On 29th April 2010 the Corporate Shareholding Plan, directed to all employees working for the Telecom Italia Group, was approved by the Shareholders’ Meeting. It was aimed at increasing the motivation to achieve corporate objectives and increase the feeling of belonging to the Company.
The Plan was launched in June 2010 and gave Telecom Italia’s employees the opportunity to purchase company’s shares at particularly favourable conditions.
The offer was accepted by about 9,500 employees (about 16% of those who were entitled to it). Overall, 87% of the maximum number of shares established by the Board of Directors was purchased (corresponding to 31 million).
On 2 August 2011, the second phase of the Diffuse Shareholding Plan concluded with the assignment to approximately 9,000 beneficiaries of 1 share free of charge for every 3 that had been subscribed at a discount.
According to the Regulations of the Plan, the assignment of shares free of charge was subordinated to the continued holding of the shares subscribed and continued employment by Telecom Italia Group Companies.
What Shareholding Plans are
They include all types of remuneration mostly based upon the use of shares. There are different types of Shareholding Plans that – not only operate differently – but also differ as far as their objectives are concerned and for the categories of people they are aimed at.
Broad-based corporate shareholding plans
Which aim to promote employees’ feeling of belonging and loyalty. They are usually open to large groups of company members and are characterised by the opportunity to purchase shares at favourable conditions (free and/or discounted allocation).
Stock option plans
Which aim to adjust managers’ interest to that of shareholders. They are normally open to selected groups of people. They give the individual the right (option) to purchase – at the end of a specified period (vesting period) – shares at a particular price, determined at the time of allocation (strike price). Any potential profit is given by the difference between the strike price and the share value at the time of performance.
Performance share plans
Which are, similarly to the Stock option plan, geared towards adjusting managers’ interest to that of shareholders. These plans offer beneficiaries the right to receive shares, normally free of charge, only when pre-defined pluriannual performance corporate objectives have been achieved.