Remuneration

The Remuneration Policy adopted by Pirelli (“Policy”) has been defined in line with the European Commission recommendations on the remuneration of directors of listed companies, as well as the recommendations on remuneration adopted by the Corporate Governance Code. The Policy aims to achieve long-term interests, thereby contributing to the achievement of strategic objectives and sustainable growth of the company as well as bringing the interests of the Management into line with those of the shareholders.

The Policy, based on the principle of the pay for performance, has been defined in order to contribute to the company strategy, the pursuit of long-term interests and the sustainable success of Pirelli & C., to have, retain and motivate people with the expertise and professional standing required by the role held in the Company, as well as to indicate the purposes, methods of operation and the beneficiaries of the remuneration and the bodies involved and the procedures used for its adoption and implementation.

REMUNERATION STRUCTURE

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The structure of the Management remuneration, which is defined also on the basis of domestic and international benchmarks prepared by companies specialized in executive compensation and shared also with the Remuneration Committee, consists of four main elements:

Gross
annual fixed
component (GABS)

Annual
variable component
(STI)

medium-long
term variable
component (LTI)

non-monetary
benefits

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    GROSS ANNUAL FIXED COMPONENT (GABS)

    The fixed component shall be established on the basis of the complexity of the position, professional seniority, skills required to the individual to act in the role, the performance achieved over time, as well as the trend in the comparison remuneration market related to the position held by the individual.

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    ANNUAL VARIABLE COMPONENT (STI)

    The STI plan, except for specific cases, covers all the Management - except for the Chairman -, and is intended to reward the beneficiaries’ short term performance; moreover, it can be extended to managers who joined the Group during the year.

    The accrual of the variable annual component is subject to the achievement of a financial condition of access (so-called “on/off”).

    For further information, please see the Remuneration Policy for year 2023 (see §2).

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MEDIUM-LONG TERM VARIABLE COMPONENT (LTI)

The LTI plan is assigned to the Top Management – except for the Chairman – and extended, except in specific cases, to all Executives whose grade, determined with the Korn Ferry method, is equal to or above 20. It is also assigned to those who, during the three-year period, join the Group and/or take over, due to internal career progression, the position of Executive. In this case, their inclusion is subject to participation in each three-year cycle for at least one full financial year and the incentive percentages are scaled to the number of months of actual participation in the plan. The medium-long term incentive plans are intended to: (i) link Management remuneration with the medium-long term performance of the Group; (ii) promote the creation of value for the shareholder and of sustainable success for the Company, and (iii) align the interests of shareholders with those of Management, (iv) generate an effective Management retention effect.

In particular, the LTI plans assign each beneficiary an incentive opportunity (the “LTI Bonus”), equal to a percentage of the gross annual base fixed component (GABS) in place on the date on which participation in the LTI plan is established. This incentive percentage increases in relation to the position held and takes into account the benchmarks for each role.

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.’s shares in comparison with a panel of selected companies operating in the Tyre sector.

The “rolling” mechanism introduced with the 2020-2022 LTI Plan aim to: guarantee a high degree of flexibility, bringing the performance indicators into line with the evolution of the market and Company and, therefore, the Company’s strategic plan for each new three-year cycle.

For further information, please see the Remuneration Policy for year 2023 (see §2).

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NON-MONETARY BENEFITS

Lastly, non-monetary elements of remuneration are provided to beneficiaries, depending on the position held, as a result of contractual provisions/Company policies or aimed at reinforcing attraction during the recruitment phase (for example, accommodation and student grants for limited periods of time).

STAKEHOLDERS IN THE “PROCESS” OF POLICY PREPARATION, ADOPTION AND IMPLEMENTATION

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Remuneration Committee

  • assists the Board of Directors with preparing the Group Remuneration Policy, assessing its overall consistency;
  • with regard to the Executive Directors, other Directors holding specific offices and General Managers, it expresses opinions to the Board:
    • about their remuneration, in compliance with the Remuneration Policy;
    • about setting performance objectives linked to the variable element of that remuneration;
    • about the definition of any no-competition agreements;
    • about the definition of any agreements for the termination of working relationships, on the basis of the principles established in the Remuneration Policy;
  • monitors the correct application of the Remuneration Policy and checks the actual achievement of performance objectives;
  • checks the conformity of the remuneration of the executive directors, other directors holding specific offices, general managers and key managers with the Remuneration Policy and expresses an opinion on this, where required by the relative procedure adopted within the company, also in accordance with the Related Party Transaction Procedure;
  • helps the Board of Directors to examine proposals to the Shareholders’ Meeting for the adoption of compensation plans based on financial instruments;
  • monitors application of the decisions adopted by the Board of Directors, checking in particular the effective achievement of the established performance objectives;
  • examines and submits the Remuneration Report to the Board of Directors;
  • in any case, provides opinions in relation to transactions with related parties on matters concerning the remuneration of executive directors, including directors holding specific offices, General Managers and executives with strategic responsibilities, within the limits and according to the criteria allowed by the procedure on transactions with related parties adopted by the Company ("RPT Procedure");
  • assesses whether there are exceptional circumstances that allow for a derogation from the Remuneration Policy.

Board of Statutory Auditors

  • Expresses opinion on the Remuneration Policy, in particular, in the part regarding the remuneration granted to the Directors holding specific offices;
  • Monitoring the Remuneration Policy implementation: Annual Remuneration Report of the Chief Human Resources Officer & Organization.

Board of Directors

  • Upon proposal of the Remuneration Committee, annually approves the Remuneration Policy to be submitted to the Annual General Meeting;
  • Monitoring the Remuneration Policy implementation: the Chairman of the Remuneration Committee annually reports on Annual Remuneration Report received from  Chief Human Resources Officer & Organization.

Shareholders’ Meeting

  • At the time of appointment, determines the gross annual remuneration payable to the members of the Board of Directors and the Board of Statutory Auditors, excluding the remuneration of Directors holding specific offices;
  • Approves the Policy;
  • Expresses the consultation vote on the Report on Compensation paid.

RELATED-PARTIES TRANSACTIONS COMMITTEE

  • Expresses the relevant opinions, in the cases envisaged by law and the procedures for related-parties transactions adopted by the Company in implementation of the CONSOB regulation in force pro-tempore.

Remuneration
of Directors

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DIRECTORS WITH SPECIFIC
OFFICES REMUNERATION

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GENERAL MANAGERS AND
KEY MANAGERS REMUNERATION

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Remuneration of the
Board of Statutory Auditors

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Remuneration
of Directors

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Pursuant to Art. 2389 of the Italian civil code, the Shareholders’ Meeting of Pirelli held on 31 July 2023 resolved to recognize in favour of the Board of Directors, for the years 2023, 2024 and 2025 and until termination of office with the approval of the financial statements as at 31 December 2025, a gross annual remuneration equal to maximum euro 2,500,000, to be allocated among its members in accordance with the resolutions adopted by the Board of Directors on this matter - excluding the remuneration established by the Board of Directors for the Directors holding specific offices*. The gross annual remuneration established by the Shareholders’ Meeting in euro 2,500,000 has been subsequently allocated by the Board of Directorson August 3, 2023.

REMUNERATION OF DIRECTORS
CORPORATE BODY POSITION REMUNERATION
Board of Directors Director 75,000 Euro
Audit, Risks and Corporate Governance Committee Chairman 40,000 Euro
Member 35,000 Euro
Remuneration Committee Chairman 40,000 Euro
Member 35,000 Euro
Strategies Committee Chairman 50,000 Euro
Member 35,000 Euro
Appointments and Succession Committee Chairman 35,000 Euro
Member 25,000 Euro
Related-Party Transactions Committee Chairman 65,000 Euro
Member 45,000 Euro
Sustainability Committee Chairman 50,000 Euro
Member 35,000 Euro

The residual amount can be used at a later date for new governance solutions eventually adopted by the Company.

For sake of completeness, the remuneration assigned to the members of the Supervisory Body is not included in the total gross annual remuneration defined by the Shareholders’ Meeting.

Supervisory Body Chairman 70,000 Euro
Member 50,000 Euro

DIRECTORS WITH SPECIFIC
OFFICES REMUNERATION

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Please see paragraph 4 of the Remuneration Report on remuneration policy for 2023 for the structure of the compensation package of the Directors With Specific Offices.

GENERAL MANAGERS AND
KEY MANAGERS REMUNERATION

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Please see paragraph 5 of the Remuneration Report on remuneration policy for 2023 for the structure of the compensation package of the General Managers and KM.

Remuneration of the
Board of Statutory Auditors

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The remuneration of the Board of Statutory Auditors is established by the Shareholders’ Meeting as a fixed annual sum, that is adequate in terms of the skills, professionalism and effort required by the importance of the role held and the dimensional and sectoral characteristics of the company. In particular, the Shareholders’ Meeting held on 15 June 2021, together with the renewal of the Board of Statutory Auditors, resolved to establish the following remuneration for the years 2021, 2022 and 2023 until termination of office with the approval of the financial statements as at 31 December 2023*.

REMUNERATION OF THE BOARD OF STATUTORY AUDITORS
POSITION REMUNERATION
Chairman 90 thousand € annual gross salary
Statutory Auditors 75 thousand € annual gross salary
Statutory Auditor member of the SB 50 thousand € annual gross salary

* Expenses incurred for official reasons are also reimbursed to the Statutory Auditors.

Shareholdings

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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 31/12/2021 No of shares purchased/ underwritten No of shares sold No of shares held at 31/12/2022
Marco Tronchetti Provera (i) Executive Vice President and CEO Pirelli & C. 100.959.399 40.000.000 (ii) - 140.959.399 (iii)
Giorgio Luca Bruno Director Pirelli & C. 500 (iv) - - 500 (iv)

(i) Shares held by the indirect subsidiary Camfin S.p.A..
(ii) Shares acquired by Camfin S.p.A. on 7 October 2021 following the completion of the share capital increase of Camfin S.p.A. fully subscribed by Longmarch Holding S.a.r.l. through the contribution of 40,000,000 Pirelli shares.
(iii) For the sake of completeness, it should be noted that Camfin S.p.A. informed the market that it had taken out instruments called “Call Spreads” with major financial institutions, the original maturity of which was extended from September 2022 to September 2023, on 29 June 2021, with an underlying equivalent to approximately 4.6% of Pirelli’s share capital.
(iv) Shares purchased in when the Company was listed on 4 October 2017.

*Information from the Report on the remuneration policy and compensation paid in the Annual Report 2022.

EQUITY INVESTMENTS OF OTHER KEY MANAGERS

Number of
Key Managers
Company in which share is
held
No of shares held at 31/12/2021 No of shares purchased/ underwritten No of shares sold No of shares held at 31/12/2022
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DOWNLOAD THE PDF

DOCUMENTATION

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    THE REMUNERATION REPORT ON REMUNERATION POLICY FOR 2023 AND COMPENSATION PAID IN 2022

    The Remuneration Report on remuneration policy for 2023 and compensation paid in 2022 is structured into two sections:

  • Section I: “Remuneration Policy” for Financial Year 2023, approved by the Shareholders’ Meeting on 31 July 2023, that defines the principles and guidelines for the 2023 financial year: (i) for determining the remuneration of the Company Directors, in particular Directors holding specific offices, General Managers and KM, as well as, without prejudice to the provisions of Art. 2402 of the Italian Civil Code, for determining the remuneration of members of the controlling body; (ii) to which Pirelli & C. refers in defining the remuneration of Senior Managers and, more generally, Group Executives. The 2023 Policy: (i) sets out its contribution to the company strategy, the pursuit of long-term interests and the sustainable success of Pirelli & C., understood as the creation of long term value to the benefit of shareholders, taking into account the other relevant stakeholders of the Company; (ii) also takes account of the need to have, retain and motivate people with the expertise and professional standing required by the role held in the Company; and (iii) indicates the purposes, methods of operation and the beneficiaries of the remuneration, as well as the bodies involved and the procedures used for its adoption and implementation.
  • Section II: “Report on Compensation Paid” in Financial Year 2022, submitted for the advisory vote of the Shareholders’ Meeting held on 31 July 2023, which sets out the policy implemented by the Pirelli Group during the 2022 financial year with regard to remuneration and provides information on the final remuneration of the various categories of beneficiaries, without prejudice to the transparency obligations contained by other applicable legal or regulatory provisions.
  • Please find below the Report on remuneration policy for 2023 and compensation paid in 2022.

    Download the pdf - 1.4MB

    DISCLOSURE DOCUMENT LTI PLAN (CYCLE 2023-2025)

    Pirelli adopted a 2023-2025 Long-Term incentive plan for the Management of the Pirelli Group ("LTI plan"), approved by the Board of Directors of Pirelli & C. on 5 april 2023 and by the Shareholders’ Meeting on 31 July 2023 with regard to the part of the incentive that shall be determined on the basis of Pirelli’s shares performance. The 2023-2025 LTI Plan is also included in the Report on theremuneration policy for 2023, approved by the Shareholders' Meeting on that same date.

    In application of the “rolling” mechanism introduced with the 2020-2022 LTI Plan, the Board of Directors of Pirelli & C. defined on 5 April 2023 the objectives of the 2023-2025 LTI Plan.

    Below is the “Disclosure document”.

    Download the pdf - 584KB

    DISCLOSURE DOCUMENT LTI PLAN (CYCLE 2022-2024)

    Pirelli adopted a 2022-2024 Long-Term incentive plan for the Management of the Pirelli Group ("LTI plan"), approved by the Board of Directors of Pirelli & C. on 17 March 2022 and by the Shareholders’ Meeting on 18 May 2022 with regard to the part of the incentive that shall be determined on the basis of Pirelli’s shares performance. The 2022-2224 LTI Plan is also included in the Report on theremuneration policy for 2022, approved by the Shareholders' Meeting on that same date.

    In application of the “rolling” mechanism introduced with the 2022-2024 LTI Plan, the Board of Directors of Pirelli & C. defined on 17 March 2022 the objectives of the 2022-2024 LTI Plan, in support of the Strategic Plan 2021-2022/2025.

    Below is the “Disclosure document” published on 13 April 2022.

    Download the pdf - 584KB

    DISCLOSURE DOCUMENT LTI PLAN (CYCLE 2021-2023)

    Pirelli adopted a 2021-2023 Long-Term incentive plan for the Management of the Pirelli Group ("LTI plan"), approved by the Board of Directors of Pirelli & C. on 31 March 2021 and by the Shareholders’ Meeting on 15 June 2021, in the part in which it is also based on the performance of Pirelli stock. Moreover, the LTI 2021-2023 Plan is included in the Remuneration Policy for the year 2021, approved by the Shareholders' Meeting on the same date.

    On 17 March 2022, the Board of Directors examined and approved certain amendments and additions to the Disclosure document published on 20 April 2021. The most recent amendments made by the Board of Directors take into account (i) the appointment of the Deputy-CEO, (ii) significant updates made to the Company's ownership and organisational structure and remuneration system, and (iii) the consideration of any negative effects caused by the worsening geopolitical and macroeconomic scenario of reference.

    The amendments to the LTI Plan 2021-2023 - were approved by the Shareholders' Meeting of 18 May 2022; moreover, these amendments and additions were included in the Remuneration Policy for the year 2022 approved by the Shareholders' Meeting on the same date.

    Below is the “Disclosure document” as amended by the Board of Directors on 17 March 2022 and published on 13 April 2022.

    Download the pdf - 562KB

For the reports published with reference to previous years, click here.

Last revised: 13 Set 2023