Chief Operating Officer
Fixed remuneration is determined on the basis of assigned positions and responsibilities, by considering the average market salary levels, and by considering a recovery in competitiveness with the variable components. The Remuneration Committee assessed the consistency with the company’s remuneration policy and with the salary benchmarking carried out by the company Towers Watson, with reference to both the Italian and the European markets. The fixed remuneration is therefore € 550,000 gross. Furthermore, in his capacity as an executive of Snam, the Chief Operating Officer receives indemnities for work-related travel, both in Italy and abroad, in line with the provisions of the CCNL [National Collective Labour Agreement] and supplementary company agreements.
In addition to the components described, the remuneration of the Chief Operating Officer for the year 2016 only comprises payment of an entry bonus as well.
Short-term variable incentives
The Annual Variable Incentive Plan (IMA) provides for compensation determined with reference to Snam’s performance and individual performance, with a target incentive level (performance = 100) and a maximum incentive level (performance = 130), up to 45% and 58.5% respectively of fixed remuneration. A threshold level (performance = 85) has been set, below which no short-term incentive is paid.
For the Chief Operating Officer, the annual variable incentive is determined partly (70%) by the corporate results with respect to the targets assigned to the Chief Executive Officer by the Board of Directors on 24 February 2016, and partly (30%) by a series of individual targets (focused on economic/financial, operational and industrial performance, internal efficiency and sustainability issues) assigned according to the scope of responsibility of the position held, in line with the provisions of the Company’s Performance Plan.
Long-term variable incentives
The Chief Operating Officer, in line with the provisions for the Chief Executive Officer, takes part in the Long-Term Incentive Plans with the following characteristics:
- 2016 Deferred Monetary Incentive Plan (IMD), linked to the Company’s performance measured in terms of EBITDA, which maintains the same performance conditions and characteristics described in the paragraph devoted to the remuneration of the Chief Executive Officer. The basic incentive to be awarded to the Chief Operating Officer is determined for a target value and a maximum value of 30% and 39% respectively of the fixed remuneration. The incentive to be paid at the end of the three-year reference period (vesting period) is determined as a percentage between 0% and 170% of the assigned value, according to the results achieved.
- 2015-2017 Long-Term Monetary Incentive Plan (IMLT) provided for managers that have a greater impact on the corporate results. This plan maintains the same performance conditions and characteristics as the Plan provided for the CEO. For the Chief Operating Officer, the base incentive to be awarded is 45% of fixed remuneration. The incentive to be paid at the end of the three-year reference period (vesting period) is determined as a percentage between 0% and 130% of the assigned value, according to the results achieved.
Indemnities provided in the event of termination of office or employment
The Chief Operating Officer is provided with the employment termination indemnities established by the relevant National Collective Labour Agreement and any supplementary indemnities are individually agreed at the time of termination in accordance with the criteria established by Snam for cases of assisted redundancy.
The impact of any termination of employment of the Chief Operating Officer on the benefits allocated under the existing long-term incentive plans is described in the relevant allocation rules. In particular, the Deferred Monetary Incentive Plans (IMD) and the Long-Term Monetary Incentive Plan (IMLT), which contain provisions to encourage the retention of personnel, provide, in cases of consensual termination of employment during the course of the vesting period, for the beneficiary to retain the right to the incentive at a reduced level for the period between the awarding of the base incentive and the occurrence of the termination. No payment is due in cases of unilateral termination by the Company, or of voluntary resignation or termination for just cause, or for the achievement of results that are objectively inadequate.
In accordance with the policy applied in 2015 and in compliance with the provisions of national bargaining and supplementary agreements for Snam’s executives, the Chief Operating Officer will be registered with the supplementary pension fund (FOPDIRE) and the supplementary healthcare fund (FISDE), and will be given forms of life and disability insurance cover, as well as a car for both business and private use.