Variable incentives

Short-term variable incentives

For the Chief Executive Officer, the incentive for the 2014 Annual Plan was paid following the assessment of the Company’s performance in relation to the achievement, in 2013, of the targets defined in line with the Strategic Plan and annual budget, in terms of:

For managers with strategic responsibilities, the variable incentive paid in 2014 was calculated as a sum weighted at 50% for the score for Snam’s performance and 50% for the score resulting from a comparison with their individual targets based on the positions they held, fixed in advance in Snam’s Performance Plan for 2013.

Snam’s results for 2013, measured on a constant basis and approved by the Board on the recommendation of the Remuneration Committee at its meeting of 27 February 2014, resulted in the calculation of a performance score of 127.7 points (130 in 2012) on the measurement scale used, which provides minimum, target and maximum levels of 70, 100 and 130 points respectively, with a threshold level of 85. For the purposes of the variable remuneration to be paid, the final performance score produced:

• for the CEO, the payment of an incentive of € 549,000 equivalent to 63.9% of fixed remuneration, taking into account the target incentive level (50%) and maximum level (65%) assigned;
• for managers with strategic responsibilities, the payment of bonuses calculated in relation to the specific performance achieved and dependent on the different incentive levels, varying according to their job.

The incentives paid to managers with strategic responsibilities are specified under the item “Variable non-equity/bonus compensation and other incentives” in Table 1, in Compensation paid in 2014, with related detailed information in Table 3 on the same page.

Deferred Monetary Incentive Plan

At its meeting on 27 February 2014, the Board of Directors, after the approval and recommendation of the Remuneration Committee, resolved upon the achievement of EBITDA for 2013 between the target and maximum amounts.

The Board set the basis of the 2014 incentive award for the Chief Executive Officer in the amount of € 301,000 (35% of fixed remuneration).

Managers with strategic responsibilities were paid incentive amounts that differed according to the levels of their positions, up to a maximum of 25% of fixed remuneration.

The base incentives awarded to managers with strategic responsibilities are specified under the item “Bonus for the year - deferred” in Table 3, in Compensation paid in 2014.

The Deferred Monetary Incentive awarded in 2011 to the CEO and managers with strategic responsibilities also vested in 2014. On the basis of Snam’s EBITDA from 2011-2013 and on the recommendation of the Remuneration Committee, the Board of Directors, at its meeting of 27 February 2014, approved a multiplier of 156% (on an incentive scale from 0% to 170%) to be applied to the base incentive awarded for the purposes of calculating the amount to be paid (from 2010-2012 the multiplier was 170%).

In particular, the Chief Executive Officer was paid an incentive of € 503,880 (equal to 156% of the base incentive of € 323,000 awarded in 2011).

Amounts paid to managers with strategic responsibilities are specified under the item “Bonuses for previous years - payable/paid” in Table 3, in Compensation paid in 2014.

Long-Term Monetary Incentive Plan

For the Chief Executive Officer, on the recommendation of the Remuneration Committee and in implementation of the provisions of the 2014 Remuneration Report, the Board of Directors approved the award of a base incentive for 2014 of € 430,000 (50% of fixed remuneration).

Managers with strategic responsibilities were awarded amounts determined according to their target incentive level, which differed according to the level of their positions, up to a maximum of 35% of fixed remuneration.

The base incentives awarded to managers with strategic responsibilities are specified under the item “Bonus for the year - deferred” in Table 3, in Compensation paid in 2014.

The Long-Term Monetary Incentive Plan for 2011 for the CEO and managers with strategic responsibilities also vested in 2014. At its meeting of 29 July 2014 and on the recommendation of the Remuneration Committee, the Board of Directors, on the basis of the results of Snam’s adjusted net profit achieved in the three-year period 2011-2013 and measured relative to the peer group (Enagas, National Grid, Red Electrica, Severn Trent, Terna and United Utilities), approved the multiplier to be applied to the base incentive awarded at 61.7% on the incentive scale of 0% to 130% (the multiplier was 125% for the three-year period 2010-2012).

In particular, the Chief Executive Officer was paid an incentive of € 210,706 (equal to 61.7% of the base incentive of € 341,500 awarded in 2011).

Amounts paid to managers with strategic responsibilities are specified under the item “Bonuses for previous years - payable/paid” in Table 3, in Compensation paid in 2014.

Stock Option Plans

Snam has not approved any stock option plans since 2009, so no plan was vested in 2014. In 2014 the deadline lapsed for exercising options from the last stock option plan assigned in 2008.