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Remuneration policy

Policy and activities

Policy and activities

06/07/2016 - 02:00 PM

The Nomination and Remuneration Committee's work took place with the planning of activities, implementation of instruments in support of the 2015 Remuneration Policy and the definition of guidelines to the 2016 Remuneration Policy.

The Committee has defined the planning of 2015 activities according to the annual agenda given below.

January – March

  • Checking the implementation of the remuneration policy for the previous year
  • Finalising the results of the MBOs for the previous year and determining the short-term variable incentive policies;
  • Finalising the results of the long-term incentive system;
  • Examining the settings for the Company's global salary policy for the year in progress;
  • Preparing the Report on Remuneration.

April - June

  • Preparatory work to check the compensation of the Board;
  • Monitoring the operative implementation of the MBO system;
  • Examining the results of the shareholder vote on the policy of scheduled remuneration
  • Monitoring the implementation of the People Strategy

July - September      

  • Monitoring the MBO system for the year in progress;
  • Updating the Peer Group for analyses and benchmarks on market best practices ;
  • Checking the compensation of the Board of Statutory Auditors;
  • Preparatory work for the introduction of the clawback clause.

October - December

  • Definition of the remuneration policy for the following year;
  • Checking and amending severance pay for Executive Directors;
  • Determining the clawback clause;
  • Checking the state of progress of the indicators for the short-term and long-term incentive systems (2014-2016 SOP Plan);
  • Preparatory work for the short-term incentive systems for the following year.

 

 

In 2015 the Committee met 7 times. The meetings were attended by the Head of the People Value Department, and the managers responsible for the areas being discussed were invited in each case to provide support. To perform its functions, the Committee makes use of the collaboration of the competent Departments within the Company and the support of external consultants who are not in situations likely to compromise their independence of judgement. Since July 2014, the Committee has made use of the assistance and studies provided by the company Mercer.

 

The remuneration policy of the Telecom Italia Group is aimed at ensuring the company's maximum competitiveness on the labour market, as well as its capacity to attract, retain and motivate people.

 

The guidelines and related remuneration tools must ensure:

  • the achievement of the Company's strategic targets;
  • the competitiveness of the company on the labour market;
  • the commitment of its people;
  • the safeguarding of the principles of internal fairness;
  • the alignment of the interests of the management with the creation of value for shareholders and also with the sustainability of the results in the long term;
  • the safeguarding of consistency at Group level, while taking into account the diversity of the reference markets.

 

In 2016 the following innovations are planned:

  • the introduction of alignment tools and flexibility in fixed remuneration;
  • implementation of the MBO system with particular regard to increasing the weighting of areas connected with Performance Management (from 20% to 30%) and to setting the target bonus by pay band;
  • the remodelling of the gate and performance parameters for the Chief Executive Officer, and their extension to the Executive Chairman;
  • the introduction of new claw-back clauses and new rationales aligned to best practice in severance payments.

 

Finally, when current Chief Executive Officer, Flavio Cattaneo, was appointed, it was decided to introduce a new additional bonus, to incentivise the aim of a break with the past and a company turnaround.

During 2016 and until the completion of this report (Board of Directors meeting on 27 April 2016), the Committee met 7 times. For the succession process, which led to the appointment of a Director, Flavio Cattaneo, as new Chief Executive Officer on 30 March 2016, the Committee was supported by executive search company Korn Ferry, as well as consultancy on employment law by the Company’s external legal advisors.