Performance Share Plan 2020-2022

The Shareholders’ Meeting, on May 4, 2020, approved the new long-term variable remuneration Performance Share Plan (2020-2022 LTI Plan) with a three-year duration starting from January 1st, 2020 and ending on December 31st, 2022. 

The Plan, as per current regulations and international best practices, is designed to encourage key persons with a strategic role in achieving corporate objectives, to continue working in the Group, creating a tool for retaining beneficiaries, while encouraging them to promote the Company.

With the 2020-2022 LTI Plan, the disbursement of long-term variable remuneration salary incentives is also linked to achieving specific environmental sustainability objectives and "Safety" ones, like reducing polluting gases and accident frequency index numbers.

Beneficiaries

The Plan is aimed at those people covering or performing relevant roles or functions in, or for, the Group, and for whom, an action that strengthens their loyalty, with a view of creating value and sustainability, is justified, through the provision of long-term rewarding mechanisms. 

Characteristics of the financial instruments granted and performance scale 

Provided reference targets are met, the 2020-2022 LTI Plan, aligned to the most important relevant provisions foresees a bonus consisting of a combination of a monetary component of 50%, and performance shares for the remaining 50%; this form of payment allows for the configuration of long-term variable remuneration, as well as subjecting it to performance conditions, i.e. to the sustainability of positive results over time.

The shares will be effectively assigned at the end of a vesting period over a three-year time horizon. In particular, the payment method of the long-term variable remuneration foresees a first tranche equal to 50%, paid up front after the aforementioned vesting period and a second tranche, also equal to 50%, deferred to the second year, following the three-year performance period.

The targets and KPIs of the 2020-2022 LTI Plan are aligned to the Business Plan and, as a result, also with the Progetto Italia, to anchor the results to the level of achievement of the strategic objectives.

In particular, the 2020-2022 LTI Plan is based on two types of indicators, measured independently, according to the values in the Budget/Business Plan, as follows:

• Economic-financial indicators defined as:
  • Gross Debt on EBITDA with a weight of 25%
  • Total Shareholder Return (TSR) with a weight of 25%
  • Overheads on revenues with a 30% weight
• Indicators related to risk and sustainability, defined as:
  • Lost Time Injury Frequency Rate, with a weight of 10%
  • Reduction of the intensity of “greenhouse gas emissions” with 10% weight.

The Bonus will be determined according to the level of achievement of the indicators. Each indicator achieved to an extent of at least 80% will be multiplied by its weight, to determine the amount of bonus referable to this indicator.

For an overall achievement level of objectives lower than 80%, no bonus will be given, while for overall performance levels greater than or equal to 120%, a 'cap' of 140% of the target bonus value assigned will be applied to each beneficiary at the start of the Plan.

The Board of Directors, upon proposal of the CNC, and the Strategic Committee, to the extent of its area of competence, will assess if the objectives have been met, after verifying if a minimum performance threshold has been achieved, as reported above. Finally, the 2020-2022 LTI Plan also foresees the application of malus clauses, claw-backs and specific clauses that will not allow payment to beneficiaries violating company rules.