Directors' remuneration
2020 Remuneration Policy Guidelines
Fixed Remuneration Enhances the responsibilities, the skills and the contribution demanded by the position. Ensures attraction and retention through continuous market benchmarking. Remunerates the activity carried out in the event that the variable component is not paid out. | |
Executive Deputy Chairman | Chief Financial Officer |
Both roles receive an annual compensation, as members of the Board of Directors, and an annual remuneration for their role as Executive Directors. The amount of remuneration is determined through a benchmark of the posts held by them within a peer group consisting of FTSE MIB and MID CAP companies in the industrial sector comparable to ERG in terms of capitalisation, shareholder structure, distribution of powers and complexity. | |
General Manager | Other Executives with Strategic Responsibilities |
Annual earnings, from employment. The benchmark is carried out on the basis of a sample made up of companies that operate on the Italian market in non-financial markets. | Annual earnings, from employment. The benchmark is carried out on the basis of salary surveys for executive roles in companies that operate on the Italian market. |
Short-term variable remuneration (MBO) Aimed at the achievement of economic, financial and strategic targets, predetermined, measurable and in line with the budget. | |
Executive Deputy Chairman | Chief Executive Officer |
Not envisaged | Not envisaged |
General Manager | Other Executives with Strategic Responsibilities |
MBO System: 100% cash Sustainability Clause2: ON/OFF Company target Clawback Clause: exercisabile within 3 years Company Target 30% EBT Target score <50% nothing is owed Target score >150% 150% of the target bonus is owed Personal Target 70% targets (Economic, Operational, Financial, Business development and/or specific projects) Target score <80% nothing is owed Target score >120% 120% of the target bonus is owed | MBO System: 100% cash Sustainability Clause2: ON/OFF Company target Clawback Clause: exercisabile within 3 years Company Target 30% EBT Target score <50% nothing is owed Target score >150% 150% of the target bonus is owed Personal Target 70% targets (Economic, Operational, Financial, Business development and/or specific projects) Target score <80% nothing is owed Target score >120% 120% of the target bonus is owed |
Long-Term Variable Remuneration (LTI) Aimed at aligning the interests of the beneficiaries with the pursuit of the priority objective of the creation of sustainable value for the shareholders over the medium/long term. Contributes to the strategy of ensuring the Company's sustainability over time, incentivising management to achieve strategic results, consistent with the specific objectives of the 2018-2022 Business Plan, with the prospect of sustainable success. | |||
Executive Deputy Chairman3 | Chief Executive Officer3 | General Manager | Other Executives with strategic responsibilities |
2018–2020 Performance Share System Performance indicator ON/OFF: 90% expected cumulated EBITDA for three-year period 2018-20204 Clawback clause: exercisable within 3 years Single awarding at plan inception, with three-year vesting. At the end of the plan p/sh ERG < EUR 16 p/sh ("Target Price"): Shares assigned = 100% Shares allocated p/sh ERG > EUR 21 p/sh ("Cap Price"): Shares assigned = 200% Shares allocated p/sh ERG <> between Target Price and Cap Price: Shares allocated following a linear incentive strategy. |
2 The variable remuneration referred to the company target will not be paid out, for the reference year, regardless of the corporate performances recorded, if there is a fatal accident involving a Group employee or an accident causing a level of permanent disability greater or equal to 46%.
3 As Executive Directors with a strategic importance for the purposes of the achievement of the 2018-2022 Business Plan.
4 Press release issued on 8 March 2018 in the context of the presentation to the Market of the 2018-2022 Business Plan.
Non-monetary benefits In a Total Reward approach, the compensation package is integrated with benefits, mainly in the form of pension and social security. | |||
Executive Deputy Chairman | Chief Executive Officer | General Manager | Other Executives with strategic responsibilities |
Medical assistance and insurance coverage against the risk of death and disability (which are subtracted from the annual compensation) Company car for mixed use | Medical assistance Insurance policies for the risk of death and disability Company car for mixed use |
SUSTAINABILITY INDICATORS
ERG believes that the full compatibility of its activities with the health and safety of the workers and the safeguard of communities, natural resources and the environment is an essential requirement to make its plants and operations acceptable and to achieve its growth objectives.
Therefore, ERG is committed to ensuring that all Companies of the ERG Group operate with the highest respect for the health and safety of employees and third parties, as well as for the environment, defined in its broadest sense6.
Consistently with the provisions of the Code of Ethics of the ERG Group, a sustainability clause based on workplace accidents has been added to the MBO System.
Sustainability clause
In the MBO System, the variable remuneration referred to the company target will not be paid out, for the reference year, regardless of the corporate performance recorded, if there is a fatal accident involving a Group employee or an accident causing a level of permanent disability greater or equal to 46%.
2019: ON
The accidents occurred in 2019 resulted in a residual disability level equal to or less than 3%.
7 No. accidents*1,000,000/worked hours.
8 No. days lost*1,000/worked hours.
In the last two years, ERG has rewarded its shareholders with total dividends of approximately EUR 284 million (including a non-recurring component of approx. EUR 60 million) and a share performance of 27.5%, almost 22 points higher than the FTSE All Share average.
- Compensation paid in 2019The following tables set out details of the remuneration paid during the year in question, at any title and in any form, by the Company and by subsidiary and associated companies.
Table 1. Fees paid to the members of the Board of Directors, general managers and other executives with strategic responsibilities
(A)
(B)
(C)
(D)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Name and surname
Office
Period for which office was held
Termination of office
Fixed fees
Fees for participation in committees
Variable non-equity fees
Non-monetary benefits
Other fees
Total
Fair Value of equity fees*
Severance indemnities for end of office or termination of employment
Bonus and other incentives
Share of profit
Edoardo Garrone
Chairman
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company preparing
the financial statements (ERG S.p.A.)846,478
-
-
-
13,522
-
860,000
-
-
(II) Fees from subsidiaries
and associated companies-
-
-
-
-
-
-
-
-
(III) Total
846,478
-
-
-
13,522
-
860,000
-
-
-
Alessandro Garrone
Executive Deputy Chairman
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)1,186,600
-
-
-
16,716
-
1,203,316
432,628
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
1,186,600
-
-
-
16,716
-
1,203,316
432,628
-
Giovanni Mondini
Deputy Chairman
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)348,231
-
-
-
15,590
-
363,821
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
348,231
-
-
-
15,590
-
363,821
-
-
Luca
Bettonte
Chief Executive Officer
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)1,488,162
-
-
-
33,736
-
1,521,899
1,175,198
525,000
(1)
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
1,488,162
-
-
-
33,736
-
1,521,899
1,175,198
525,000
Massimo Belcredi
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)65,010
45,000
(2)
-
-
4,990
-
115,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
65,010
45,000
-
-
4,990
-
115,000
-
-
Mara Anna Rita Caverni
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
45,000
(3)
-
-
-
-
115,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
45,000
-
-
-
-
115,000
-
-
(A)
(B)
(C)
(D)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Name and surname
Office
Period for which office was held
Termination of office
Fixed fees
Fees for participation in committees
Variable non-equity fees
Non-monetary benefits
Other fees
Total
Fair Value of equity fees*
Severance indemnities for end of office or termination of employment
Bonus and other incentives
Share of profit
Barbara Cominelli
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
35,000
(4)
-
-
-
-
105,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
35,000
-
-
-
-
105,000
-
-
Marco
Costaguta
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
60,000
(5)
-
-
-
-
130,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
60,000
-
-
-
-
130,000
-
-
Paolo Francesco Lanzoni
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)65,010
35,000
(6)
-
-
4,990
-
105,000
-
-
(II) Fees from subsidiaries and associated companies
-
30,000
(7)
-
-
-
-
30,000
-
-
(III) Total
65,010
65,000
-
-
-
-
135,000
-
-
Silvia
Merlo
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
35,000
(8)
-
-
-
-
105,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
35,000
-
-
-
-
105,000
-
-
Elisabetta Oliveri
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
105,000
(9)
-
-
-
-
175,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
105,000
-
-
-
-
175000
-
-
Mario
Paterlini
Director
01.01.2019 - 31.12.2019
04.2021
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)70,000
-
-
-
-
-
70,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
70,000
-
-
-
-
-
70,000
-
-
Elena
Spagnol
Chairman Board of Statutory Auditors
01.01.2019 - 31.12.2019
04.2022
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)60,000
-
-
-
-
-
60,000
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
60,000
-
-
-
-
-
60,000
-
-
(A)
(B)
(C)
(D)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Name and surname
Office
Period for which office was held
Termination of office
Fixed fees
Fees for participation in committees
Variable non-equity fees
Non-monetary benefits
Other fees
Total
Fair Value of equity fees*
Severance indemnities for end of office or termination of employment
Bonus and other incentives
Share of profit
Lelio
Fornabaio
Standing Auditor
01.01.2019-31.12.2019
04.2022
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)40,000
30,000
(10)
-
-
-
-
70,000
-
-
(II) Fees from subsidiaries and associated companies
24,000
(11)
-
-
-
-
-
24,000
-
-
(III) Total
64,000
30,000
-
-
-
-
94,000
-
-
Fabrizio
Cavalli
Standing Auditor
01.01.2019-31.12.2019
04.2022
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)26,667
-
-
-
-
-
26,667
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
26,667
-
-
-
-
-
26,667
-
-
Stefano Remondini
Standing Auditor
01.01.2019-17.04.2019
04.2019
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)13,333
-
-
-
-
-
13,333
-
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
13,333
-
-
-
-
-
13,333
-
-
Paolo Luigi
Merli
General Manager
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)321,429
-
200,000
(12)
-
7,841
-
529,269
180,800
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
321,429
-
200,000
-
7,841
-
529,269
180,800
-
Executives with strategic responsibilities(13)
Directors in subsidiaries and division managers
(I) Fees in the company
preparing the financial statements (ERG S.p.A.)530,000
-
190,000
(14)
-
16,950
-
736,950
238,914
-
(II) Fees from subsidiaries and associated companies
-
-
-
-
-
-
-
-
-
(III) Total
530,000
-
190,000
-
16,950
-
736,950
238,914
-
Note Table 1
(1) Portion accrued in the year of the termination indemnity, which will accrue according to the duration of the office. For further details see paragraph6.1.2 under "Termination indemnity"
(2) Fee as Member of the Control and Risk Committee
(3) Fee as Chairman of the Control and Risk Committee
(4) Fee as Member of the Nominations and Remuneration Committee
(5) Fee as Member of the Strategic Committee
(6) Fee as Member of the Nominations and Remuneration Committee
(7) Fee as Chairman of the Supervisory Committee of ERG Power Generation S.p.A.
(8) Fee as Chairman of the Nominations and Remuneration Committee
(9) Fee as Member of the Control and Risk Committee and Member of the Strategic Committee
(10) Fee as Chairman of the Supervisory Committee of ERG S.p.A.
(11) Fee as Chairman of the Board of Statutory Auditors in ERG Power Generation S.p.A. and ERG Hydro S.r.l.
(12) Short-term variable component - MBO.
(13) Includes two Executives with Strategic Responsibilities (14) Short-term variable component - MBO.
* Annual portion of Fair value at the assignment date indicated in the financial statements (column 5 table 3A)
- Monetary Incentive PlansTable 3B: Monetary incentive plans for members of the board of directors, general managers and other executives with strategic responsibilities
A
B
(1)
(2)
(3)
(4)
Name and surname
Office
Plan
Bonus for the year
Bonus for previous years
Other Bonuses
(A)
(B)
(C)
(A)
(B)
(C)
Payable/Paid
Deferred
Deferment period
No longer payable
Payable/
Paid
Still deferred
(I) Fees in the company preparing the financial statements
Paolo Luigi
Merli
General Manager
MBO System
200,000
-
2019
(1)
-
-
-
-
-
Executives with strategic responsibilities
Directors in subsidiaries
and division managersMBO System
190,000
-
2019
(1)
(I) Total
390,000
-
-
-
-
-
No fees from subsidiaries and associated companies are provided for
Notes Table 3B
(1) Variable component of the remuneration accrued in 2019 related to the MBO System, which will be paid out in May 2020 - Share Incentive PlansTable 3A: Incentive plans based on financial instruments, other than stock options, for members of the Board of Directors, general managers and other executives with strategic responsibilities
A
B
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
Financial instruments
assigned in previous years
not vested during the year
Financial instruments assigned during the year
Financial instruments vested during the year and not assigned
Financial instruments vested during the year and assigned
Financial instruments accrued during the year
Name Surname
Office
Plan
No. and Type
Vesting period
No. and Type
Fair value at allocation date
Vesting Period
Assignment date
Market
price on assignment
No. and Type
No. and Type
Value at vesting date
Fair Value
Alessandro Garrone
Executive Deputy Chairman
Performance Share 2018-2020
BoD 14/05/2018
N/A
N/A
67,000
1,297,884
three years
21/05/2018
18.4551
N/A
N/A
N/A
432,628
Luca
Bettonte
Chief Executive Officer
Performance Share 2018-2020
BoD 14/05/2018
N/A
N/A
182,000
3,525,595
three years
21/05/2018
18.4551
N/A
N/A
N/A
1,175,198
Paolo Luigi
Merli
General Manager
Performance Share 2018-2020
BoD 14/05/2018
N/A
N/A
28,000
542,399
three years
21/05/2018
18.4551
N/A
N/A
N/A
180,800
Executives with strategic responsibilities
No. 1
Performance Share 2018-2020
BoD 14/05/2018
N/A
N/A
37,000
716,742
three years
21/05/2018
18.4551
N/A
N/A
N/A
238,914
Other Executives(1)
No. 4
Performance Share 2018-2020
BoD 14/05/2018
N/A
N/A
56,000
1,084,799
three years
21/05/2018
18.4551
N/A
N/A
N/A
361,600
Notes Table 3A
(1) Note that within the meaning of the Plan Regulations, on 28 February 2019 the Nominations and Remuneration Committee resolved upon the participation of a new beneficiary, allocating 6,000 shares, and that in 2019, as a result of voluntary resignation, one participant was removed from the incentive system, thereby losing all rights to participation in the 2018-2020 Performance Share System (21,000 shares)
- Compensation plans based on financial instrumentsTable 1 of scheme 7 of Annex 3A, Regulation No. 11971/1999
With regard to the Performance Share System approved by the Ordinary Shareholders' Meeting on 23 April 2018, to the conditions and explanatory purpose of the information document, made available to the public on the website of the Company (www.erg.eu), the following table provides, pursuant to Article 84-bis (Annex 3, Table 3A) of the CONSOB Issuers' Regulations, details of the instruments awarded under the system.
BOX 1
FINANCIAL INSTRUMENTS OTHER THAN STOCK OPTIONS
Section 2
Name and surname
or CategoryOffice
Newly awarded instruments based on the decision of the body responsible for the implementation of Shareholders' resolution
Date of Shareholders' resolution
Type of
financial instrumentsNo.
financial instrumentsAward date
Purchase
price of instruments,
if anyMarket price
on awardVesting
periodAlessandro Garrone
Executive Deputy Chairman
23/04/2018
Shares
67,000
21/05/2018
Treasury
Shares18.4551
3 years
Luca Bettonte
Chief Executive Officer
23/04/2018
Shares
182,000
21/05/2018
Treasury
Shares18.4551
3 years
Paolo Luigi Merli
General Manager
23/04/2018
Shares
28,000
21/05/2018
Treasury
Shares18.4551
3 years
Executives with
strategic responsibilitiesNo. 1
23/04/2018
Shares
37,000
21/05/2018
Treasury
Shares18.4551
3 years
Other Executives(1)
No. 4
23/04/2018
Shares
56,000
21/05/2018
Treasury
Shares18.4551
3 years
Notes to the Table (1)
Note that within the meaning of the Plan Regulations, on 28 February 2019 the Nominations and Remuneration Committee resolved upon the participation of a new beneficiary, allocating 6,000 shares, and that in 2019, as a result of voluntary resignation, one participant was removed from the incentive system, thereby losing all rights to participation in the 2018-2020 Performance Share System (21,000 shares)
- Equity investments held in 2019Table 7-ter: Table with information on the equity investments of members of the board of directors and statutory auditors, general managers and other executives with strategic responsibilities
Name and surname
Office
Investee Company
Number of shares held at the end of the previous year
Number of shares bought
Number of shares sold
Number of shares held at the end of the current year
Alessandro Garrone (1)
Executive Deputy Chairman
ERG S.p.A.
2,000
-
-
2,000
Marco Costaguta (1)
Director
ERG S.p.A.
45,000
-
5,000
40,000
Elisabetta Oliveri (1)
Director
ERG S.p.A.
1,000
-
-
1,000
Paolo Luigi Merli (1)
General Manager
ERG S.p.A.
20,000
20,000
-
40.080(2)
Executives with strategic responsibilities (1)
ERG S.p.A.
-
-
-
160(3)
(1) Direct shareholders - holding title: ownership
(2) 80 shares subject to free assignment on 14/01/2019 (3)
80 shares subject to free assignment on 14/01/2019 for each Executive with strategic responsibilities (2)