The Report on the policy regarding remuneration and fees paid is annually approved by the Board of Directors, at the Remuneration Committee’s proposal.
The Report on the policy is divided into two sections:
- the first section illustrates the Company’s policy on the remuneration of the members of the Board of Directors, the General Manager and the other Key Executives, including the Company’s Executives with Strategic Responsibilities, and, without prejudice to the provisions of Article 2402 of the Italian Civil Code, the Standing Auditors, and the procedures used to adopt and implement this policy;
- the second section, listing the names of the members of the Board of Directors, the Standing Auditors and the Managing Director and in aggregate form the other Key Executives, including the Company’s Executives with Strategic Responsibilities, provides an adequate representation of the individual items making up the remuneration of the abovementioned persons, pointing out its consistency with the Company’s remuneration policy and illustrating the fees paid to such persons during the previous year, for whatever reason and in whatever form, by the Company and its subsidiaries and associated companies.
Under the provisions of Article 123-ter, paragraphs 3-ter and 6, of the Italian Consolidated Fincancial Law (TUF), the first section of the Report on the policy regarding remuneration and fees paid is submitted to binding resolution and the second section to non-binding resolution of the Ordinary Shareholders' Meeting convened in accordance with Article 2364, second paragraph, of the Italian Civil Code.
STRUCTURE OF THE REMUNERATION OF MANAGERS, OF THE BOARD OF DIRECTORS AND MANAGEMENT
The remuneration policy defines the principles and guidelines for determining the remuneration of the members of the Board of Directors, as well as the reference criteria for defining the remuneration of the Group's management, in line with the Governance model adopted by the Company and with the recommendations of the Corporate Governance Code.
The policy intends to attract and motivate resources with the professional qualities to carry out the tasks and fulfill the responsibilities assigned in line with the interests of management and with the primary objective of creating value for shareholders over a medium to long-term time horizon.
The remuneration policy for executive Directors and the rest of the managerial population is structured as follows:
Fixed remuneration - The fixed remuneration is such as to adequately compensate the services rendered and is commensurate with the tasks and responsibilities assigned, as well as sufficient to remunerate the services rendered in the event that the variable component is not paid. For Directors not vested with particular offices, the remuneration is limited exclusively to the fixed component to the extent determined by the Shareholders' Meeting and is not linked in any way to the achievement of performance objectives.
Variable remuneration - The variable remuneration for the managerial population is divided into a short-term component on an annual basis (MbO System) and a medium-long term component, reserved for a population of key managers (Long Term Incentive Plan).
Short Term Variable Component
The MbO system provides for the assignment of a certain number of predetermined and measurable objectives reported from time to time in the individual cards.
The performance objectives to which the short-term incentive is conditioned are modulated according to the role and organizational responsibility of the beneficiaries. The assigned objectives are generally selected from the following:
- Group and Division EBITDA
- Group Free Cash Flow
- Business Goals
- Specific Function Objectives
- Specific Sustainability Objectives
- Objectives related to the Business Plan
Medium-long term variable component
The medium long-term Incentive Plan consists of three cycles, each of which lasting three years and is based on the allocation to the beneficiaries of Fincantieri shares with no par value based on the achievement of specific performance objectives.
The disbursement of the incentive is conditional on the achievement of performance objectives both of an economic-financial nature (such as EBITDA) and linked to the performance of the stock (such as the Total Shareholder's Return compared to the FTSE Italia All Share Modified Index, both to an International Peer Group), and linked to a Sustainability Index.
Non-monetary benefits complete the remuneration structure of the executive population with tools aimed at guaranteeing the best welfare and social security coverage and with the provision of additional tools in line with market best practices:
The manager and the members of his / her family unit can benefit from both the coverage provided by the CCNL and the supplementary company insurance policy for health and medical expenses incurred.
Executives are expected to participate in a collective supplementary pension plan in line with the CCNL
Individual insurance coverage:
Insurance policies to cover occupational and non-professional accidents and illnesses are in place with respect to managerial staff at better conditions than the CCNL
Company car in mixed use:
The Company, in accordance with the current corporate policy, makes a long-term rental car available to the entire executive population for mixed use; the models being assigned can be chosen from within a small group already defined by the Company
Limited to the cases provided for, the Company provides accommodation for free use within the limits and in the manner of existing company regulations and for a maximum period of 3 years
REMUNERATION OF EMPLOYEES AND MANAGERS
The fixed-component of the remuneration remunerates the role and, in particular, the responsibilities attributed to the recipients taking into account, among other things, the experience, the quality of the contribution given to the achievement of business results and the level of excellence with respect to the assigned functions.
This component is sufficient to remunerate the work performance in the event of failure or partial disbursement of the variable components, where provided.
Furthermore, the fixed component is such as to ensure adequate competitiveness with respect to the remuneration levels recognized by the market for the specific position.
The managers include the Conventional Band of the so-called Senior professional. It is an intermediate role between middle manager and executive held by those who are distinguished by:
- particularly high technical specifications
- consolidated seniority in managerial qualification (at least three years)
- consistently positive performance
Senior professionals are identified by the Divisions concerned and by the Personnel Department and can belong to all company functions.
The conventional senior professional qualification will be awarded for a period of three years and can be extended indefinitely. If, on the other hand, the conditions for remaining in the aforementioned qualification are lacking, the Company has the right to revoke the attribution of the same and the related provisions connected to it.
STRUCTURE OF EMPLOYEE REMUNERATION AND MANAGERS
Thanks to a rewarding policy in line with the best market practices and based on the principles of transparency and meritocracy, we motivate and reward the best resources for quality and skills.
Our remuneration policy aims to attract and motivate resources with the qualities and skills necessary to contribute to the achievement of company results and create continuous value for shareholders.
Fincantieri's remuneration policy guarantees, in particular:
- compliance with the principles of transparency and meritocracy
- alignment with best market practices
- attraction and retention of the Group's resources
The National Collective Labor Agreement (CCNL) applied is the metalworking one.
The compensation package consists of a combination of the following elements:
Fixed Remuneration: it is such as to adequately compensate for the services rendered and is commensurate with the responsibility assigned by the company and the work performed.
Variable Remuneration: it is divided into an annual short-term component (MbO System) for the population of executives, managers and senior professionals and a medium-long term component, reserved solely for a population of key managers.
The MbO System (Management of Objectives)is focused on achieving the short-term (annual) objectives that are the basis of the Company's Business Plan. The aforementioned system involves the population of managers and executives.
The Long-Term Incentive Plans, on the other hand, aim to incentivize the Group's strategic resources to improve performance in the medium-long term, with reference to both economic and financial results and the creation of value for shareholders.
The salary review process, a fixed remuneration management tool, tends to take place annually, with the following objectives:
- To ensure a uniform and consistent remuneration treatment that guarantees the principles of fairness, competitiveness, transparency and meritocracy in line with the values, governance principles and corporate remuneration policy;
- Support the culture of performance and guarantee the enhancement and retention of resources, guiding them to achieve results according to the principles of integrity and fairness;
- Balance the fixed component of remuneration with the variable one, in line with the value and actual responsibilities of the role held.