03/21/2022 - 11:54 AM
The Nomination and Remuneration Committee's work took place with the planning of activities, implementation of instruments in support of the 2021 Remuneration Policy and the definition of guidelines to the 2022 Remuneration Policy.
Below is the cycle of activities that have characterised the Committee’s work for the period 2021-2022:
The TIM Group's remuneration policy is designed to support the achievement of the objectives set out in the Company's Strategic Plan, while ensuring the company's competitiveness on the labour market and its ability to attract, retain and motivate personnel.
The 2022 remuneration policy aims to:
Definition of the policy is supported by the analysis of market practices in terms of both remuneration levels and the composition of remuneration packages, taking as reference both companies in the Telco sector at an international level (peer Group Industry TLC) and Italian companies comparable in terms of size and/or stock market capitalisation (peer Group FTSE MIB).
The components of individual remuneration are:
The integration of the various components allows the company to appropriately balance the monetary and nonmonetary tools, with the aim of increasing the satisfaction of recipients at a sustainable cost.
The remuneration package for the Chairman consists of only the fixed component; below is a description of the remuneration package assigned to the Chairman, as determined by the Board of Directors on 28 April 2021, on the proposal and with the approval of the Nomination and Remuneration Committee.
The fixed remuneration for the functions of Chairman is set at the gross sum of 600,000 euros per annum. The Chairman does not receive any remuneration for the office of Director or his membership of the Sustainability Committee (pursuant to Art. 2389, subsection 1 of the Italian Civil Code).
The Chairman is not entitled to any form of variable remuneration, either short or long term.
There is no severance payment planned.
The Chairman is not a recipient of benefits but receives reimbursement of expenses incurred in the performance of his duties, in accordance with the Bylaws.
Chief Executive Officer
A description of the remuneration package of the Chief Executive Officer and General Manager in office on the date of approval of this report, whose structure was established by the Board of Directors on 21 January 2022 (on the proposal and approval of the Nomination and Remuneration Committee) with reference to the position of General Manager and office of Chief Executive Officer, is provided below.
The fixed remuneration for the Chief Executive Officer is set at a gross annual amount of 1,400,000 euros, divided between the remuneration for the executive position (1,300,000 euros) and the remuneration for the office of Chief Executive Officer (100,000 euros).
The Chief Executive Officer does not receive remuneration for the office of Board Director, nor as a member of Committees, if any (art. 2389 subsection 1 of the Italian Civil Code).
For each financial year, the Chief Executive Officer is assigned a short-term variable component (MBO), linked to the achievement of objectives set annually by the Board of Directors, corresponding to a target of 100% of his fixed remuneration (1,400,000 euros); each objective is measured individually, with a parametric scale as described in the paragraph "Short-term Incentive System" of the Remuneration report.
On 2 March 2022, the Board of Directors drew up – at the proposal of the Nomination and Remuneration Committee, and in line with the general architecture – the following incentive objectives for the 2020 MBO:
|Targets||Weight||Min vs Tgt||Target||Max vs Tgt|
|TIM Group EBITDA GATE||30%||95%||budget||105%|
|TIM Group Equity Free Cash Flow||23%||-12%||budget||+12%|
|TIM Group Net Financial Position||15%||+2,5%||budget||-2,5%|
|TIM Group Services Revenues||10%||-2%||budget||+2%|
Customer Satisfaction Index (10%)
Young Employee Engagement (6%)
Gender Pay Gap Middle Managers Domestic Core (6%)
The Chief Executive Officer is a beneficiary of the 2022-2024 Stock Option Plan previously described. The pay opportunity at target provides for the assignment of 24,000,000 option rights, which may increase to 26,400,000 depending on the level of achievement of the performance parameters. For more details, see the information document on the initiative, which can be consulted on the link 2022-2024 Stock Option Plan Information Document.
As per policy, in the event of termination of the Chief Executive Officer position without just cause, an indemnity equal to the remuneration due for the office will be paid until the natural expiry of the mandate, with a maximum of 24 months' salary (calculated as the sum of the fixed and MBO components). With respect to the termination of the employment contract, the severance pay established by law and by the CCNL (National Labour Contract) is provided, with recognition of additional monthly payments up to a maximum of 24 (calculated on the fixed component).
In the three years following the payment of the bonus of the variable remuneration components, a clawback clause for the amounts paid may be activated, as per policy.
In relation to the managerial role, the Chief Executive Officer enjoys the benefits specified for the management of the Company (health insurance cover through the TIM Group Executive supplementary healthcare assistance; supplementary pension cover through membership of the TIM Group Executive complementary pension fund; insurance cover for work-related and non-work-related accidents, life and invalidity benefit due to illness; a company car for mixed use; check-up). The Company also holds a “professional risks policy” that covers all its Directors and Officers.
The pay mix for 2022 is shown below. The percentages indicated alternatively assume the disbursement of the minimum, target and maximum value for both the short-term incentive scheme – MBO – and the 2022-2024 LTI Plan, which shall be submitted to the Shareholders’ Meeting of 7 April 2022 for approval. With regard to the 2022-2024 LTI plan, the option rights have been valued on an annual basis assuming the fair value of the share as at 2 March 20221, the date on which TIM’s Board of Directors approved the plan architecture, proposing its approval to the Shareholders' Meeting of 7 April.
The following are the names of Key Managers with Strategic Responsibilities in the period 2021-2022:
Luigi Gubitosi - Managing Director and Chief Executive Officer of Telecom Italia S.p.A. - General Manager 1
Pietro Labriola - Managing Director and Chief Executive Officer of TIM S.p.A. - General Manager 2
1 until 26 November 2021
2 from 27 November 2021 General Manager TIM S.p.A. and from 21 January 2022 also Chief Executive Officer of TIM Group
3 from 30 November 2021
4 from 1 March 2022
5 from 5 July 2021 to 6 December 2021; the Procurement position was previously held by Nicola Grassi
6 from 1 February 2022; previously - from 7 December 2021 - he was interim manager in the same position
7 until 20 September 2021
8 from 5 July 2021 to 6 December 2021; he was previously Head of Procurement
9 1 February 2022; previously this position was held by Pietro Labriola
10 from 7 December 2021
11 from 7 December 2021; until 6 December, Head of Chief Regulatory Affairs & Wholesale Market Office
12 until 6 December 2021
13 from 1 February 2022; previously - from 7 December 2021 - interim manager of the same position
14 until 4 July 2021
15 until 1 March 2022
16 from 21 February 2022
17 until 29 November 2021
18 from 7 December 2021; from 21 September until 6 December 2021, Chief Revenue, Information & Media Office; from 5 July 2021 until 20 September 2021, Chief Revenue Office; from 9 April 2021 until 4 July 2021, Chief Technology & Operations Office; until 8 April 2021, Chief Operations Office.
The structure of the remuneration package for Key Managers with Strategic Responsibilities, excluding the Chief Executive Officer, for 2022 is as follows:
The guideline for 2022 is to keep remuneration in line with the market median, with the possibility of achieving even higher values, setting selective criteria for adjusting fixed remuneration
The annual incentive plan for 2022, with a target pay opportunity equal to 50% of fixed remuneration, includes some changes for Executives with Strategic Responsibilities compared to 2021:
For the reference diagrams see the Remuneration report.
Each objective is measured individually, with a parametric scale as described in the section "Short-term Incentive System".
The Key Managers with Strategic Responsibilities were beneficiaries of the 2022-2024 Stock Option Plan previously described.
The pay opportunity at target provides for the assignment of up to a maximum of 6,250,000 option rights,
which may increase to a maximum of 6,875,000 depending on the level of achievement of the performance parameters.
For more details, see the information document on the initiative, which can be consulted on the link 2022-2024 Stock Option Plan Information Document.
The treatments applicable under the law and the CCNL are provided for. The additional allowances provided may not exceed 24 months’ salary (calculated as the sum of the gross annual pay and MBO).
In the event of termination of the employment relationship in the absence of just cause for dismissal, it will be the responsibility of the Chief Executive Officer to identify the resources that - due to the importance and strategic nature of the role covered - may receive severance pay, to which a non-competition agreement may be associated, depending on the importance and strategic nature of the role covered, for a maximum period of one year calculated on the fixed remuneration.
Benefits are granted similar to those provided for all other company managers: company car for mixed use, insurance policies (workplace/non workplace accidents, life and invalidity caused by illness), complementary health insurance cover, complementary pension fund and check-up. The Company also holds a “professional risks policy” that covers all its Directors and Officers.
No bonuses can be assigned that are not tied to performance conditions. The Company has exceptionally reserved the right to make lump sum payments during the hiring phase in order to favour the acquisition of resources with specific skills considered essential for the achievement of the strategic business objectives and who have accrued the right to specific deferred remuneration from their Company of origin.
The pay mix for 2022 is shown below.
The percentages indicated alternatively assume the disbursement of the minimum, target and maximum value for both the short-term incentive scheme – MBO – and the 2022-2024 LTI Plan, which shall be submitted to the Shareholders’ Meeting of 7 April 2022 for approval. With regard to the 2022-2024 LTI plan, the option rights have been valued on an annual basis assuming the fair value of the share as at 2 March 20221, the date on which TIM’s Board of Directors approved the plan architecture, proposing its approval to the Shareholders' Meeting of 7 April.
This section describes the remuneration measures for the members of the Board of Directors in 2021.
The overall annual remuneration of the Board of Directors pursuant to art. 2389(1) of the Italian Civil Code was established by the Shareholders’ Meeting on 31 March 2021 as a maximum of 2,200,000 euros gross.
The Board of Directors held on 28 April 2021 divided up the remuneration, allocating 100,000 euros, gross per annum to each Director (excluding the Chairman and the Chief Executive Officer); this sum is a fixed fee. There is no remuneration linked to the company results, nor any severance pay.
The additional remuneration for Directors, Members of the Committees, is set out below.
Members: € 30.000
The Chair of the Board of Directors and CEO do not receive this compensation
Salvatore Rossi (C)
Federico Ferro Luzzi
Control and Risk Committee
Members: € 45.000
Chairman: € 65.000
Federico Ferro Luzzi (C)
Nomination and Remuneration Committee
Members: € 30.000
Chairman: € 40.000
Paola Bonomo (C)
Luca De Meo
|Related Parties Committee|
Members € 30.000
Chairman € 40.000
Paolo Boccardelli (C)
The remuneration policy, meaning the set of principles and tools adopted to define the compensation packages of Directors and Managers with Strategic Responsibilities involves the bodies named below.
Board of Directors
In order to ensure that the decisions taken regarding remuneration are appropriately investigated, the Board of Directors avails itself of the support of the Nomination and Remuneration Committee.
Nomination and Remuneration Committee
Board of Statutory Auditors