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Policy and activities

06/13/2017 - 01:00 PM

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The Nomination and Remuneration Committee's work took place with the planning of activities, implementation of instruments in support of the 2016 Remuneration Policy and the definition of guidelines to the 2017 Remuneration Policy.

The Committee has defined the planning of 2016-2017 activities according to the annual agenda given below.

January – March 2017

  • Finalising the results of the performance targets for the previous year and determining the short-term variable incentive policies for the current year
  • Examination of the Board Evaluation results
  • Succession plan: updating and monitoring the process
  • Benchmark analysis on Board Compensation
  • Preparing the Report on Remuneration.

October - December 2016

  • Updating the Peer Group for analyses and benchmarks on market best practices
  • Preparatory work for the remuneration policy for the subsequent  year
  • Analysis of the hypothesis of a new plan Long Term Incentive 2017-2019
  • Progress of the indicators  for short-term and long-term incentive systems (2014-2016 SOP)  and Special Award)
  • Board Evaluation: identification of the advisor
  • Definition of compensation for the Strategic Committee

April - June 2016

  • Analysing benchmarks for the remuneration of the Chair and Vice-Chair
  • Monitoring Implementation Implementation of the MBO system

July - September 2016     

  • Monitoring the MBO system for the year in progress;
  • Definition of criteria to assess the performance of the Chair
  • Definition of compensation for the Vice Chair
  • Succession Planning: audit.

 

 

In 2016 the Committee met 12 times. The meetings were attended by the Head of the Human Resources and Organizational Development Department and the managers responsible for the areas being discussed were invited to provide support, from time to time. 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 the studies provided by the company Mercer, which worked in 2016 exclusively for the Committee. For the succession process (which led to the appointment of a serving 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.

 

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.

 

For 2017, the trend towards alignment with market practices continues.

However, with respect to the already mentioned selectivity requirements in the remuneration interventions, above all on the fixed component, they will be focused on cases where the resource is of high quality and there is a great lack of alignment with the benchmark market. In parallel with the remuneration interventions on the fixed component, it is possible to envisage additional interventions using the variable remuneration component as leverage, even as a one-off bonus. Adjustments, both up and down, to the Variable Remuneration (MBO) in relation to positioning as regards Total Annual Remuneration (TAR), which is the sum of Gross Annual Remuneration (GAR) plus Variable Remuneration (MBO), measured in comparison with practices found in the remuneration benchmark market may be considered.