Section I – 2016 Remuneration Policy

Governance of the Remuneration Process

The Policy regarding remuneration of members of Snam’s Board of Directors is defined in accordance with statutory and regulatory provisions, according to which:

• The Shareholders’ Meeting: (i) determines the compensation of members of the Board of Directors at the time of their appointment and for their entire term of office, (ii) passes resolutions, on the recommendation of the Board of Directors, on compensation plans based on the award of financial instruments;
• the Board of Directors, on the recommendation of the Remuneration Committee, and having heard the opinion of the Board of Statutory Auditors, determines the remuneration of the directors invested with specific duties and for participation in Board Committees.

In keeping with Snam’s rules of corporate governance⁵, the Board also:

• determines remuneration policy for the directors, Chief Operating Officers and managers with strategic responsibilities of the Company and its Subsidiaries and compensation systems after reviewing the proposals of the Remuneration Committee;
• determines the remuneration of the Internal Audit Manager in keeping with the Company’s remuneration policies, after approval by the Remuneration Committee;
• implements compensation plans based on shares or financial instruments that have been approved by the Shareholders’ Meeting;
• approves the Remuneration Report to be submitted to the Shareholders’ Meeting;
• assesses, after a mandatory opinion from the Remuneration Committee, the content of the vote concerning the Remuneration Report cast by the Shareholders’ Meeting and the Committee’s proposals concerning the adequacy, overall consistency and application of the Remuneration Policy adopted for directors and managers with strategic responsibilities.

In complying with the recommendations contained in the Code of Corporate Governance, the Board of Directors is assisted in matters of remuneration by a Committee of non-executive directors, the majority of whom are independent (Remuneration Committee), having both a consulting and an advisory role in this regard.