Remuneration

For us, managing our remuneration policy effectively not only means attracting the best people, but also a constant commitment to prudent management and sustainable results through the careful structuring of remuneration packages.

Our remuneration policy is aimed at attracting and retaining highly skilled professionals. The complexity and specialisation of our business means that it is not just a matter of finding the necessary skills; we must also pursue prudent management and long-term sustainability in terms of costs and results.

This is why we always remain focused on compliance with regulations and the code of conduct for listed companies in terms of the structure of remuneration packages, as well as the methods and instruments used to award their various components.

The structuring of the remuneration packages is designed to:

  • balance the pay mix between fixed and variable remuneration over time
  • provide a flexible approach to remuneration
  • link compensation to role-specific performance, without encouraging risky or short-termist behaviour
  • ensure annual assessment of the positioning of staff compensation packages compared to the market, also with the help of specialist consultants

For identified staff we have set up tailored risk-adjusted performance assessment mechanisms, which are measured over the long term. The pay mix is appropriately divided between cash and equity, which spreads remuneration over time and links it to the bank’s earnings. The equity instruments we use in our remuneration policies also include performance stock options and, in the past, stock option schemes.

We believe that the best way to value our staff is to ensure meritocracy and to develop their professional capabilities based on the principle of equal opportunities, in line with our strategic policies and organisational and production needs.

 

OUR PRINCIPLES

Competitiveness
  • Attract and retain talent
  • Guarantee an adequate pay mix

Value merit & performance

  • Variable compensation based on documented, sustained performance
  • Strong link between results and remuneration

Avoid “pay for failure” promote a long term approach

  • Deferral integral part of variable remuneration subject to performance conditions, malus and clawback clauses
  • Significant equity component in order to align incentives to long term value generation

Governance and compliance

  • Structure of remuneration broadly in line with the Italian law, Corporate Governance
  • Code and best market practices (both national and international players)

REMUNERATION GUIDELINES

RISK-ADJUSTED MECHANISMS
  • We apply mechanisms that take account of risk We have gateway conditions linked to our risk appetite framework and overall bonuses calculated based on economic profit
  • The bonuses are also subject to other performance conditions that can result in their elimination (malus conditions)
  • In the event of damage to our equity, income, financial earnings or reputation we have clawback clauses: contractual mechanisms that require the partial or full repayment of remuneration already paid
SHORT-TERM REMUNERATION
  • Linked to company targets set at the beginning of the financial year (budget targets and quantitative KPIs)
  • We also use non-financial/qualitative criteria aimed at supporting long-term value creation
  • We apply a cap to reduce appetite for risk
  • The policy of deferral is compulsory
LONG TERM APPROACH
  • Performance objectives are aimed at ensuring a solid capital base, adequate liquidity ratios, strong earnings, and appropriate risk management
  • The entitlement to variable remuneration vests in a period of no less than three years. For senior staff we adopt a five-year period
  • We set a holding period of two years for the upfront component (i.e. the amount paid in the year the bonus is awarded) and of a year after the vesting period for the deferred component
SEVERANCE PAY
  • We do not have any golden parachutes or special treatment for directors in the event of their termination
  • For executive directors and identified staff, severance pay consists of 24 months of remuneration capped at 5 million euro


     

GOVERNANCE OF REMUNERATION

Our governance of remuneration policies is in line with the most recent Italian and European regulations and is structured at two levels: corporate and organisational.
  • HUMAN RESOURCES
    Process owner: governs and controls units to verify earnings and financial data
  • AUDIT
    Reviews data and monitors process adherence
  • ACCOUNTING – P&C (Planning and Control)
    Provides data for determining business areas’ performances based on results
  • COMPLIANCE
    Assesses compliance of policies with laws and regulations
  • RISK MANAGEMENT
    Contributes to establishing metrics to calculate risk adjusted performance

REMUNERATION COMMITTEE

The committee

  • proposes the pay for staff whose remuneration and incentive systems are decided by the board of directors
  • serves in an advisory capacity for decisions regarding the criteria to be used for compensation payable to all identified staff
  • monitors application of the rules governing the remuneration of the heads of the company’s control units, working closely on this with the statutory audit committee
  • prepares the documentation to be submitted to the board of directors for the related decisions
  • works together with the other internal committees, particularly the risks committee
  • ensures the involvement of all relevant company units in devising and checking the remuneration and incentive policies and practices
  • provides opinions, also based on information received from the relevant company units, on whether the performance objectives to which the incentive schemes are linked have been reached and determines whether the other conditions for payment of compensation have been met
  • reports on the work performed to the governing bodies, including the shareholders in general meeting

SHAREHOLDERS IN GENRAL MEETINGS

The responsibilities of the shareholders in general meeting include:

  • setting the annual fixed pay for members of the board of directors
  • approving the remuneration policies and compensation schemes based on financial instruments for group directors, staff and collaborators
  • approving the criteria for determining the compensation to be awarded in the event of early termination of the employment relationship or term of office
  • on proposal by the board of directors, it can set the variable remuneration for employees and collaborators of the group up to a maximum of 200% of the fixed remuneration or any other limits set by the regulations.

 

REPORT ON REMUNERATION

The report on remuneration describes:

  • the current remuneration policy
  • the purposes and principles underlying Mediobanca's approach to remuneration
  • the remuneration for the previous year

Last update: 10/02/2017