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Management, Board and Board of Auditors pay

The following policies were adopted in 2020 for the compensation of Snam’s chairman, chief executive officer, managers with strategic responsibilities and non-executive directors.
 
The following are Snam’s managers with strategic responsibilities, other than Directors and Auditors: Chief Energy Transition Officer; Chief Financial Officer &Chief International & Business Development Officer; Chief Industrial Assets Officer; General Counsel; Executive Vice President Human Resources & Organization & PFM.
 
Hereinbelow is represented the theoretical pay mix for the CEO and Managers with strategic responsibilities.
 

chairman

The Remuneration Committee, seeking the assistance of a highly specialised provider, has analysed the remuneration positioning of the Chairman, with the support of a specific benchmark with peer companies of the industry sector belonging to the FTSE MIB index.

The resulting positioning for the remuneration of the Chairman comes in below the median values of the reference market.

The Chairman of the Board of Directors receives an annual gross fixed payment for the position of € 310,000, including the annual fixed pay for Directors established by the Shareholders’ Meeting, in addition to the refunding of expenses incurred in relation to the position.
 
There are no short- or long-term variable incentives, agreements concerning severance pay or benefits (apart from the insurance policy to cover professional risks) associated with the role.

 

chief executive officer

 

 
 

The Remuneration Committee, seeking the assistance of a highly specialised provider, analysed the remuneration position of the CEO, through specific benchmarks with industry sector companies belonging to the FTSE Mib Index and European peer companies, utilities and operators of infrastructures in concession, comparable with Snam in terms of size and complexity.

 

The fixed pay for the CEO was therefore defined at € 970,000, taking into consideration: the pay established by the Shareholders’ Meeting for Directors, equal to € 70,000; the pay approved by the Board with regard to the powers delegated, equal to € 150,000; the annual gross pay for the position of General Manager, equal to € 750,000.

The annual variable component (Annual Monetary Incentive Plan - IMA) is calculated with reference to a target incentive level (performance = 100) and a maximum level (performance = 130) respectively equal to 70% and 91% of the fixed remuneration, in connection with the results achieved by Snam in the previous year compared with the targets defined. A threshold level is set (performance = 85),which corresponds to an incentive level of 59% of the fixed remuneration, below which the short-term incentive is not delivered.

The 2020 targets approved by the Board of Directors are based on:

  • EBITDA (30%)
  • Investments (15%)
  • Operating Efficiency (20%)
  • EBITDA and New Business Milestones(15%)
  • Sustainability – injury frequency and severity weighted index; indices DJSI, FTSE4GOOD e CDP; Forestry Project (20%)

 

The graph illustrates the overall incentive curve of the 2020 AMI for the Chief Executive Officer . 

 

shrortTermIncentives

For further details on the Annual Monetary Incentive (AMI) parameters for the CEO please refer to page 25 of the Remuneration Report 2020

In 2019, the Board of Directors resolved the last attribution provided by the 2017-2019 share-based Long-Term Incentive Plan (LTI).

In 2020, a new long-term share-based incentive plan was defined for the next three years. Continuing on from the previous version in place during the previous three years, the 2020-2022 Long Term share-based Incentive Plan (LTI), for managerial positions with a greater impact on company results, involves the annual granting of free shares up to a maximum value for the CEO of 210% of fixed remuneration after three years (vesting period).

The plan is based on four indicators:

  • Adjusted net  profit, weighting of 50%;
  • Added Value, weighting of 30%;
  • Reductions in natural gas emissions, weighting of 10%;
  • Equal representation in terms of gender diversity in Snam's management team, weighting of 10%.

 

Total performance is calculated based on the three-year period performance of the parameters identified in the three-year vesting period. The four performance indicators act independently of each other.

At the end of the vesting period there are plans for an additional number of shares to be granted, defined as dividend equivalent, calculated as the value of the dividends not received in relation to the actual number of vested shares. The plan also includes a two-year lock-up period on 20% of the shares.

For further details refer to the website section dedicated to the 2020-2022 Long Term share-based Incentive Plan (LTI).

 

 

 

With regards to the indemnity for the termination of the directorship and executive position of the Chief Executive Officer, it is aligned with the recurring practice in reference markets and as already adopted by Snam in the past. Specifically, if the term of office is not renewed when it expires, or if it is terminated in advance, two years of fixed annual compensation will be payable upon termination of employment plus the average of the Annual Monetary Incentive paid over the last three years, subject to the application of the provisions of the national contract for executives of companies that produce goods and services. 

In line with the provisions of national agreements and supplementary company agreements for Snam senior management, the CEO comes under the supplementary pension (FOPDIRE/PREVINDAI), the supplementary healthcare benefits scheme (FISDE) and another health insurance (Generali/Previgen) to supplement the FISDE, life and disability insurance cover, as well as a company car for personal and business use.

MANAGER WITH STRATEGIC RESPONSABILITIES

 
 

Considering the Managers with Strategic Responsibilities, the Remuneration Committee, seeking the assistance of a highly specialised provider, analysed the average remuneration levels on the market for positions with similar levels of responsibility and managerial complexity, through specific benchmarks with industry sector companies belonging to the FTSE Mib Index and European peer companies, utilities and operators of infrastructures in concession, comparable with Snam in terms of size and complexity.

The fixed remuneration is calculated based on the position and responsibilities assigned taking into consideration the average remuneration levels on the market for positions with similar levels of responsibility and managerial complexity in large national companies. The 2020 Guidelines include selective criteria while maintaining high levels of competitiveness and motivation.
Specifically, the proposed actions involve adjustment measures directed at those in positions where the scope of responsibility has been extended or in positions not higher than the market median references.
The Annual Monetary Incentive Plan (IMA) includes pay calculated with reference to the results of Snam and of individuals with a target incentive level (performance = 100) and a maximum level (performance = 130) differentiated according to the level of the position held up to a maximum of respectively 35% and 52% of the fixed remuneration. A threshold level is set (performance = 85) below which the short-term incentive is not delivered.
 
For Managers with Strategic Responsibilities, the annual variable incentive is calculated partly (25%) on the company results compared with the targets assigned to the CEO, and partly (75%) on a series of individual targets (focused on the economic/financial, operating and business performance, internal efficiency and the managerial skills model). 

In 2019, the Board of Directors resolved the last attribution provided by the 2017-2019 share-based Long-Term Incentive Plan (LTI). 

In line with the provisions for the CEO, Managers with Strategic Responsibilities are part of the new 2020-2022 Long-Term shared-based Incentive Plan (LTI) for managerial roles which have a great impact on company results. This Plan has the same performance conditions and characteristics as the Plan for the CEO. For Managers with Strategic Responsibilities the incentive assigned is differentiated by the level of the position up to a maximum of 130% of the fixed remuneration.

The number of shares granted at the end of the three-year (vesting) period is calculated in relation to the results achieved.

For further details refer to the website section dedicated to the 2020-2022 Long Term share-based Incentive Plan (LTI). 

 

For Managers with Strategic Responsibilities the provisions include the termination of employment terms established by the national collective agreement and any supplementary terms agreed individually at the time of termination in accordance with the criteria established by Snam.
 
The effects of any termination of employment for Managers with Strategic Responsibilities on the rights assigned under the scope of long-term incentive plans are described in the allocation regulations. Specifically, in order to foster the retention of resources, it is provided that, in the case of the mutual termination of employment during the vesting period, the beneficiary keeping the right to the incentives reduced in relation to the period elapsed between the allocation of the based incentive and the occurrence of this event. No provision is due in cases of unilateral termination by the Company for just cause or for voluntary resignation.

Managers with Strategic Responsibilities come under the supplementary pension (FOPDIRE/PREVINDAI), the supplementary healthcare benefits scheme (FISDE) and another health insurance (Generali/Previgen) to supplement the FISDE, life and disability insurance cover, as well as a company car for personal and business use.

 

Non-executive directors

 

The Remuneration Committee, seeking the assistance of a highly specialised provider, has analysed the remuneration positioning of the Directors, with the support of a specific benchmark with peer companies of the industry sector belonging to the FTSE MIB index, comparable with Snam in terms of size and complexity.

The resulting positioning for the remuneration of the Directors comes on the median level of the reference markets.

The Shareholders’ Meeting of 2 April 2019 approved the remuneration of directors, setting fixed gross annual compensation for the office of € 70,000, plus the refunding of expenses incurred in relation to the position.

Their remuneration is not linked to the financial results achieved by the company nor are they recipients of the share-based incentive plans.

Additional annual compensation is provided for participation in board committees:

  • for the Control, Risk and Related Parties Transactions Committee, with regard to the increasingly important role exercised in the oversight of company risks,€ 35,000 for the Chairman and € 25,000 for the other members
  • for the Remuneration Committee, the Appointments Committee and the ESG Committee € 25,000 for the Chairman and € 20,000 for the other members.

There are no agreements for severance pay for Non-executive directors or compensation in the event of dismissal or termination of employment without just cause or if their employment is terminated following a takeover bid.

BOARD OF AUDITORS

 

 

The Remuneration Committee, seeking the assistance of a highly specialised provider, has analysed the remuneration positioning of the Chairman and the members of the Board of Auditors, with the support of a specific benchmark with peer companies of the industry sector belonging to the FTSE MIB index, comparable with Snam in terms of size and complexity.

The resulting positioning for the remuneration of the Chairman and the members of the Board of Auditors falls around the median of the reference markets.

The Shareholders’ Meeting of 2 April 2019 approved the remuneration of the Chairman of the Board of Auditors, setting an annual gross fixed remuneration for the office of 80,000 euros, and that of the other members involves emoluments of 60,000 euros, plus the reimbursement of expenses incurred by virtue of the office. As regards the nature of the office, the following are not provided for: short- or long-term variable incentive components; agreements on severance indemnity and benefits; benefits (apart from the insurance policy to cover professional risks).

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updated
25 August 2020 - 12:25 CEST