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Change Report

General principles

In order to achieve these objectives, the remuneration of directors and managers with strategic responsibilities is defined in accordance with the following principles and criteria:

  • remuneration structure able to attract, retain and motivate individuals with high-level professional qualities;
  • remuneration of non-executive directors commensurate with the commitment required in relation to participation in Board Committees, with remuneration for the Chairman that is different from that of the members of each Committee, taking account of the role attributed to the former in respect of the coordination of duties and liaison with Company bodies and departments;
  • remuneration structure, for the Chairman, that includes fixed compensation consistent with the position held;
  • a remuneration structure for the Chief Executive Officer, the Chief Operating Officer and managers with strategic responsibilities, with a suitable balance between a fixed component in line with the powers and/or responsibilities assigned and a variable component calculated within maximum limits and aimed at linking remuneration to the defined performance targets;
  • overall remuneration that is in line with the applicable market for similar positions or for roles and responsibilities of a comparable level of complexity, in the context of a pool of companies comparable with Snam, through specific salary benchmarking carried out with the assistance of leading consulting firms;
  • variable remuneration for executive positions that consists of a short-term component and a medium-to-long-term component, characterised by an appropriate deferral of incentives through the provision of a minimum vesting period of three years;
  • significant weighting, for executives with a greater impact on the company’s results, of the long-term variable components, with a view to sustainability of results and the creation of shareholder value over the medium-to-long term;
  • predetermined targets relating to variable remuneration that are measurable and defined to ensure the remuneration of performance over both the short and the medium term by:
    1. setting targets for short-term incentive plans on the basis of a balanced scorecard that enhances the performance of the business and of the individual, in relation to specific objectives in their area of responsibility and, for those in charge of internal control activities, consistent with the duties assigned to them;
    2. setting targets for deferred or long-term incentive plans in a manner that enables an assessment of business performance both in absolute terms, with reference to the ability to generate increasing and sustainable levels of profitability, and in relative terms, compared with a peer group, with reference to the ability to generate value higher than that of major European listed companies in the utilities sector;
  • assessment of the assigned performance objectives, excluding the effects of external variables arising from changes in the benchmark scenario, in order to enhance the actual individual contribution to the achievement of the assigned performance objectives;
  • adoption of claw-back mechanisms aimed at recovering the variable portion of compensation which is no longer payable since it was received on the basis of objectives achieved following malicious or grossly negligent conduct or data later found to be patently false;
  • benefits in line with pay practices in the reference market and consistent with current regulations, in order to complete and enhance the overall remuneration package, taking into account the roles and/or responsibilities assigned, while focusing on the pension and welfare components;
  • potential supplementary indemnities payable upon the termination of employment and/or expiration of term of office for executive roles known to be temporary in nature, or with a greater risk of competitor attraction; such indemnities should be consistent with remuneration;
  • possible use of non-compete clauses pursuant to Art. 2125 of the Italian Civil Code in order to protect the Company’s interests in the event of termination of employment with the Company, with provision for appropriate penalties in the event of any breach of such clauses.
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