Remuneration

We have adopted a remuneration system that can attract, retain and motivate highly qualified resources, in compliance with the principles of financial sustainability and sound and prudent risk management.

Principles and purposes

In order to attain challenging targets and continue to be a competitive player in the financial market, we must avail ourselves of highly qualified and motivated personnel who act in accordance with the ethical principles for sustainable business.

Adequately remunerating skills is one of the main levers for attracting and retaining top talent.

The remuneration and incentive system of Banca Ifis is defined in accordance with the company’s objectives and values, the long-term strategies and the Group’s policies of prudent risk management, with the aim to:

Promoting sound, effective risk management, not encouraging risk-taking that exceeds the level of tolerated risk;
Promoting the group’s competitiveness and good governance, ensuring company performance is consistent with the sustainable growth objectives;
Promoting compliance with the legislation and transparency and fairness in dealings with customers, discouraging any infringement and/or unfair business practice;
Seeking the best alignment between the interests of different stakeholders;
Avoiding altering or undermining the risk alignment effects embedded in the remuneration mechanisms;
Avoiding creating conflicts of interest.

Governance of remuneration

The corporate bodies that prepare and approve the remuneration and incentive policies are:

The Ordinary Shareholders’ Meeting establishes the remuneration for the bodies that it appoints. It approves:
- The remuneration and incentive policies for the Board of Directors, the CEO, the Board of Statutory Auditors, the General Manager and the remaining personnel;
- Any remuneration plans based on financial instruments;
- The criteria for determining remuneration in case of early termination of the employment relationship or post.
The remuneration and incentive policies to be proposed to the Shareholders’ Meeting are dealt with exclusively by the Board of Directors. The Board of Directors reviews these policies at least once a year and is responsible for their correct implementation.
The Remuneration Committee assists the Board of Directors in defining the remuneration and incentive policies.
The Head of Human Resources prepares the remuneration policies mainly with the support of Compliance and Risk Management.

Updating the remuneration policies

The remuneration policies were updated by the Board of Statutory Auditors on 19 December 2019, after appointment of the new Board of Directors. The review was with particular regard to:

Remuneration of the new CEO;
Remuneration of the company’s key new resources;
Envisaged severance packages.

The remuneration policies for 2020 were approved by the Shareholders’ Meeting on 19 April 2020. The changes introduced for the 2020 financial year (see below) include identification of the indicator considered to determine the variable remuneration of the CEO. The remuneration of the General Manager has also been aligned with the most challenging targets envisaged for the CEO.

The parameters for access to the variable component of remuneration for all personnel have also been made stricter.

For further information please refer to the Executive summary di Governance.

Composition of the remuneration system

The remuneration system is based on three elements:

Fixed remuneration, set out for all employees, that reflects their professional experience and their organisational responsibilities (role), the market value of the role, and the national collective bargaining agreement in force. Pay increases for key personnel cannot exceed a certain threshold and any role based allowance is subject to the approval of the Board of Directors with the favourable opinion of the Remuneration Committee;
Variable remuneration is dependent upon the attainment of certain quantitative and/or qualitative objectives. It relates to performance and compliance with the rules of good professional conduct, with the possibility of corrective actions (malus condition e claw back);
Non-monetary benefits are also awarded to all employees.

The variable component is 40% with a deferred payment, with an up front payment of 60%, in particular:

The portion of variable component of remuneration to be deferred is 40%, and is paid in this manner:

50% in Banca Ifis S.p.A. shares, to be allocated after the three-year vesting period expires and exercisable at the end of the further one-year retention period the shares are subjected to;
The remaining 50% of the deferred variable component of remuneration will be paid in cash at the end of the three-year period and is subject to annual revaluation at the current legal rate..

The variable component of remuneration not subject to deferral (the remaining 60% – up-front) will instead be paid:

50% in cash;
The remaining 50% in Parent Company shares which will be exercisable at the end of the three-year retention period affecting them, in line with the strategic planning horizon.

For further information please refer to the Executive summary di Governance.

Remuneration paid in 2019

The remuneration system is based on three elements:

Remuneration paid to members of the Board of Directors, to the general managers and other executives with strategic responsibilities.
For further information please refer to pages 36 to 43 of the Remuneration Report.
Incentive plans based on financial instruments, not stock options, for members of the administration bodies, general managers and other executives with strategic responsibilities.
For further information please refer to pages 44 and 45 of the Remuneration Report.
Monetary incentive plans for members of the administration bodies, general managers and other executives with strategic responsibilities.
For further information please refer to pages 46 and 47 of the Remuneration Report.

Shareholdings

For the shareholdings of the members of the administration and control bodies, the general managers and other executives with strategic responsibilities, please refer to the Remuneration Report 2020.

Download the most recent Information on plans for compensation based on financial instruments.

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Inside information

27/03/2020