Remuneration

The Remuneration Policy adopted by Pirelli (“Policy”) has been defined in line with the recommendations provided by the Corporate Governance Code. The Policy aims to attract, retain and motivate persons with the professional qualities required to pursue the objectives of the Company.

The Policy, based on the principle of the pay for performance, has been defined also in order 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

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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 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.

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    GROSS ANNUAL FIXED COMPONENT

    The fixed component shall be established on the basis of the significance of the position, professional seniority, skills required to the individual to act in the role, or on the basis of the liabilities, of the performance achieved over time, as well as the performance of the package of comparison relating to the position held by the individual.

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    ANNUAL VARIABLE COMPONENT (MBO)

    The MBO plan is extended to the whole Management and is directed to reward performance of the beneficiary in the short term.

    The accrual of the variable annual component is subject to the achievement of a financial condition of access (so-called “on/off”), defined in relation to the role covered by the beneficiary.

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    MEDIUM-TO-LONG TERM VARIABLE COMPONENT (LTI)

    The LTI plan is extended to the whole Management (without prejudice to specific cases such as, for example, the Manager of the Internal Audit Department) and it is directed to reward the performance of the period 2018-2020 of Pirelli Group.

    In particular, the plan provides for an incentive subject to the achievement of multiannual objectives and determined as a percentage of the gross annual fixed remuneration perceived by the beneficiary at the date on which the participation of this latter in the plan was established. This incentive percentage grows in relation to the role and takes account of the reference benchmark of 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. shares.

CORPORATE BODIES INVOLVED IN THE “PROCESS” FOR DEFINING AND IMPLEMENTING THE POLICY ON REMUNERATION

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Remuneration Committee

Board of Statutory Auditors

  • Expresses opinion on the Remuneration Policy, in particular, in the part regarding the remuneration granted to the Executives with strategic responsibilities;
  • 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 Commitee annualy reports on Annual Remuneration Report received from the 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, excluding the remuneration of Directors with specific responsibilities;
  • Expresses the consultation vote on the Policy.

Remuneration
of Directors

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EXECUTIVE VICE CHAIRMAN
AND CEO REMUNERATION

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GENERAL MANAGER
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 1 August 2017 resolved to recognize in favour of the Board of Directors a gross annual remuneration equal to maximum euro 2,000,000, to be allocated among its members in accordance with the resolutions adopted by the Board of Directors on this matter, other than the remuneration established by the Board of Directors for the Directors with specific responsibilities*. The gross annual remuneration established by the Shareholders’ Meeting in euro 2,000,000 has been subsequently allocated by the Board of Directors as follows:

REMUNERATION OF DIRECTORS
CORPORATE BODY POSITION REMUNERATION
Board of Directors Director 60,000 Euro
Audit, Risks, Sustainability and Corporate Governance Committee Chairman 30,000 Euro
Member 25,000 Euro
Remuneration Committee Chairman 30,000 Euro
Member 25,000 Euro
Strategies Committee Chairman 50,000 Euro
Member 30,000 Euro
Appointments and Succession Committee Chairman 50,000 Euro
Member 30,000 Euro
Related-Party Transactions Committee Chairman 60,000 Euro
Member 40,000 Euro
Supervisory Body Chairman 60,000 Euro
Member 40,000 Euro

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

* For further information on the remuneration of the Directors with specific responsibilities, please see section 4 of the Remuneration Policy for year 2019. The remuneration of the Chairman of the Board of Directors is represented by an annual gross remuneration of euro 400,000.

EXCUTIVE VICE PRESIDENT
AND CEO REMUNERATION

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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 president
and ceo - entry level

Executive vice president
and ceo - target

Executive vice president
and ceo - max

MBO

Fixed

LTI

GENERAL MANAGER
AND KEY MANAGERS REMUNERATION

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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:

GENERAL MANAGER - ENTRY LEVEL

GENERAL MANAGER - TARGET

GENERAL MANAGER - MAX

EXECUTIVES WITH STRATEGIC
RESPONSIBILITIES - ENTRY LEVEL

EXECUTIVES WITH STRATEGIC
RESPONSIBILITIES - TARGET

EXECUTIVES WITH STRATEGIC
RESPONSIBILITIES - MAX

Gross annual fixed remuneration

Short term variable remuneration

Long term variable remuneration

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 fix annual sum. In particular, the Shareholders’ Meeting held on 15 May 2018, together with the renewal of the Board of Statutory Auditors, resolved to establish the following remuneration for the three-year period 2018-2020*:

REMUNERATION OF THE BOARD OF STATUTORY AUDITORS
POSITION REMUNERATION
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

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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 31/12/2017 No of shares purchased/ underwritten No of shares sold No of shares held at 31/12/2018
Giorgio Luca Bruno Director Pirelli & C. 500(1) - - 500(1)
Marco Tronchetti Provera (2) Executive Vice President and CEO Pirelli & C. - 114,141,546 (3) 13,618,984 (4) 100,522,562

(1) shares purchased when the Company was listed on 4 October 2017.
(2) shares held by the indirectly controlled company Camfin S.p.A., which has directly carried out all the operations indicated.
(3) of which no. 113,491,546 shares assigned to Camfin S.p.A. following the effectiveness of the full demerger of Marco Polo International Italy S.p.A.
(4) assigned to MM Tyre S.r.l. following the effectiveness of the partial and non-proportional demerger of Camfin S.p.A. in favour of Manzoni S.r.l.

*Information extracted by the Annual Report 2018

SHAREHOLDINGS OF OTHER EXECUTIVES WITH STRATEGIC RESPONSIBILITIES

Number of
Key Managers
Company in which share is
held
No of shares held at 31/12/2017 No of shares purchased/ underwritten No of shares sold No of shares held at 31/12/2018
- - - - - - -

DOCUMENTATION

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    Remuneration Policy 2019

    Please find below the Remuneration Policy 2019, which was submitted to the examination and advisory vote of the Shareholders’ Meeting on May 15, 2019

    Download the pdf - 118KB

    Remuneration Statement 2018

    The Remuneration Report illustrates the policy that Pirelli Group implemented during 2018 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 - 271KB

    Disclosure 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

 

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

Last revised: 21 May 2019