Remuneration
The Remuneration Policy adopted by Pirelli & C. (“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
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
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.
ANNUAL VARIABLE COMPONENT (STI)
The STI component, except for specific cases, is extended to 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 annual variable 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 2024 (see §2).
MEDIUM-LONG TERM VARIABLE COMPONENT (LTI)
The medium-long term variable remuneration (LTI) is assigned to 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 the LTI Plan for at least one full financial year and the incentive percentages are scaled to the number of months of actual participation in the LTI Plan. The LTI plans are intended to: (i) link Management remuneration with the medium-long term performance of the Group, (ii) promote the creation of shareholder value and sustainable success for the Company, (iii) align the interests of shareholders with those of Management, and (iv) promote Management retention.
In particular, the LTI plans assign each beneficiary an incentive opportunity equal to a percentage of the gross annual base fixed component in place in the first year of the plan. 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 provide for the assignment of shares or options on stocks, but only a cash incentive partly linked to the market performance of Pirelli & C.’s shares in comparison with a panel of Tier 1 peers.
The “rolling” mechanism, introduced with the 2020-2022 LTI Plan, guarantees flexibility by ensuring that, for each three-year period, the performance indicators are aligned with the evolution of the market and the Company and, therefore, the Company’s strategic plans.
For further information, please see the Remuneration Policy for year 2024 (see §2).
NON-MONETARY BENEFITS
Lastly, non-monetary elements of remuneration are benefits 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 (e.g. accommodation and student grants for limited periods of time).
STAKEHOLDERS IN THE “PROCESS” OF POLICY PREPARATION, ADOPTION AND IMPLEMENTATION
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 KMs 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 RPT 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 KMs, within the limits and according to the criteria allowed by the 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, including the part regarding the remuneration of Directors holding specific offices;
- Supervises the Remuneration Policy application: the Chairman of the Remuneration Committee annually reports on Annual Remuneration Report received from Chief Human Resources Officer & Organization.
Board of Directors
- Upon proposal of the Remuneration Committee, annually approves the Remuneration Policy to be submitted to the Shareholders’ Meeting;
- Supervises 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
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 has been subsequently allocated by the Board of Directorson held on 3 August 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
Please see paragraph 4 of the Remuneration Report on remuneration policy for 2024 for the structure of the compensation package of the Directors with specific offices.
GENERAL MANAGERS AND
KEY MANAGERS REMUNERATION
Please see paragraph 5 of the Remuneration Report on remuneration policy for 2024 for the structure of the compensation package of the General Managers and KMs.
Remuneration of the
Board of Statutory Auditors
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 28 May 2024, together with the renewal of the Board of Statutory Auditors, resolved to establish the following remuneration for the years 2024, 2025 and 2026 until termination of office with the approval of the financial statements as at 31 December 2026*.
| REMUNERATION OF THE BOARD OF STATUTORY AUDITORS | |
|---|---|
| POSITION | REMUNERATION |
| Chairman | 135 thousand € annual gross salary |
| Statutory Auditors | 95 thousand € annual gross salary |
* Expenses incurred for official reasons are also reimbursed to the Statutory Auditors.
Shareholdings
SHAREHOLDINGS OF THE MEMBERS OF THE ADMINISTRATIVE AND CONTROL BODIES AND GENERAL MANAGERS*
| First and last name | Office |
Investee company |
No of shares held at 31/12/2022 | No of shares purchased/ underwritten | No of shares sold | No of shares held at 31/12/2023 |
| Marco Tronchetti Provera (i) | Executive Vice President | Pirelli & C. | 140.959.399 | - | - | 140.959.399 |
| Giorgio Luca Bruno | Director | Pirelli & C. | 500 (ii) | - | - | 500 (ii) |
(i) Shares held by the indirect subsidiary Camfin S.p.A..
(ii) Shares purchased during the listing of the Company on 4 October 2017 and held on the date of termination of office (31 July 2023).
*Information from the Report on the remuneration policy and compensation paid in the Annual Report 2023.
EQUITY INVESTMENTS OF OTHER KEY MANAGERS
|
Number of Key Managers |
Investee company | No of shares held at 31/12/2022 | No of shares purchased/ underwritten | No of shares sold | No of shares held at 31/12/2023 | |
| - | - | - | - | - | - | - |
DOCUMENTATION
- Section I: “Remuneration Policy” for Financial Year 2024, approved by the Shareholders’ Meeting on 28 May 2024, that defines the principles and guidelines for the 2024 financial year: (i) for determining the remuneration of the Company Directors, in particular Directors holding specific offices, General Managers and KMs, 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 Remuneration Policy for 2024: (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 2023, submitted for the advisory vote of the Shareholders’ Meeting held on 28 May 2024, which sets out the policy implemented by the Pirelli Group during the 2023 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.
THE REMUNERATION REPORT ON REMUNERATION POLICY FOR 2024 AND COMPENSATION PAID IN 2023
The Remuneration Report on remuneration policy for 2024 and compensation paid in 2023 is structured into two sections:
Please find below the Report on remuneration policy for 2024 and compensation paid in 2023.
Download the pdf - 674KBDISCLOSURE DOCUMENT LTI PLAN (CYCLE 2024-2026)
Pirelli adopted a 2024-2026 Long-Term Incentive Plan for the Management of the Pirelli Group ("LTI plan"), approved by the Board of Directors of Pirelli & C. on 6 March 2024 and by the Shareholders’ Meeting on 28 May 2024 with regard to the part of the incentive that shall be determined on the basis of Pirelli’s shares performance. The 2024-2026 LTI Plan is also included in the Report on the Remuneration Policy for 2024, 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 6 March 2024 the objectives of the 2024-2026 LTI Plan.
Below is the “Disclosure document”.
Download the pdf - 108KBDISCLOSURE 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 the Remuneration 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 - 584KBDISCLOSURE 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 the Remuneration Policy for 2023, 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.
Below is the “Disclosure document”.
Download the pdf - 584KBFor the reports published with reference to previous years, click here.