Remuneration
The Policy is defined so as to align the interests of Management with those of Shareholders, pursuing the priority objective of creating sustainable value, in the medium to long term period, by establishing an actual and verifiable link, between remuneration, on the one hand and the performance of the individuals and Pirelli on the other.
REMUNERATION STRUCTURE
The structure of the Management remuneration, which is defined also on the basis of domestic and International benchmarks prepared by Companies specializing in Executive Compensation, consists of three main elements:
Gross
annual fixed
component
Annual
variable component
(MBO)
medium-to-long
term variable
component (LTI)*
intended for rewarding the performance of Pirelli Group during the 2018-2020 period.
*The LTI plan is a cash plan and, therefore, it does not grant stock-options, but a cash incentive. A part of the abovementioned incentive is linked to the market performance of Pirelli & C. shares.
INVOLVED ENTITIES IN THE “PROCESS” FOR DEFINING AND IMPLEMENTING THE POLICY ON REMUNERATION
Remuneration Committee
- Remuneration Policy proposal to the Board of Directors;
- monitoring the Remuneration Policy implementation: Annual Remuneration Report of the Chief Human Resources Officer;
Board of Statutory Auditors
- Gives opinion on the approval on the Remuneration Policy, in particular in the part regarding the compensation granted to the Directors involving special offices;
- monitoring the Remuneration Policy implementation: Annual Remuneration Report of the Chief Human Resources Officer;
Board of Directors
- Adopts and approve the Remuneration Policy to be submitted to the Annual General Meeting;
- monitoring the Remuneration Policy implementation: the Chairman of the Remuneration Commitee annualy reports on Annual Remuneration Report received from the Chief Human Resources Officer;
Shareholders’ Meeting
- exprime the consultation vote on the Remuneration Policy
Remuneration
of Directors
Pursuant to the Company Bylaws, in addition to reimbursement for expenses incurred in performing their duties, Directors receive annual fees determined by the Shareholders' Meeting. The Shareholders' Meeting held on August 1, 2017 decided - pursuant to Art. 2389, subsection 1, of the Civil Code - to establish a maximum of € 2,000,000 as the total annual remuneration of the Board of Directors, delegating to the Board of Directors the distribution of the same. The Board of Directors, met on August 31, 2017, resolved to distribute the above-mentioned total salary as follow:
| Board Director | a gross annual salary of € 60 thousand |
| Chairman of the Audit, Risks, Sustainability and Corporate Governance Committee | a gross annual salary of € 30 thousand |
| Member of the Audit, Risks, Sustainability and Corporate Governance Committee | a gross annual salary of € 25 thousand |
| Chairman of the Remuneration Committee | a gross annual salary of € 30 thousand |
| Member of the Remuneration Committee | a gross annual salary of € 25 thousand |
| Chairman of the Strategies Committee | a gross annual salary of € 50 thousand |
| Member of the Strategies Committee | a gross annual salary of € 30 thousand |
| Chairman of the Appointments and Successions Committee | a gross annual salary of € 50 thousand |
| Member of the Appointments and Successions Committee | a gross annual salary of € 30 thousand |
| Chairman of the Related-Parties Committee | a gross annual salary of € 60 thousand |
| Member of the of the Related-Parties Committee | a gross annual salary of € 40 thousand |
| Director in charge of sustainability matters | a gross annual salary of € 70 thousand |
The residual amount can be used at a later date for new governance solutions eventually adopted by the Company. Pirelli adopted a Remuneration Policy which contains the guidelines for the definition of the Executive Directors’ and Management’s remuneration.
EXECUTIVE VICE CHAIRMAN
AND CEO REMUNERATION
Following the structure of the compensation package of the Executive Vice Chairman and CEO in case of achievement of the MBO annual objectives for 2018, 2019 and 2020 and the three-year objectives of the LTI Plan 2018-2020 (i) at the Access Threshold, (ii) at target and (iii) at maximum level is reported below:
Executive vice chairman
and ceo - entry level
Executive vice chairman
and ceo - target
Executive vice chairman
and ceo - max
MBO
Fixed
LTI
KEY MANAGERS
REMUNERATION
The structure of the compensation package of the Managers with strategic responsibilities in case of achievement of the MBO annual objectives for 2018, 2019 and 2020 and the three-year objectives of the LTI Plan 2018-2020 (i) at the Access Threshold, (ii) at target and (iii) at maximum level is reported below:
MANAGERS WITH STRATEGIC
RESPONSIBILITIES - ENTRY LEVEL
MANAGERS WITH STRATEGIC
RESPONSIBILITIES - TARGET
MANAGERS WITH STRATEGIC
RESPONSIBILITIES - MAX
MBO
Fixed
LTI
Remuneration of the
Board of Statutory Auditors
The Remuneration of the BoSA is established by the Shareholders’ Meeting as a fix annual sum. In particular, during year 2018, in occasion of the Renewal of the Board of Statutory Auditors, the Remuneration has been set as follow*:
| Chairman | 75 thousand € annual gross salary |
| Standing Members | 50 thousand € annual gross salary |
| Member of the Supervisory Body | 40 thousand € annual gross salary |
*the Auditors are entitled to be refunded of the costs incurred due to their office.
Shareholdings
SHAREHOLDINGS OF THE MEMBERS OF THE ADMINISTRATIVE AND CONTROL BODIES AND GENERAL MANAGERS
| Surname and first name | Position |
Company in
which share
is held |
No of shares held at 31/12/2016 | No of shares purchased/ underwritten | No of shares sold | No of shares held at 31/12/2017 |
| Giorgio Luca Bruno | Director | Pirelli & C. | 0 | 500* | - | 500 |
* Shares purchased at the listing of the Company on 4 October 2017
SHAREHOLDINGS OF OTHER EXECUTIVES WITH STRATEGIC RESPONSIBILITIES
|
Number of Key Managers |
Company in which share is held |
No of shares held at 31/12/2016 | No of shares purchased/ underwritten | No of shares sold | No of shares held at 31/12/2017 | |
| - | - | - | - | - | - | - |
DOCUMENTATION
Remuneration Policy 2018
Please find below the Remuneration Policy 2018: which has received a favourable opinion by the AGM during the meeting held on May 15, 2018.
Download the pdf - 1,37MBRemuneration Statement 2017
The Remuneration Statement illustrates the policy that the Pirelli Group implemented during the year 2017 in connection with the remuneration and provides a final statement of it in connection with the different types of beneficiary parties, without prejudice to the obligations of transparency provided by other applicable provisions of law or regulations.
Download the pdf - 96KBDisclosure document
Pirelli adopted a 2018-2020 three-year monetary incentive plan for the Management of the Pirelli Group ("LTI Plan"). The LTI Plan sets out, inter alia, that part of the incentive is to be determined on the basis of the Total Shareholder Return objectives calculated with respect to Pirelli’s performance and with respect to an index composed by a selected panel of "peers" belonging to the Tyre sector. Referring to the part that is linked to the performance of the value of the Pirelli share, the LTI Plan has been approved by the AGM during the meeting held on May 15, 2018.
Download the pdf - 96KB