a balanced pay mix in relation to the management remuneration package, and the variable component's connection to clear, pre-set and measurable performance objectives, also in terms of sustainability, in line with the market's best practices on remuneration. Accordingly, we believe that the Remuneration Policy is consistent with its pursued purposes, namely attracting, retaining and adequately remunerating the Company's key resources, so as to ensure the creation of value for the shareholders over the medium-long term. We take this opportunity to thank you in advance for the support that you are called upon to express at this time.
Giampiero Massolo THE CHAIRMAN OF THE BOARD DIRECTORS
Paola Muratorio THE CHAIRMAN OF THE REMUNERATION COMMITTEE
This Report, prepared in compliance with the laws currently in force and the Corporate Governance Code and taking account of the recent recommendations of the Italian Committee for Corporate Governance on the topic of remuneration4, was approved by the Board of Directors' Meeting of 25 February 2019 on a proposal by the Remuneration Committee.
In compliance with the provisions of Article 123–ter of the Italian Consolidated Law on Finance, this Report is divided into two sections:
• the fi rst section illustrates the Policy adopted by Fincantieri on the remuneration of the members of the Board of Directors, the General Managers, the Executives with Strategic Responsibilities and other Key Executives with reference to the 2019 fi nancial year, and until the approval of a new Remuneration Policy; in accordance with the provisions of Article 123-ter of the Italian Consolidated Law on Finance, this section is subject to the advisory vote of the Shareholders' Meeting called to approve the fi nancial statements as of 31 December 2018; • the second section provides detailed information on the remuneration payable to the aforementioned subjects and the statutory auditors for the 2018 fi nancial year.
This Report is made available to the public at Fincantieri company headquarters ( 1, Via Genova – in Trieste) and on the Company's website (www.fi ncantieri.com), and on the authorised storage platform called eMarket STORAGE ().
The verifi cation of the level of achievement of the quantitative and qualitative performance objectives, and the consequent determination of the sums of money due to the individuals concerned, shall be performed after the approval of the fi nancial statements, following verifi cation by the Chief Executive Offi cer.
The composition, appointment, duties and operating procedures of the Remuneration Committee are governed by special Regulations approved by the Board of Directors.
In line with the provisions of these Regulations, the Committee is composed of three nonexecutive Directors, the majority of whom are independent, namely the Directors Paola Muratorio (independent) with the offi ce of Chairman, Donatella Treu (independent) and Fabrizio Palermo, appointed by the Board of Directors on 8 June 2016 following the renewal of the entire Board by the Shareholders'
Meeting held on 19 May 2016. All members possess adequate knowledge and experience in fi nance or Remuneration Policy matters.
In accordance with its Regulations, the Remuneration Committee meets periodically with the frequency necessary to perform its tasks. Meetings are called by the Committee Chairman, or when a request is made by at least two of its members, to discuss specifi c matters that are considered particularly relevant. The Committee is quorate when the majority of the members in offi ce are present and decide by absolute majority vote of those in attendance. In the event of a tie, the Chairman of the Committee holds the deciding vote. The following individuals may also attend the Committee meetings: Chairman of the Board of Directors, Chief Executive Offi cer and Chairman of the Board of Statutory Auditors
1.1. Procedures for adopting and implementing the Remuneration Policy
1.1.1. Bodies and parties involved in preparing, approving and implementing the Policy
Fincantieri's Remuneration Policy is approved annually by the Board of Directors on the Remuneration Committee's proposal. This Policy's purpose is to: (i) attract, motivate and retain the most suitable resources to successfully manage the company; (ii) stimulate the achievement of strategic objectives; (iii) align the interests of top management with the primary objective of the creation of sustainable shareholder value in the medium-long term; and (iv) promote the Company's mission and its corporate values.
The corporate board responsible for the correct implementation of the Remuneration Policy is the Board of Directors, being supported by the Remuneration Committee, which provides proposals and consultancy on the matter and that periodically evaluates the adequacy, overall consistency and the actual implementation of the Remuneration Policy of the parties concerned in compliance with the recommendations of the Corporate Governance Code and the provisions of the Remuneration Committee's Regulations. The management of the Remuneration Policy of the General Managers, Executives with Strategic Responsibilities and other Key Executives is entrusted to the Chief Executive Offi cer who, with the assistance of the Human Resources and Industrial Relations Directorate of the Company, constantly monitors the adequacy, overall consistency, and the actual implementation of the Policy itself.
(or any other standing auditor appointed by them). Other standing auditors, however, may also attend the meetings and, upon invitation of the Committee itself, other parties as well may attend, including other Board members or top management of the Company, to provide information and express evaluations on matters falling within their remits with reference to the individual items on the agenda of the meetings. More specifi cally, as a general rule, the SVP of the Human Resources and Industrial Relations Directorate should attend. No Director shall take part in Committee meetings where proposals are submitted to the Board of Directors concerning their own remuneration. In accordance with the Corporate Governance Code and its own Regulations, the Remuneration Committee carries out the following advisory duties and makes the following proposals in relation to remuneration:
• submits proposals to the Board of Directors on the Remuneration Policy of Directors, Executives with Strategic Responsibilities and Key Executives, using, with respect to those executives, the information provided by the Chief Executive Offi cer, which may refer to market practices on Remuneration Policies; • periodically assesses the adequacy, overall consistency and due application of the adopted Policy;
• submits proposals and expresses opinions to the Board of Directors on the remuneration of executive directors and other directors who hold particular positions, as well as on setting performance objectives related to the variable component of such remuneration;
• monitors the application of the decisions taken by the Board on matters on which it has submitted proposals and expressed opinions, in particular the evaluation of the actual achievement of the performance objectives.
In carrying out these functions and for the purposes of performing its duties, the
4 Letter of the Chairman of the Italian Committee for Corporate Governance and the Chairmen of the governing bodies of listed Italian companies dated 21 December 2018.
Committee shall prepare and submit to the Board of Directors proposals for medium-long term incentive schemes for top management, including any share-based compensation plans, and is in charge of monitoring their application. Among its functions, it also reports to the Shareholders' Meeting called to approve the fi nancial statements for the relevant year, either through the Committee Chairman or another designated member. The Committee is also in charge of the duties concerning Related Party Transactions in the case of resolutions concerning remuneration.
In the performance of its duties, the Committee shall ensure suitable functional and operational communications with the competent corporate departments.
The Committee: (i) may access information and is assisted by the corporate departments necessary to perform its duties; (ii) in order to fulfi l its duties, it may access, through the structures of the Company, external consultants, provided that they are adequately bound to the necessary confi dentiality; and (iii) if it considers it necessary, it may prepare an annual budget for its own tasks to be proposed to the Board of Directors.
In 2018, the Remuneration Committee held 5 meetings, within the scope of which it: i. concluded the investigation on the 2019-2021 Performance Share Plan approved by the Shareholders' Meeting held on 11 June 2018; ii. with reference to the short term variable component of the remuneration of the Chairman and the Chief Executive Offi cer, reported the business performances and other objectives related to the MBO for 2017 and established the performance objectives concerning the MBO for 2018; iii. with reference to the medium-long term variable component of remuneration, verifi ed the consistency of the identifi cation of the recipients of the 3rd cycle of the 2016-2018 Performance Share Plan, establishing
objectives and the relevant identifi cation of the criteria for calculating the number of rights to grant to each of them;
iv. verifi ed the overall adequacy of the Remuneration Policy adopted in the 2018 fi nancial year;
v. drafted the contents of this Remuneration Policy to be approved by the Board of Directors and the advisory vote of the Shareholders' Meeting called to approve the fi nancial statements for the 2018 fi nancial year.
In early 2019, the Committee therefore prepared a proposal for the Remuneration Policy that will be submitted to the approval of the Board of Directors and to the advisory vote of the Shareholders' Meeting called to approve the fi nancial statements for the 2018 fi nancial year and expressed its opinion on this Report. In the following page it is illustrated the cycle of tasks performed by the Committee in 2018:
1.3. Independent experts involved in preparing the Remuneration Policy and information on using, as reference, the Remuneration Policies of other companies This 2019 Policy, in line with the 2018 Policy, in consideration of the benchmark analysis conducted by Willis Towers Watson, intends to align the Policy itself with the most common
market practices for listed companies to
gradually adjust wages that seemed irregular to
meet market levels.
Again, with the assistance of Willis Towers Watson, the Company also developed the 2019-2021 Performance Share Plan, approved
by the Shareholders' Meeting held on 11 May 2018, in keeping with the 2016-2018 Performance Share Plan approved by the Shareholders' Meeting held on 19 May 2017 (see below).
2.1. Goals pursued by the Remuneration Policy, basic principles and changes with respect to the Policy adopted for the 2018 fi nancial year The Company's Remuneration Policy is defi ned in compliance with the Company's governance model and with the recommendations of the Corporate Governance Code, to promote the Company's mission and its corporate values, to attract, motivate and retain management with high-level professional skills, capable of guiding
• Remuneration of the Chairman and of the Chief Executive Officer: MBO 2017 final balance and defining MBO 2018
SIGNIFICANT EVENTS IN 2018
the Company to success and profi tability. Its purpose is also to align the interests of that same management with the primary objective of creating value for the Company's shareholders over the medium-long term, ensuring that remuneration is based on the results eff ectively achieved. To this end, the Company examines market practices of Remuneration Policies, thus ensuring an adequate level of its competitiveness in the labour market. In 2018, in keeping with the previous year, the Company continued with implementing the plan to adjust the remunerations of Key Executives and those of other managers to correctly position them with the relevant market, also in view of the evidence that materialised from the update of the assessment of weighing managerial positions, made with the assistance of Willis Towers Watson during the fi rst quarter of 2017. The abovementioned adjustment plan therefore permitted, also during the 2018 fi nancial year, to mitigate, where appropriate, the irregularities between the remuneration positioning of Fincantieri's Key Executives and the relevant market; in fact, as a result of the actions undertaken in 2018, the percentage of Key Executives registered an increase that meets the market median, which from 39% for the 2017 fi nancial year stands at 62% in 2018. The Remuneration Policy applied to the Chief Executive Offi cer, to the Chairman, to the General Managers, to the Executives with Strategic Responsibilities and to other Key Executives therefore aims to encourage their performance within the Company and achieve the strategic objectives of the same, fostering the loyalty of management by granting an appropriate fi xed remuneration component and by adopting variable remuneration systems linked to achieving certain individual and Group performance objectives. With this in mind, the Remuneration Policy and the 2019-2021 LTI Plan, approved by
vi. the Company may request restitution, in whole or in part, of variable components of the remuneration paid (or retain sums that are the subject to deferment) that were calculated based on information that later proves to be manifestly erroneous (the claw-back).
The Remuneration Policy applied to the parties above is thus oriented toward valorising sustainable performance and the achievement of the Company's strategic priorities. In accordance with the provisions of the Corporate Governance Code, the remuneration of non-executive directors is commensurate with the commitment requested from each of these, also taking account of their participation in one or more Committees of the Board of Directors and does not foresee any variable components.
The Remuneration Policy for the 2019 fi nancial year does not foresee signifi cant changes compared to 2018, with the exception of the introduction of the 2019-2021 LTI Plan approved by the Shareholders' Meeting held on 11 March 2018. It should be noted, also, that on 22 January 2019, the Board of Directors resolved to appoint a second General Manager who will assist the General Manager appointed earlier on 26 September 2016.
2.3. Remuneration structure: fi xed components and variable components; performance objectives based on which variable components are assigned, and information on the connection between changes in performances and changes in remuneration
The remuneration of the Chief Executive Offi cer, the Chairman, the General Managers, of Executives with Strategic Responsibilities and of other Key Executives is established
the Shareholders' Meeting held on 11 June 2018 in keeping with the 2016-2018 LTI Plan, confi rm Fincantieri's intent to encourage its management through eff ective remuneration instruments, able to attract, motivate and retain the Company's top management and key resources, by increasingly favouring the variable component of remuneration rather than the fi xed one, thus aligning management's interests with those of the shareholders in the medium-long term. Moreover, in view of the increasing expectations of the fi nancial community on sustainable development, the abovementioned 2019-2021 LTI Plan not only provides the fi nancial and economic performance objectives linked to stock performance, but also a sustainability index.
To strengthen the link between remuneration and the medium-long term interests of the Company, the Remuneration Policy envisages that:
i. the fi xed and the variable components are appropriately balanced and, with respect to the latter, the short term and the medium-long term variable components; ii. the fi xed component is suitable to compensate the concerned party's performance if the variable component is not disbursed due to the failure to achieve the performance objectives;
iii. a signifi cant portion of the remuneration of those concerned is based on the three-year incentive plans;
iv. the remuneration relating to these plans is granted upon achievement of the performance objectives, which are also based on a three-year cycle;
v. these objectives are predetermined, measurable and indicative of the Company's operational effi ciency, as well as its capacity to remunerate the invested capital and create value for the shareholders over the mediumlong term;
in such a way as to align their interests with the pursuit of the primary objective of value creation for the shareholders over the medium-long term. In addition, as emphasised in the chart below, following the introduction of the medium-long term variable component referred to in the 2016-2018 LTI Plan, the pay-mix demonstrates an increase in the variable component. The pay-mix, therefore, is balanced on the basis of the Company's strategic objectives and risk management policy, taking account of the industry in which it operates and the characteristics of the business it performs. For the roles of greater responsibility, the variable components are emphasised as compared to the fi xed component, in line with the best market practices:
Also, if one were to consider the pay-mix resulting from the introduction of the 2019-2021 LTI Plan, the medium term variable component becomes even more predominant, as represented represented in the following page:
In view of the above, the abovementioned persons are recipients of a salary package structured as follows:
| TYPE OF REMUNERATION | PURPOSE | POSITIONS INVOLVED |
|---|---|---|
| Fixed remuneration | Remunerates the role and more specifi cally the responsibilities assigned to the recipients, taking account, among other things, of the experience, quality of contribution made to achieving the business results and level of excellence with respect to the assigned duties. |
• Chairman • Chief Executive Offi cer • Non-executive Directors • General Managers • Executives with Strategic Responsibilities • Other Key Executives |
| Short term variable remuneration (annual MBO) |
Remunerates results achieved in the short term and is aimed at expressing the industrial plan strategies into a series of annual, individual and group objectives, capable of decisively infl uencing the performances of the executives involved. |
• Chairman • Chief Executive Offi cer • General Managers • Executives with Strategic Responsibilities • Other Key Executives |
| Medium-long term variable remuneration (Performance Share Plan) |
Remunerates results achieved in the medium-long term and is aimed at improving the alignment of interests of the recipients with those of the shareholders and supporting the retention capabilities for key resources. |
The benefi ciaries are individually identifi ed at the discretion of the Board of Directors, on the advice of the Remuneration Committee, among the following persons: • Chief Executive Offi cer and, according to the Chief Executive Offi cer's indications, the following persons: • General Managers • Executives with Strategic Responsibilities • Other Key Executives |
In the above charts, the values of the variable components were calculated as follows:
• the short term variable component: the annual values that can be obtained upon achieving the target are shown;
• he medium-long term variable component: the fi rst chart shows the value of the incentive in terms of number of shares that can be obtained when all target objectives are met in the third three-year cycle of the 2016-2018 LTI Plan while, in the second chart, the value of the incentive in terms of number of shares that can be obtained when all target objectives are met in the fi rst three-year cycle of the 2019-2021 LTI Plan. The abovementioned incentives were quantifi ed considering the value of the shares when granted, assuming that the benefi ciaries participate in all three cycles of each Plan as well as the fact that they remain in the same even after the end of the abovementioned three cycles of each Plan.
The fi xed salary component is commensurate to the role, the commitment required and the connected responsibilities. It is suffi cient to remunerate the services performed, including in the event of no payment or only partial payment of the variable components, where envisaged. This is determined taking account of the level of experience of the individual party, of the professional contribution that the same brings to the achieving business results, as well as the level of excellence with respect to the duties assigned. The fi xed component is also such as to ensure a suitably competitive position with respect to the level of salary paid by the market for the specifi c position.
In line with the recommendations of the Corporate Governance Code and with the purposes described in paragraph 2.1 above, under the Policy the fi xed component of the remuneration is made up of:
– the salary resolved by the Shareholders' Meeting for the offi ce of member of the Board of Directors under Article 2389(1) of the Italian Civil Code;
– the salary resolved by the Board of Directors under Article 2389(3) of the Italian Civil Code, on proposal from the Remuneration Committee and in accordance with the opinion of the Board of Statutory Auditors, for the role of Chief Executive Offi cer;
• For the Chairman of the Board of Directors: – the salary resolved by the Shareholders' Meeting for the offi ce of Chairman under Article 2389(1) of the Italian Civil Code;
– the salary resolved by the Board of Directors under Article 2389(3) of the Italian Civil Code, on proposal from the Remuneration Committee and in accordance with the opinion of the Board of Statutory Auditors, in consideration of the breadth and nature of the specifi c duties which may be assigned;
• for non-executive Directors:
The variable remuneration utilises diff erent incentive programmes and instruments, depending on the resources involved and the timescale taken into consideration, to mitigate the management's assumption of risks and to incentivise the creation of sustainable shareholder value over the medium-long term. Benefi ciaries of the short term variable remuneration are: Chief Executive Offi cer, Chairman, General Managers, Executives with Strategic Responsibilities and other Key Executives.
The recipients of the medium-long term remuneration are individually identifi ed at the discretion of the Board of Directors, in accordance with the opinion of the Remuneration Committee, to the extent applicable, in the case of the Chairman and the Chief Executive Offi cer, and based on the indications of the Chief Executive Offi cer in relation to the General Managers, other Executives with Strategic Responsibilities, other Key Executives and other key resources identifi ed with the purposes of incentivising and retaining, as provided for in the regulations of the LTI Plans.
The use of a short term variable incentive Plan on an annual basis (MBO) intends to spell out the industrial plan's strategies in a series of annual objectives. The MBO can decisively infl uence the performance of the executives involved. The objectives, identifi ed in line with the industrial plan, are predetermined and measurable and are
assigned annually by way of plans discussed with the individual recipients.
Based on the achievement level of their own targets, the executives involved receive a bonus consisting in a predefi ned percentage of their base salary, which, in accordance with the MBO group to which they belong, ranges from a minimum of 35% for the achievement of the targets (which can be increased up to 38.2% in the case of over performance) to a maximum of 50% for achieving the target (which may be increased up to 54% in
– the salary resolved by the Shareholders' Meeting for the offi ce of member of the Board of Directors under Article 2389(1) of the Italian Civil Code;
– the amounts resolved by the Board of Directors, in accordance with the opinion of the Board of Statutory Auditors, and payable to the Chairman and the members of the internal committees of the Board of Directors;
– the gross annual salary provided according to their individual contract, in compliance with the provisions of the applicable collective laws. Furthermore, the abovementioned executives receive allowances for travelling either nationally or abroad, in line with the provisions under the applicable National Collective Bargaining Agreements and company level contracts.
The variable component is intended to remunerate management for the results achieved over the short and medium-long term. The direct relationship between results achieved and payment of the incentives allows, on the one hand, to take into account the results of the Company and the Group while, on the other, to strengthen the merit-based system, diff erentiating the contribution of each person and at the same time motivating the human resources.
The pay mix relative to the variable part of the remuneration consists of:
• a short term component, based on short term variable incentive plans on an annual basis (MBO); and
• a medium-long term component, based on the share plans (the LTI Plans).
case of over performance).
In particular, the 2016-2018 LTI Plan is characterised by the following elements:
– it is based on granting the benefi ciaries Fincantieri shares with no par value based on the achievement of specifi c performance objectives;
– it consists of three cycles, each of which lasts three years;
– a three-year performance period is foreseen for each of the three cycles (2016-2018 for the 1 st cycle, 2017-2019 for the 2nd cycle, 2018-2020 for the 3rd cycle);
– it provides for a vesting period of approximately three years;
– there are economic and fi nancial performance targets (such as EBITDA) as well as targets connected to share performance (such as the TSR with respect to either the Modifi ed FTSE Italia All Share index, or to an international Peer Group), which establishes the allocation of the shares to each benefi ciary at the end of the performance period, subject to compliance with all the other conditions provided for in the Plan regulations. These objectives are identifi ed by the Board of Directors, in accordance with the opinion of the Remuneration Committee;
– a lock-up period is envisaged during which period, subject to derogations authorised by the Board of Directors in accordance with the opinion of the Remuneration Committee, the benefi ciaries who are members of the Board of Directors, the General Managers or the Executives with Strategic Responsibilities are obliged to hold and not to dispose of in any way any portion of the shares granted under the Plan (equal to 20% of the shares allocated according to the Plan minus any shares potentially necessary to pay the tax charges deriving from the delivery of such shares) for a period of three years (in the case of permanent employment contracts) or until the end of their term of offi ce or contract
as targets connected to share performance (such as the TSR with respect to either the Modifi ed FTSE Italia All Share index, or to an international Peer Group) or linked to a sustainability index (such as obtaining a certain rating from international rating agencies), which establish the allocation of the shares to each benefi ciary at the end of the performance period, subject to compliance with all the other conditions provided for in the Plan regulations. These objectives are identifi ed by the Board of Directors, in accordance with the opinion of the Remuneration Committee;
– there is a lock-up period during which, subject to derogations authorised by the Board of Directors on the advice of the Remuneration Committee, the benefi ciaries who are members of the Board of Directors, the General Managers or the Executives with Strategic Responsibilities are obliged to hold and not to dispose of in any way any portion of the shares granted under the Plan (equal to 20% of the shares allocated according to the Plan minus any shares potentially necessary to pay the tax charges deriving from the delivery of such shares) for a maximum period of two years (in the case of permanent employment contracts) or until the end of their term of offi ce or contract (in the case of administrative or fi xed-term employment relationships).
Based on the foregoing, as regards the variable components of the remuneration, the pay mix for the Chief Executive Offi cer, Chairman, General Manager, Executives with Strategic Responsibilities and Key Executives is made up of:
– an MBO Plan with both annual quantitative targets, fi nancial and economic (such as the EBITDA Margin or the value of purchase orders), as well as qualitative targets linked to achieving specifi c results. The percentage
(in the case of administrative or fi xed-term employment relationships);
– a limit is envisaged (known as 'cap') for the maximum value of the shares that may be granted under the Plan to each benefi ciary, obtained by multiplying the number of shares which may be granted on the allocation date based on the level of achievement of the performance objectives, by the quadruple of their market price at the date of the free assignment of the relevant rights.
The performance period of the fi rst cycle (2016-2018) of the abovementioned Plan ended on 31 December 2018. By and no later than 31 July, the Board of Directors will be called, in accordance with the Remuneration Committee, on the Chief Executive Offi cer's proposal, to report on business performances and on the other objectives of the 2016-2018 LTI Plan and to establish the number of shares to be allocated to each benefi ciary of the same in relation to the extent of achieving the objectives and to the incentive percentage granted to each.
In continuity with the abovementioned 2016- 2018 LTI Plan, the 2019-2021 LTI Plan, approved by the Shareholders' Meeting held on 11 May 2018, essentially follows the same pattern of the previous one and is characterised by the following elements:
– it is based on granting the benefi ciaries Fincantieri shares with no par value based on the achievement of specifi c performance targets;
– it consists of three cycles, each of which lasts three years;
– a three-year performance period is foreseen for each of the three cycles (2019-2021 for the 1 st cycle, 2020-2022 for the 2nd cycle,
2021-2023 for the 3rd cycle);
– it provides for a vesting period of approximately three years;
– there are economic and fi nancial
performance targets (such as EBITDA) as well
target was defi ned by the Board of Directors, on the proposal from the Remuneration Committee and on the advice of the Board of Statutory Auditors, in the amount of 60% of the annual fi xed component, which can be increased up to 65% in the event of over performance. The incentive accrued is distributed after the Board of Directors has verifi ed, in accordance with the opinion of the Remuneration Committee, the attainment of the pre-set objectives, following approval of the consolidated fi nancial statements for the fi nancial year in question and in compliance with the provisions of the relative Plan. – the 2016-2018 LTI Plan with fi nancial and economic multi-year objectives connected to share performance. At the time of the assignment of the rights to acquire free shares of the Company under the 2016- 2018 LTI Plan, the number of those rights amounts to 100% of the fi xed remuneration component, which can be increased up to 130% for over performance. The value of the rights assigned is subject to the above cap. The incentive accrued is granted and distributed after the Board of Directors has verifi ed, in accordance with the opinion of the Remuneration Committee, the achievement of the pre-set objectives, following verifi cation of the consolidated fi nancial statements for the fi nancial year in question for each cycle of the Plan, as well as the existence of all other conditions laid down in the 2016-2018 LTI Plan's regulations, and is therefore disbursed in accordance with those same regulations. – The 2019-2021 LTI Plan with multi-year economic and fi nancial objectives is linked to the share's performance and to a sustainability index. The granting of the number of rights to receive the Company's shares for free, with respect to the 2019-2021 LTI Plan, amounting to 115% of the remuneration's fi xed component for target performance and that can be increased to 172.5% for over performance, will be subject to subsequent approval by
22 23
the Board of Directors. The incentive accrued is granted after the Board of Directors has verifi ed, in accordance with the opinion of the Remuneration Committee, the attainment of the pre-set objectives, following approval of the fi nancial statements for the last relevant fi nancial year for each cycle of the plan, as well as the existence of all the other conditions laid down in the 2019-2021 LTI Plan's regulations and is therefore distributed in compliance with the provisions of the regulations themselves. • for the Chairman:
– a short term variable incentive plan with as many quantitative, fi nancial and economic (such as the EBITDA Margin or the value of purchase orders) annual objectives (MBO), as there are qualitative and quantitative objectives tied to achieving specifi c results. The amount is established as a fi xed amount by the Board of Directors, following a proposal by the Remuneration Committee and on the advice of the Board of Statutory Auditors, and paid following a specifi c resolution in relation to achieving pre-set annual targets.
– an MBO plan with annual targets of both quantitative, of a fi nancial and economic nature as well as qualitative, for both the Company and the individual, which take into consideration the role held (such as the value of purchase orders, curbing certain structure costs, or specifi c qualitative and quantitative objectives).
The target amount of the short term variable component of the remuneration (MBO) of the General Managers amounts to 55% of the fi xed remuneration component, which may be increased up to 59.25% for over performance. The maximum target amount of the short term variable component of the remuneration (MBO) of Executives with Strategic Responsibilities and of other Key Executives, depending on the MBO range they fall into, varies from a minimum of
objectives are met; in the event of over performance, such percentages will increase, depending on the bracket's range in which the recipient falls, from a minimum of 43% to a maximum of 78%.
– The 2019-2021 LTI Plan with multi-year economic and fi nancial objectives is linked to the share's performance and to a sustainability index. The granting of the number of rights to receive the Company's shares for free, with respect to 2019-2021 LTI Plan, will be subsequently approved by the Board of Directors, on the advice of, to the extent applicable, the Remuneration Committee, on the Chief Executive Offi cer's recommendation, in view of the position held by the benefi ciary. The incentive accrued is granted after the Board of Directors has verifi ed, on the advice of the Remuneration Committee, the achievement of the pre-set objectives, following approval of the fi nancial statements for the last relevant fi nancial year for each cycle of the plan, as well as the existence of all the other conditions laid down in the 2019-2021 LTI Plan's rules and is therefore distributed in compliance with the provisions of the rules themselves. The amount of the incentive is equal to the following percentage of the fi xed remuneration component linked to the bracket's range in which the recipient falls, established by the Board of Directors, in accordance with the opinion of the Remuneration Committee and on the Chief Executive Offi cer's proposal, based on the impact of its role on the Company's performance:
• for the General Managers: 95% when target objectives are met, increasing up to 142.5% in the event of over performance;
• for the Executives with Strategic Responsibilities and other Key Executives varies depending on the bracket's range in which the recipient falls from a minimum of 33% to a maximum of 85% when target objectives are met; in the event of over
35% to a maximum of 50% of the base salary; in the case of over performance, depending on the MBO to which they fall into , those percentages will vary from a minimum of 38.2% to a maximum of 54%. The incentive accrued is assigned and disbursed following verifi cation by the Chief Executive Offi cer of the degree of attainment of the pre-set objectives, following approval of the consolidated fi nancial statements relating to the fi nancial year in question, and is therefore distributed in compliance with the relative Plan.
– The 2016-2018 LTI Plan with multi-year objectives, whether fi nancial and economic, as well as linked to share performance. The incentive accrued is paid after the Board of Directors, within its scope of competence and in accordance with the opinion of the Remuneration Committee, has verifi ed the achievement of the pre-set objectives, following the approval of the consolidated fi nancial statements concerning the last fi nancial year for each cycle of the Plan, as well as the existence of all other conditions laid down in the Plan's rules, and is therefore disbursed in accordance with those same rules. Within the limits of the cap referred to in the Plan, the amount of the incentive is equal to the following percentage of the fi xed remuneration component linked to the bracket's range in which the recipient falls, established by the Board of Directors, in accordance with the opinion of the Remuneration Committee and on the Chief Executive Offi cer's proposal, based on the impact of its role on the Company's results:
• for the General Managers: 75% when target objectives are met, increasing up to 97.5% in the event of over performance;
• for the Executives with Strategic Responsibilities and other Key Executives: varies depending on the bracket's range in which the recipient falls from a minimum of 33% to a maximum of 60% when target
performance, such percentages will increase, depending on the bracket's range in which the recipient falls, from a minimum of 49.5% to a maximum of 127.5%.
For every aspect of the details, reference is made to the contents of the Information Documents for the 2016-2018 LTI Plan and for the 2019-2021 LTI Plan drawn up under Article 114–bis of the Italian Consolidated Law on Finance and Article 84-bis of the Issuers' Regulation, published by the Company.
In exceptional and extraordinary circumstances with respect to the Remuneration Policy, and with the view of attracting key market fi gures or motivating and retaining the best human resources, the Company may pay sums of money in terms of a one-off , entry bonus, retention bonus or success fee at the executive recruitment stage, or at any other time when the need may arise, to an extent that is in keeping with the most widespread market practices.
Where intended for the Chairman or Chief Executive Offi cer, those extraordinary salary components are subject to resolution by the Board of Directors, on proposal of the Remuneration Committee. For General Managers, Executives with Strategic Responsibilities and other Key Executives, the issuance is remitted to the exclusive evaluation of the Chief Executive Offi cer.
On the Remuneration Committee's proposal, the Board of Directors also has the power, within its competence, to resolve on the payment of any exceptional bonuses in connection with extraordinary transactions and/or results (such as for example, acquisitions, mergers, or divestments) having a signifi cant impact on the Company, and as such are unlikely to be adequately recompensed within the ordinary variable remuneration systems.
The foregoing was also recently recommended by the Italian Committee for Corporate Governance.
The Chief Executive Offi cer, the Chairman, the General Managers, other Executives with Strategic Responsibilities, and other Key Executives are given the use of a company car for both business and private use with the relative fuel. Also, where appropriate, they are granted use of an apartment for longer stays as an alternative to hotel accommodation, limited in time, however, according to cost eff ectiveness.
2.3.4. Criteria used for evaluation of performance targets at the basis of the assignment of variable salary components and information aimed at highlighting the coherence of the Remuneration Policy with the pursuit of the Company's long-term interests and risk management policy
The performance targets provided by the Remuneration Policy for the disbursement of the variable salary component are identifi ed by taking account of the specifi c activities conducted by the Company and of their connected risk profi les.
More specifi cally, the payment of the variable component of the short term incentive Plan is normally tied to the attainment of preset fi nancial and economic performance objectives related to the annual budget.
The salary packages off ered in the event of the end of offi ce term or the termination of the employment contract is regulated by the current National Collective Bargaining Agreement for executives of companies that produce goods or services, as well as being left to the stipulation of specifi c agreements with the individual parties involved. In any event, such agreements may not provide for the payment of an indemnity which may not exceed an amount equivalent to 36 gross monthly salaries, including the instalment of the thirteenth month of the annual salary.
Under Article 2125 of the Italian Civil Code, specifi c compensation may also be provided for those cases in which there is the need to conclude non-competition agreements with the members of the Board of Directors, General Managers, Executives with Strategic Responsibilities and other Key Executives.
The Chairman and Chief Executive Offi cer are provided with determinate insurance covers. General Managers, Executives with Strategic Responsibilities and other Key Executives, as well as for the other Company executives, supplementary insurance, welfare and pension benefi ts are provided which are more generous
The comparison of the fi nal balance fi gures with the assigned objectives determines the amount of the variable component of the payable remuneration.
The payment of what is envisaged, however, regarding the medium-long term variable component, is aimed at creating value for all the shareholders over the medium-long term. It is therefore usually connected to achieving pre-set fi nancial and economic performance objectives referred to in the industrial plan and/or to the stages thereof or based on share performance and/ or the fi nancial return for the shareholders over the mediumlong term.
The 2019-2021 Plan provides for a sustainability index in addition to the economic and fi nancial objectives linked to the performance of the stock.
For the medium-long term variable component, there is envisaged a vesting period of approximately three-years and a lock-up period, unless the Board of Directors, in accordance with the opinion of the Remuneration Committee, grants exceptions as indicated in paragraph 2.3.2. above. Claw-back clauses are provided in relation to all variable remuneration components.
than those established by the National Collective Bargaining Agreement which applies to the executives of the Group.
regarding: (i) the independent Directors, (ii) participation in Committees and (iii) performing specifi c assignments The remuneration of the independent Directors is the same as that described in paragraph 2.3.1. herein in relation to non-executive Directors. For Directors participating in the Board of Directors' internal Committees, under the Remuneration Policy, they shall receive, for their participation in each Committee, additional remuneration established by the Board of Directors, after the Remuneration Committee's proposal, as stated in paragraph 2.3.1. above.
Remuneration received in the fi nancial year 2018 by the members of the Board of Directors and Board of Statutory Auditors, the General Manager, as well as Key Executives/Executives with Strategic Responsibilities
Where the 2018 fi nancial year is concerned, this part of Section II of the Report sets out: (i) the salaries payable to individuals who held the roles of Director, Statutory Auditor or General Manager during that year or for part thereof, by name, and (ii) the aggregate salaries payable to Key Executives /Executives with Strategic Responsibilities. These items are also shown in summary in the tables in the Second Part of this Section.
For the entire 2018 fi nancial year, Ambassador Giampiero Massolo held the offi ce of Chairman of the Board of Directors, and his remuneration for the 2018 fi nancial year (from 1 January to 31 December 2018) was comprised as follows:
• Fixed component: EUR 300,000, per annum, of which:
– EUR 40,000 per annum, as resolved by the Shareholders' Meeting held on 19 May 2016 for the offi ce of Chairman of the Board of Directors, under Article 2389(1) of the Italian Civil Code; the abovementioned amount will be paid in 2019;
– EUR 260,000 per annum, as resolved by the Board of Directors held on 20 July 2016, under Article 2389(3) of the Italian Civil Code, on the Remuneration Committee's proposal and having consulted the Board of
was established in the amount of EUR 100,000, subject to adjustment up to a maximum of EUR 120,000 in the event of over performance; in accordance with the Remuneration Committee's proposal, the meeting of the Board of Directors held on 7 May 2018 established that the specifi c target conditions had been met in full, together with the partial achievement of the specifi c over performance conditions; as a result, it established the amount of the economic impact of the incentive in an amount equal to EUR 115,000.
• Non-monetary benefi ts: provision of a company car for business and private use plus fuel, supplementary health package, insurance and further minor benefi ts, for the total amount of EUR 2,092.32, established on the basis of taxable income criteria.
No payments are made where the appointment is terminated.
For the entire 2018 fi nancial year, Mr Giuseppe Bono held the offi ce of Chief Executive Offi cer. Mr Bono's remuneration for the 2018 fi nancial year (from 1 January to 31 December 2018) was comprised as follows:
• Fixed component: EUR 950,000 per annum, of which:
– EUR 27,000 as remuneration, resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors, under Article 2389(1) of the Italian Civil Code, which will be paid in 2019;
– EUR 923,000 per annum, as the remuneration resolved by the Board of Directors on 20 July 2016, under Article 2389(3) of the Italian Civil Code, on the Remuneration Committee's proposal and on the opinion of the Board of Statutory Auditors, for the offi ce of Chief Executive Offi cer.
• Short term variable component: – 2018 MBO Plan: as established by the Board of Directors on 20 July 2016 and
Statutory Auditors, given the breadth and characteristics of the specifi c delegations assigned; this amount was paid in 2018.
• Short term variable component: – 2018 MBO Plan: as established by the Board of Directors on 20 July 2016 and subsequently confi rmed on 7 May 2018, in accordance with the Remuneration Committee's proposal and the opinion of the Board of Statutory Auditors, the short term variable component is EUR 100,000, subject to adjustment up to a maximum of EUR 120,000 in the event of over performance; in 2019, the Board of Directors will verify that the objectives were achieved and establish the actual incentive, on the Remuneration Committee's proposal, on the basis of the records of the fi nancial statements and specifi c reporting. Any amounts due will be paid in 2019.
Ambassador Massolo's remuneration for the 2018 fi nancial year is as follows:
– EUR 260,000, as remuneration for the 2018 fi nancial year, as resolved by the Board of Directors on 20 July 2016, under Article 2389(3) of the Italian Civil Code, on the Remuneration Committee's proposal and having consulted the Board of Statutory Auditors, given the breadth and characteristics of the specifi c delegations assigned.
subsequently confi rmed on 7 May 2018, on the Remuneration Committee's proposal and in accordance with the opinion of the Board of Statutory Auditors, the short term variable component is EUR 570,000 where targets are achieved, with an adjustment up to a maximum of EUR 617,500 in the event of over performance. The Board of Directors establishes whether target objectives have been achieved and the actual incentive , in the course of 2019, in accordance with the Remuneration Committee's proposal, on the basis of the records of the 2018 consolidated fi nancial statements and specifi c cost reporting. Any amount due will be paid in 2019. • Medium-long term variable component: – 2016-2018 LTI Plan: on 19 May 2017, the Shareholders' Meeting approved the 2016-2018 LTI Plan proposed by the Board of Directors; with reference to the third cycle (2018-2020) of the abovementioned Plan; on 22 June 2018, the Board of Directors, in accordance with the Remuneration Committee's proposal and the opinion of the Board of Statutory Auditors, established that 707,530 rights to receive ordinary shares in Fincantieri would be allocated free of charge if all target objectives were met and subject to the conditions imposed by the Regulations that govern the Plan. In the event of over performance, the number of rights may be increased up to a maximum of 30%. Any allocation in relation to the third cycle will take place in 2021.
Remuneration eff ectively paid to Mr Bono during the 2018 fi nancial year is:
5 Mr Bono's remuneration as Chairman of VARD Group AS (1 January - 29 September 2016) equal to SGD 243,750 (EUR 163,333 at the average exchange rate as of 22 February 2016 – SGD/EUR = 0.67008) will be paid and transferred by the Chief Executive Offi cer to Fincantieri in full in 2018. Note also that the remuneration referred to above in this footnote and any remuneration in relation to other subsidiaries and affi liated companies are not included in the total of EUR 950,000, having these been transferred to Fincantieri.
2018 fi nancial year, as resolved by the Board of Directors on 20 July 2016, under Article 2389(3) of the Italian Civil Code, in accordance with the Remuneration Committee's proposal and the opinion of the Board of Statutory Auditors, for the offi ce of Chief Executive Offi cer.
The Board of Directors, appointed by the Shareholders' Meeting on 19 May 2016 for the 2016-2018 three-year period, was in offi ce for the entire 2018 fi nancial year. In addition to Directors Ambassador Giampiero Massolo and Mr Giuseppe Bono, the following are members of the Board of Directors:
The remunerations resolved for the abovementioned members of the Board of Directors are made up of a fi xed part alone, which will be paid during the course of the 2019 fi nancial. More specifi cally:
• Gianfranco Agostinetto (Architect) (independent), Simone Anichini (independent), Massimiliano Cesare (Lawyer) (independent), Nicoletta Giadrossi (independent), Paola Muratorio (Architect) (independent), Fabrizio Palermo (not independent) and Donatella Treu (independent).
On 8 June 2016, the Board of Directors appointed the Advisory Committees and its members and established their remuneration. Subsequently, on 21 June 2016, the Board of Directors resolved, in accordance with the opinion of the Board of Statutory Auditors, the remuneration to be paid to the Director Gianfranco Agostinetto, amounting to EUR 2,000 for each meeting of the Internal Control and Risk Management Committee as the Committee for Transactions with Related Parties to which the same is called to participate as an independent member to replace Mr Fabrizio Palermo, in the event that the Committee should analyse Transactions of Major Relevance.
More specifi cally, for the entire 2018 fi nancial year, the abovementioned Board committees are comprised as follows:
• Internal Control and Risk Committee, comprised by Massimiliano Cesare (Lawyer) (Chairman), Nicoletta Giadrossi and Fabrizio Palermo. This Committee also operates as the Committee for Transactions with Related Parties; when analysing Transactions of Major Relevance, Mr Palermo is replaced by the independent director Gianfranco Agostinetto (Architect);
• Remuneration Committee, comprised by Paola Muratorio (Architect) (Chairman), Donatella Treu and Fabrizio Palermo;
• Director Nicoletta Giadrossi's remuneration for the 2018 fi nancial year was EUR 67,000 per annum of which:
– EUR 27,000 as remuneration resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors; – EUR 20,000 as remuneration for the offi ce of Chairman of the Internal Control and Risk Committee;
– EUR 20,000 as remuneration for the offi ce of member of the Sustainability Committee. • Director Paola Muratorio's remuneration for the 2018 fi nancial year was EUR 57,000 per annum of which:
– EUR 27,000 as remuneration resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors; – EUR 30,000 as remuneration for the offi ce of Chairman of the Remuneration Committee. • Director Fabrizio Palermo's remuneration for the 2018 fi nancial year was EUR 87,000 per
annum of which:
– EUR 27,000 as remuneration resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors; – EUR 20,000 as remuneration for the offi ce of member of the Remuneration Committee; – EUR 20,000 as remuneration for the offi ce of member of the Appointments Committee; – EUR 20,000 as remuneration for the offi ce of member of the Internal Control and Risk
• Director Donatella Treu's remuneration for the 2018 fi nancial year was EUR 77,000 per annum, of which:
– EUR 27,000 as remuneration resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors; – EUR 30,000 as remuneration for the offi ce of Chairman of the Appointments Committee; – EUR 20,000 as remuneration for the offi ce of member of the Remuneration Committee.
No payments are due in relation to cease of offi ce.
As mentioned previously, the members of the Internal Control and Risk Committee, the Appointments Committee, the Remuneration Committee and the Sustainability Committee receive an additional remuneration established by the Board of Directors on the Remuneration Committee's proposal, in the amount of EUR 30,000 for the offi ce of Chairman and EUR 20,000 for other standing members. The remunerations in 2018 for those holding the offi ce of Chairman and for the members of the Committees are set out in the previous paragraph.
The Board of Statutory Auditors currently in offi ce was appointed by the Shareholders' Meeting held on 19 May 2017 and is made up of the standing auditors Gianluca Ferrero (Chairman), Fioranna Vittoria Negri and Roberto Spada. The Shareholders' Meeting resolved to remunerate the members of the Board of Statutory Auditors as follows:
• EUR 37,000 per annum for the Chairman; and • EUR 26,000 per annum for each standing auditor.
The abovementioned amounts relating to the 2017 fi nancial year were paid in 2018; the amounts pertaining to the 2018 fi nancial year will be paid in the 2019 fi nancial year.
For the entire 2018 fi nancial year, the offi ce of General Manager of the Company was held by Alberto Maestrini (Engineer). Mr. Maestrini's remuneration is comprised as follows:
• Fixed component: EUR 360,350.30, referring
204,857 rights to receive ordinary shares in Fincantieri where all target objectives were met and subject to the conditions imposed by the Regulations that govern the Plan. In the event of over performance, the number of rights may be increased up to a maximum of 30%. Any allocation for the third cycle will take place in 2021.
• Non-monetary benefi ts: provision of a company car for business and private use plus fuel, supplementary health package, insurance and further minor benefi ts, in the total amount of EUR 26,853.94, established on the basis of taxable income criteria.
In 2018, new hires/dismissals and arrivals/ departures at a managerial level in terms of the various roles for the fi nancial year in question (during the year or part thereof) resulted in the aggregate presence of 23 Key Executives, 9 of which are Executives with Strategic Responsibilities.
Key Executives' remunerations are indicated at an aggregate level, and within each group, the aggregate remunerations for Executives with Strategic Responsibilities are specifi ed therein, as none of the Executives with Strategic Responsibilities had received a remuneration greater overall than the highest aggregate remuneration received by members of the Board of Directors, the Board of Statutory Auditors and by the General Manager. Set out below, in aggregate form, is a description of each of the items that make up the remuneration paid to Key Executives, with details for Executives with Strategic Responsibilities, in the 2018 fi nancial year:
• Fixed component: EUR 4,809,687.70 as gross annual remuneration, of which EUR 1,850,648.02 for Executives with Strategic Responsibilities; these amounts were paid in 2018.
to the entire 2018 fi nancial year, was paid in 2018.
• Short term variable component:
– 2017 MBO Plan: EUR 132,338.34 was disbursed for the 2017 fi nancial year. The Chief Executive Offi cer verifi ed that the target objectives set by the 2017 Plan were met on the basis of the consolidated fi nancial statements for 2017 and on specifi c cost reporting. The incentive payment was conditioned by exceeding the access threshold tied to achieving the strategic objective, as established by the Board of Directors, and consisting in achieving the target objective relevant to the EBITDA Margin, i.e. the ratio between EBITDA and Group Revenues in the fi nancial year in question (2017) of no less than 90% of the amount specifi ed in the 2017 Budget. – 2018 MBO Plan: the maximum amount for the 2018 fi nancial year is EUR 181,595 if all objectives set are met in full, and if the access threshold tied to achieving the strategic objective is exceeded.
For the 2018 fi nancial year, the incentive was paid where the target objective relevant to the EBITDA Margin was achieved, i.e. the ratio between EBITDA and Group Revenues in the fi nancial year in question (2018) of no less than 90% of the amount specifi ed in the 2018 Budget approved by the Company's Board of Directors for 2018, in order to ensure a direct link between payment of the incentive and the business's results. Any incentive due will be paid in 2019.
• Medium-long term variable component: - 2016-2018 LTI Plan: on 19 May 2017, the Shareholders' Meeting approved the 2016-2018 LTI Plan proposed by the Board of Directors; with reference to the third cycle (2018-2020) of the abovementioned Plan; on 22 June 2018, the Board of Directors, on the opinion of the Remuneration Committee, as appropriate, and on the Chief Executive Offi cer's proposal, provided for the allocation, free of charge, of
• Short term variable component: – 2017 MBO Plan: a total amount of EUR 1,509,699.37 was disbursed for the 2017 fi nancial year (out of which EUR 601,325.89 for Executives with Strategic Responsibilities). The Chief Executive Offi cer verifi ed that the objectives set by the 2017 MBO Plan were met on the basis of the consolidated fi nancial statements for 2017 and on specifi c cost reporting. The incentive payment was conditioned by exceeding the access threshold tied to achieving the strategic objective, as established by the Board of Directors, and consisting in achieving the target objective relevant to the EBITDA Margin, i.e. the ratio between EBITDA and Group Revenues in the fi nancial year in question (2017) of no less than 90% of the amount specifi ed in the 2017 Budget. Failure to reach this threshold would have led to the cancellation of the entire incentive. – 2018 MBO Plan: any incentive accrued will be paid in 2019, subject to the achievement of all objectives set. Without prejudice to the above, payment of the short term incentive will in any event be subject to exceeding an access threshold tied to attaining a strategic objective being achieved. For the 2018 fi nancial year, that involved meeting a target that related to the EBITDA Margin, i.e. the ratio between EBITDA and Group Revenues in the fi nancial year in question (2018) of no less than 90% of the
amount specifi ed in the 2018 Budget approved by the Company's Board of Directors for the fi nancial year 2018, in order to ensure a direct link between payment of the incentive and business performance. The maximum MBO amount payable in 2019 is EUR 1,681,702.90 of which EUR 713,539.35 relate to Executives with Strategic Responsibilities.
– 2016-2018 LTI Plan: on 19 May 2017, the Shareholders' Meeting approved the 2016-2018 LTI Plan proposed by the Board of Directors; with reference to the third cycle (2018-2020) of the abovementioned Plan, on 22 June 2018, the Board of Directors, on the opinion of the
Remuneration Committee, as appropriate, and on the Chief Executive Offi cer's proposal, established that 1,640,654 rights to receive ordinary shares in Fincantieri (of which 752,910 for Executives with Strategic Responsibilities) would be allocated free of charge if all target objectives were met and subject to the conditions imposed by the Regulations that govern the Plan. In the event of over performance, the number of rights may be increased up to a maximum of 30%. Any allocation in relation to the second cycle will
take place in 2021.
• Extraordinary Remuneration: no amount will be disbursed in 2018 for Extraordinary Remuneration.
• Non-monetary benefi ts: these include provision of a company car for business and private use plus fuel, the use in certain cases of an apartment for longer stays of a limited
duration, supplementary insurance cover, welfare and pension benefi ts that exceed the provisions of the relevant National Collective Bargaining Agreement in force, in the overall amount (on the basis of taxable income criteria) of EUR 430,107.79 (out of which EUR 173,102.95 for Executives with Strategic Responsibilities).
Under a specifi c agreement in place with the current General Manager, an indemnity is payable where the employment is terminated early; the indemnity comprises 36 gross monthly salaries, inclusive of the thirteenth month salary bonus, in the event of unfair dismissal , resignation with cause and termination of employment by mutual consent.
1 In the Tables above, the following abbreviations have been used for corporate bodies and the offi ces held in Fincantieri: CEO (indicates the Chief Executive Offi cer); BoD (indicates the Board of Directors); ICRMC (indicates the Internal Control & Risk Management Committee); AC (indicates the Appointment Committee); RC (indicates the Remuneration Committee); SC (indicates the Sustainability Committee); BoSA (indicates the Board of Statutory Auditors); GM (indicates the General Manager); KE (indicates Key Executives); ESR (indicates Executives with Strategic Responsibilities). 2 Note that the amounts indicated are the sum of the Fair Values of the fi rst cycle (2016-2018), of the
second cycle (2017-2019) and of the third cycle (2018-2020) of the 2016-2018 LTI Plan. 3 The fi xed remuneration of the Chairman consists of: (i) EUR 40,000 disbursed in the 2018 fi scal year and accrued in 2017, as remuneration for the offi ce of Chairman of the Board of Directors, resolved by the Shareholders' meeting of 19 May 2016 under Article 2389(1) of the Italian Civil Code; (ii) EUR 260,000 as remuneration accrued in the 2018 fi scal year, resolved by the Board of Directors on 20 July 2016 under Article 2389(3) of the Italian Civil Code, on the RC's proposal, and in accordance with the opinion of the SC, by virtue of the breadth and characteristics of the specifi c delegated powers granted; that amount was disbursed in 2018. It should be noted, also, that the remuneration for the offi ce of Chairman of the Board of Directors, resolved by the Shareholders' Meeting held on 19 May 2016, under Article 2389(1) of the Italian Civil Code for the 2018 fi nancial year, amounting to EUR 40,000, will be disbursed in 2019. 4 The amount refers to the 2017 MBO Plan and was disbursed in 2018 after the Board of Directors
verifi ed, on 7 May 2018, on the RC's proposal, the fulfi llment of specifi c target conditions together with the partial achievement of the specifi c conditions for over performance. 5 The CEO's fi xed remuneration consists of: (i) EUR 27,000, as remuneration for the 2017 fi nancial year, resolved by the Shareholders' Meeting on 19 May 2016 for the offi ce of member of the Board of Directors, under Article 2389(1) of the Italian Civil Code; that amount was disbursed in 2018; (ii) EUR 923,000, as remuneration, accrued during the 2018 fi nancial year, as resolved by the Board of Directors on 20 July 2016, under Article 2389(3) of the Italian Civil Code, on the RC's proposal and in accordance with the SC's opinion, for the offi ce of Chief Executive Offi cer; that amount was disbursed in 2018. Please note that the remuneration for the offi ce of member of the Board of Directors, resolved by the Shareholders' Meeting held on 19 May 2016 under Article 2389(1) of the Italian Civil Code for the 2018 fi nancial year, amounting to EUR 27,000, will be disbursed in 2019. It should also be noted that Mr Bono resigned from his offi ce as Chairman of VARD Group AS on 30 September 2016; the VARD remuneration for 2016 (1 January - 29 September 2016) for the offi ce held amounts to SGD 243,750 (EUR 163,333, at the average exchange rate on 22 February 2016 - SGD/EUR = 0.67008) and will be disbursed and entirely transferred by the CEO to Fincantieri in 2019. Finally, it should be noted that the abovementioned remuneration relating to VARD, as well as any other remuneration relating to other controlled and associated Companies, are not included in the total of EUR 950,000 as they were transferred to Fincantieri.
6 The amount refers to the 2017 MBO Plan. On 7 February 2018, the BoD, on the RC's proposal, established that the specifi c conditions for over performance were met in full, consequently establishing the payment of EUR 617,500, disbursed in 2018. Please note that on 20 July 2016, as subsequently confi rmed on 7 May 2018, the BoD, on the RC's proposal, resolved that the short term variable component for 2018 would be EUR 570,000 upon achieving the target objective, with a maximum adjustment of EUR 617,500 for over performance; this amount will be disbursed in the 2019 fi nancial year, once the achievement of the assigned performance objectives is determined. 7 Note that the remunerations relating to the offi ces held in controlled and associated companies in 2018 are not included in the remunerations received by Mr Bono, as they were transferred to Fincantieri (see Note 5).
8 This amount, resolved by the Shareholders' Meeting held on 19 May 2016 and relating to the 2018 fi nancial year, will be disbursed in the 2019 fi nancial year.
9 This amount relating to the 2018 fi nancial year consists of: (i) EUR 20,000 per annum as remuneration for the offi ce of AC member; and (ii) EUR 20,000 per annum as remuneration for the offi ce of SC
member. This amount will be disbursed in the 2019 fi nancial year. 10 This amount relating to the 2018 fi nancial year consists of: (i) EUR 30,000 per annum for the offi ce of ICRMC Chairman; and (ii) EUR 20,000 per annum as remuneration for the offi ce of SC member. This amount will be disbursed in the 2019 fi nancial year.
11 This amount relating to the 2018 fi nancial year consists of: (i) EUR 2,000 per annum for the offi ce of ICRMC member, as a member of the Committee for Transactions with Related Parties, replacing Mr Fabrizio Palermo, if the Committee has to analyse Transactions of Major Relevance; and (ii) EUR 30,000 per annum as remuneration for the offi ce of SC Chairman. This amount will be disbursed in the 2019 fi nancial year.
12 This amount relating to the 2018 fi nancial year consists of: (i) EUR 20,000 per annum for the offi ce of ICRMC member; and (ii) EUR 20,000 per annum as remuneration for the offi ce of SC member. This
amount will be disbursed in the 2019 fi nancial year. 13 This amount relating to the 2018 fi nancial year is for the offi ce of RC Chairman. This amount will be
disbursed in the 2019 fi nancial year. 14 This amount relating to the 2018 fi nancial year consists of: (i) EUR 20,000 per annum for the offi ce of AC member; (ii) EUR 20,000 per annum as remuneration for the offi ce of ICRMC member; and (iii) EUR 20,000 per annum as remuneration for the offi ce of RC member. This amount will be disbursed in the 2019 fi nancial year.
15 This amount relating to the 2018 fi nancial year consists of: (i) EUR 30,000 per annum as AC Chairman; and (ii) EUR 20,000 per annum, as remuneration for the offi ce of RC member. This amount will be disbursed in the 2019 fi nancial year.
16 The amount of the fi xed component reported in the 2018 fi nancial year was disbursed within the same fi nancial year.
17 The amount refers to the 2017 MBO Plan and was disbursed in 2018. The Chief Executive Offi cer verifi ed the achievement of the objectives referred to in the 2017 Plan on the basis of the 2017 fi nancial statements and specifi c cost-reporting. 18 It should be noted that the Shareholders' Meeting resolved on the Auditors' remunerations on 28 May
2014, up until the Board of Statutory Auditors was renewed at the Shareholders' Meeting held on 19 May 2017, which also resolved on the new remunerations.
19 Out of which EUR 1,850,648.02 for Executives with Strategic Responsibilities. Please note that the amount indicated does not include the remuneration received by Key Executives for the offi ces held in the corporate bodies of controlled companies because, in compliance with the Group's policy, those remunerations were transferred to Fincantieri.
20 The aggregate amount of EUR 1,509,699.37 (of which EUR 601,325.89 for Executives with Strategic Responsibilities) refers to the 2017 MBO Plan and was disbursed in 2018. The Chief Executive Offi cer verifi ed the achievement of the objectives referred to in the 2017 Plan on the basis of the 2017 fi nancial statements and specifi c cost-reporting.
21 Out of which EUR 173,102.95 for Executives with Strategic Responsibilities. 22 Out of which EUR 2,336,429 for Executives with Strategic Responsibilities.
The amounts provided in this Table and in the related notes follow accrual and cash criteria, in accordance with the applicable legislation
| Data expressed in EUR | VARIABLE NON-EQUITY REMUNERATION | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NAME AND SURNAME |
OFFICE 1 | OFFICE TERM |
CEASE OF OFFICE |
FIXED REMUNERATION |
REMUNERATION FOR SITTING ON COMMITTEES |
BONUSES AND OTHER INCENTIVES |
PROFIT SHARING |
NON MONETARY BENEFITS |
OTHER REMUNE RATION |
TOTAL | FAIR VALUE OF REMUNERATION 2 |
SALARY PACKAGES FOR END OF OFFICE TERM - TERMINATION OF EMPLOY MENT |
|
| Remunerations Fincantieri |
300,000.00 3 | – | 115,000.00 4 | – | 2,092.32 | – | 417,092.32 | – | – | ||||
| Giampiero Massolo |
BoD Chairman | 01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 300,000.00 | – | 115,000.00 | – | 2,092.32 | – | 417,092.32 | – | – | ||||
| Fincantieri Remunerations |
950,000.00 5 | – | 617,500.00 6 | – | 2,062.20 | – | 1,569,562.20 | 3,272,842.00 | – | ||||
| Giuseppe Bono |
CEO | 01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remuneration Fincantieri companies |
– 7 | – | – | – | – | – | – | – | – |
| Total | 950,000.00 | – | 617,500.00 | – | 2,062.20 | – | 1,569,562.20 | 3,272,842.00 | – | ||||
| Fincantieri Remunerations |
27,000.00 8 | 40,000.00 9 | – | – | – | – | 67,000.00 | – | – | ||||
| Simone Anichini |
Director/Member AC/Member SC |
01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 27,000.00 | 40,000.00 | – | – | – | – | 67,000.00 | – | – | ||||
| Director/ SC Chairman/ SC Member |
01.01.2018 31.12.2018 |
Fincantieri Remunerations |
27,000.00 8 | 50,000.00 10 | – | – | – | – | 77,000.00 | – | – | ||
| Massimiliano Cesare |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – | ||
| Total | 27,000.00 | 50,000.00 | – | – | – | – | 77,000.00 | – | – | ||||
| Director/SC Chairman/CRC Member as Member of the RPT Committee |
01.01.2018 31.12.2018 |
Remunerations Fincantieri |
27,000.00 8 | 32,000.00 11 | – | – | – | – | 59,000.00 | – | – | ||
| Gianfranco Agostinetto |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – | ||
| Total | 27,000.00 | 32,000.00 | – | – | – | – | 59,000.00 | – | – | ||||
| Fincantieri Remunerations |
27,000.00 8 | 40,000.00 12 | – | – | – | – | 67,000.00 | – | – | ||||
| Nicoletta Giadrossi |
Director/CRC and SC Member |
01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 27,000.00 | 40,000.00 | – | – | – | – | 67,000.00 | – | – | ||||
| Fincantieri Remunerations |
27,000.00 8 | 30,000.00 13 | – | – | – | – | 57,000.00 | – | – | ||||
| Paola Muratorio |
Director/ RC Chairman |
01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 27,000.00 | 30,000.00 | – | – | – | – | 57,000.00 | – | – | ||||
| Fincantieri Remunerations |
27,000.00 8 | 60,000.00 14 | – | – | – | – | 87,000.00 | – | – | ||||
| Fabrizio Palermo |
Director RC Member/ CRC Member/ AC Member |
01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 27,000.00 | 60,000.00 | – | – | – | – | 87,000.00 | – | – | ||||
| Fincantieri Remunerations |
27,000.00 8 | 50,000.00 15 | – | – | – | – | 77,000.00 | – | – | ||||
| Donatella Treu |
Director/ AC Chairman/ RC Member |
01.01.2018 31.12.2018 |
Meeting to approve 2018 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 27,000.00 | 50,000.00 | – | – | – | – | 77,000.00 | – | – |
| VARIABLE NON-EQUITY REMUNERATION Data expressed in EUR |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NAME AND SURNAME |
OFFICE 1 | OFFICE TERM |
CEASE OF OFFICE |
FIXED REMUNERATION |
REMUNERATION FOR SITTING ON COMMITTEES |
BONUSES AND OTHER INCENTIVES |
PROFIT SHARING |
NON MONETARY BENEFITS |
OTHER REMUNE RATION |
TOTAL | FAIR VALUE OF REMUNERATION 2 |
SALARY PACKAGES FOR END OF OFFICE TERM - TERMI NATION OF EMPLOYMENT |
|
| Fincantieri Remunerations |
360,350.30 16 | – | 132,338.34 17 | – | 26,853.94 | – | 519,542.58 | 746,162.00 | – | ||||
| Alberto Maestrini |
General Manager 01.01.2018 | 31.12.2018 – | Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – | |
| Total | 360,350.30 | – | 132,338.34 | – | 26,853.94 | – | 519,542.58 | 746,162.00 | – | ||||
| Fincantieri Remunerations |
37,000.00 18 | – | – | – | – | – | 37,000.00 | – | – | ||||
| Gianluca Ferrero |
Board of Statutory Auditors Chairman |
01.01.2018 31.12.2018 |
Meeting to approve 2019 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 37,000.00 | – | – | – | – | – | 37,000.00 | – | – | ||||
| Standing Auditor 01.01.2018 | 31.12.2018 | Meeting to approve 2019 Financial Statements |
Fincantieri Remunerations |
26,000.00 18 | – | – | – | – | – | 26,000.00 | – | – | |
| Fioranna Vittoria Negri |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – | |||
| Total | 26,000.00 | – | – | – | – | – | 26,000.00 | – | – | ||||
| Fincantieri Remunerations |
26,000.00 18 | – | – | – | – | – | 26,000.00 | – | – | ||||
| Roberto Spada |
Standing Auditor 01.01.2018- | 31.12.2018 | Meeting to approve 2019 Financial Statements |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – |
| Total | 26,000.00 | – | – | – | – | – | 26,000.00 | – | – | ||||
| Fincantieri Remunerations |
4,809,687.70 19 | – | 1,509,699.37 20 | – | 430,107.79 21 | – | 6,749,494.86 | 5,258,207.00 22 | – | ||||
| Key Executives |
– | 01.01.2018 31.12.2018 – |
Remunerations from controlled and associated companies |
– | – | – | – | – | – | – | – | – | |
| Total | 4,809,687.70 | – | 1,509,699.37 | – | 430,107.79 | – | 6,749,494.86 | 5,258,207.00 | – |
23 The amount refers to the 2017 MBO Plan and was disbursed in 2018.
24 The amount refers to the 2018 MBO Plan and amounts to EUR 100,000.00, with adjustment up to a maximum of EUR 120,000.00 in the event of over performance; the amount will potentially be paid in 2019, after verifying the achievement of the assigned performance objectives.
25 The amount refers to the 2017 MBO Plan and was disbursed in 2018. 26 The amount refers to the 2018 MBO Plan and amounts to EUR 570,000.00, with adjustment up to a maximum of EUR 617,500.00 in the event of over performance; the amount will
potentially be paid in 2019, after verifying the achievement of the assigned performance objectives. 27 The amount refers to the 2017 MBO Plan and was disbursed in 2018.
28 The amount refers to the 2018 MBO Plan and amounts to EUR 168,712.00 with adjustment up to EUR 181,595.00 in the event of over performance; the amount will potentially be paid in 2019, after verifying the achievement of the assigned performance objectives.
29 The amount refers to the 2017 MBO Plan and was disbursed in 2018; the amount Eur 601,325.89 refers to Executives with Strategic Responsibilities. 30 The amount refers to the 2018 MBO Plan and will potentially be paid in 2019, after verifying the achievement of the assigned performance objectives. EUR 713,539.35 of this amount refers to Executives with Strategic Responsibilities.
31 No information on persons who resigned from offi ce prior to admission of the Company's shares to trading is reported. Note that, under Article 84-quater, paragraph 4, of the Issuers' Regulations, the Remuneration Report includes "the shareholdings held in companies with listed shares and in the companies controlled thereby, by members of the governing and control bodies, by General Managers and by other Executives with Strategic Responsibilities as well as by spouses who are not legally separated and by under-age children, directly or through controlled companies, trustee companies or through an intermediary, as resulting from the shareholders' book, from communications received and from other information acquired by the same members of the governing and control bodies, from General Managers and Executives with Strategic Responsibilities".
Under Schedule No. 7-ter of Annex 3A to the Issuers' Regulations, this includes all persons who during the reference year held the offi ces of members of governing and control bodies, of General Manager or of Executives with Strategic Responsibilities even for a fraction of a year. Accordingly, the certifi cate of ownership and the procedures thereof are also specifi ed.
32 The abovementioned number corresponds to the total shares held on 31 December 2017 by Executives with Strategic Responsibilities identifi ed for the 2018 fi nancial year.
33 The diff erence in the number of shares held on 31 December 2018 compared to 31 December 2017 is due to alternating several Executives in the role of Executive with Strategic Responsibilities during the year under review.
The table below is drafted under Article 84-quater, paragraph 4, of the Issuers' Regulations and of Schedule No. 7-ter of Annex 3A to the Issuers' Regulations. This table includes the list, by name, of the shareholdings held by members of the Board of Directors and of the Board of Statutory Auditors, by the General Manager and, in aggregate form, by Executives with Strategic Responsibilities in Fincantieri and in its controlled companies 31.
| Data expressed in EUR | BONUS FOR THE YEAR | BONUSES FROM PREVIOUS YEARS |
OTHER BONUSES |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|
| NAME AND SURNAME OFFICE | PLAN | DISTRIBUTABLE/ DISTRIBUTED DEFERRED REFERENCE |
PERIOD | NO LONGER DISTRIBUTABLE |
DISTRIBUTABLE/ DISTRIBUTED |
STILL DEFERRED |
||||
| Fincantieri Remunerations |
2017 MBO | – | – | – | 115,000.00 23 | – | – | |||
| Giampiero Massolo |
Chairman BoD |
Remunerations from controlled and associated |
2018 MBO | 120,000.00 24 | – | – | – | – | – | |
| companies Total |
– – |
– 120,000.00 |
– – |
– – |
– – |
– 115,000.00 |
– – |
– – |
||
| Fincantieri Remunerations |
2017 MBO | – | – | – | 617,500.00 25 | – | – | |||
| Giuseppe Bono |
CEO | Remunerations from controlled and associated |
2018 MBO | 617,500.00 26 | – | – | – | – | – | |
| companies Total |
– | – | – | – | – | – | – | – | ||
| – | 617,500.00 | – | – | – | 617,500.00 | – | – | |||
| Fincantieri Remunerations |
2017 MBO | – | – | – | 132,338.34 27 | – | – | |||
| Alberto Maestrini |
General Manager |
Remunerations from controlled and associated |
2018 MBO | 181,595.00 28 | – | – | – | – | – | |
| companies | – | – | – | – | – | – | – | – | ||
| Total | – | 181,595.00 | – | – | – | 132,338.34 | – | – | ||
| Key Executives | Fincantieri Remunerations |
2017 MBO | – | – | – | 1,509,699.37 29 | – | – | ||
| – | Remunerations from controlled and associated |
2018 MBO | 1,681,702.90 30 | – | – | – | – | – | ||
| companies Total |
– | – | – | – | – | – | – | – | ||
| – | 1,681,702.90 | – | – | – | 1,509,699.37 | – | – |
The remunerations listed in this Table refl ect the maximum amount payable; their potential payment during the 2019 fi nancial year and the amount thereof shall be subject to the evaluation by the corporate bodies concerned of achieving the underlying objectives.
| NAME AND SURNAME |
OFFICE | PERIOD IN OFFICE PARTICIPATED | SUBSIDIARIES |
|---|---|---|---|
| Giampiero Massolo |
Chairman BoD 01.01.2018 | ||
| Giuseppe Bono |
CEO | 01.01.2018 | |
| Simone Anichini |
Director | 01.01.2018 | |
| Massimiliano Cesare |
Director | 01.01.2018 | |
| Gianfranco Agostinetto Director |
01.01.2018 | ||
| Nicoletta Giadrossi |
Director | 01.01.2018 | |
| Paola Muratorio |
Director | 01.01.2018 | |
| Fabrizio Palermo |
Director | 01.01.2018 | |
| Donatella Treu |
Director | 01.01.2018 | |
| Gianluca Ferrero |
Chairman Board of Statutory Auditors |
01.01.2018 | |
| Roberto Spada |
Standing Auditor |
01.01.2018 | |
| Fioranna Vittoria Negri |
Standing Auditor |
01.01.2018 | |
| Alberto Maestrini |
General Manager |
01.01.2018 | |
| Executives with Strategic Responsibilities |
– | 01.01.2018 |
| SUBSIDIARIES | NO. OF SHARES HELD AT THE END OF THE 2017 FINANCIAL YEAR |
NO. OF SHARES PURCHASED |
NO. OF SHARES SOLD |
NO. OF SHARES HELD AT THE END OF THE 2018 FINANCIAL YEAR |
|
|---|---|---|---|---|---|
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | Fincantieri | 84,000 | – | – | 84,000 |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 31.12.2018 | – | – | – | – | – |
| 01.01.2018 31.12.2018 |
– | – | – | – | – |
| 01.01.2018 31.12.2018 |
– | – | – | – | – |
| 01.01.2018 31.12.2018 |
– | – | – | – | – |
| 01.01.2018 31.12.2018 |
Fincantieri | 11,000 | – | – | 11,000 |
| 31.12.2018 | Fincantieri | 57,200 32 | – | – | 56,200 33 |
34 The Plan's approval date by the Board of Directors, subsequently approved by the Shareholders' Meeting called on 19 April 2017 to approve the fi nancial statements as at 31 December 2017, on a proposal from the Board of Directors itself.
35 The shares listed correspond to the number that can be attributed based on the target. Note that the shares indicated in the tables attached to the Information Document for the LTI Plans are the maximum number of shares granted.
36 The fair value for the 2016-2018 LTI Plan, fi rst cycle 2016-2018, corresponding to the maximum incentive that can be granted if all performance conditions are met in full, was calculated on the basis of the weighted unit value of the following parameters: 30% of the reference book value for TSR (EUR 0.1293) and 70% of the reference book value for EBITDA (EUR 0.6251); the fair value for the second cycle (2017-2019) of the same 2016-2018 Plan, corresponding to the maximum incentive that can be granted where all performance conditions are met in full, was calculated on the basis of the weighted unit value of the following parameters: 30% of the reference book for TSR (EUR 0.146) and 70% of the reference book value for EBITDA (EUR 0.735); the fair value for the third cycle (2018-2020) of the same 2016-2018 Plan, corresponding to the maximum incentive that can be granted where all performance conditions are met in full, was calculated on the basis of the weighted unit value of the following parameters: 30% of the reference book value for TSR (EUR 0.18261) and 70% of the reference book value for EBITDA (EUR 0.917).
37 This is the weighted average market price of the shares in the fi ve trading days preceding the dates when the Board of Directors resolved on the Plan's fi rst cycle (2016-2018) at the meeting held on 15 December 2016, on the Plan's second cycle at the meeting held on 25 July 2017, and on the Plan's third cycle at the meeting held on 22 June 2018. 38 Date on which the Board of Directors approved the number of rights to assign to the recipients of the 2016-2018 Plan with respect to its third cycle (2018-2020). 39 Of which EUR 777,617 for Executives with Strategic Responsibilities.
40 Of which EUR 730,905 for Executives with Strategic Responsibilities.
41 Of which EUR 752,910 for Executives with Strategic Responsibilities.
42 Of which EUR 827,907 for Executives with Strategic Responsibilities.
Incentive plans based on fi nancial instruments, other than stock options, for Members of the Board of Directors, the General Manager and other Executives with Strategic Responsibilities
| Financial instruments allocated in previous financial years and not vested during the financial year |
Financial instruments allocated during the financial year |
Financial instruments Financial instruments vested vested during during the year and assignable assignable |
Financial instruments relating to the financial year |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and Surname/Office 2016-2018 LTI PLAN 34 | Number and type of financial instruments 35 Vesting Period |
Number and type of financial instruments |
Fair value on granting date 36 |
Vesting Period Granting date | Market price when granted 37 |
Number and type of financial instruments |
Number and type of financial instruments |
Value on accrual date |
Fair Value | |||
| 10 November 2016 (1st cycle 2016-2018) |
2,237,927 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 1,688,292 | |
| Remuneration of CEO in Fincantieri |
10 November 2016 (2nd cycle 2017-2019) |
915,486 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 806,543 |
| 10 November 2016 (3rd cycle 2018-2020) |
– | – | 707,530 | 1.09961 | Approximately 3 years |
22.06.2018 38 | 1.3427 | – | – | – | 778,007 | |
| Remuneration of General Manager in Fincantieri |
10 November 2016 (1st cycle 2016-2018) |
432,988 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 326,646 |
| 10 November 2016 (2nd cycle 2017-2019) |
220,491 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 194,253 | |
| 10 November 2016 (3rd cycle 2018-2020) |
– | – | 204,857 | 1.09961 | Approximately 3 years |
22.06.2018 38 | 1.3427 | – | – | – | 225,263 | |
| 10 November 2016 (1st cycle 2016-2018) |
2,429,514 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 1,832,825 39 | |
| Remuneration of KE + ESR in Fincantieri |
10 November 2016 (2nd cycle 2017-2019) |
1,840,298 shares |
Approximately 3 years |
– | – | – | – | – | – | – | – | 1,621,303 40 |
| 10 November 2016 (3rd cycle 2018-2020) |
– | – | 1,640,654 41 | 1.09961 | Approximately 3 years |
22.06.2018 38 | 1.3427 | – | – | – | 1,804,079 42 | |
| – | – | – | – | 0.7544 | – | – | – | – | – | – | 3,847,764 | |
| Total | – | – | – | – | 0.8810 | – | – | – | – | – | – | 2,622,098 |
| – | – | – | – | 1.09961 | – | – | – | – | – | – | 2,807,349 |
Parent Company Registered offi ce Via Genova no. 1 - 34121 Trieste – Italy Tel: +39 040 3193111 Fax: +39 040 3192305 fi ncantieri.com Share capital Euro 862,980,725.70 Venezia Giulia Company Registry and Tax No. 00397130584 VAT No. 00629440322
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