Long-term plans archive and ESOP
In order to align the remuneration of Mediobanca Group senior management with long-term performance linked to achievement of the Strategic Plan 2023-26 objectives, a new Long-Term Incentivization Plan for 2023-26 was approved by shareholders at the Annual General Meeting held on 28 October 2023.
The Long-Term Incentivization Plan 2023-26 (the “LTI Plan 2023-26”), linked to the Strategic Plan “One Brand-One Culture”, had the following main characteristics:
| Elements | Indications |
|---|---|
| PERFORMANCE EVALUATION TIME HORIZON |
N° 3 fiscal years from FY 2023/2024 to FY 2025/2026, consistent with Strategic Plan 23 - 26 |
| LTI GROUP RECIPIENTS |
|
| PAY MIX STI/LTI |
On annual basis proposed pay mix max:
|
| GATEWAY | Those under the Remuneration Policies, assessed over the Plan period as follows:
|
| KPI |
|
| DISBURSEMENT MODE | In accordance with the deferral schemes of the current Remuneration Policies adapted taking into account an all-equity payment (60% deferred over five-year and four-year time horizons). The value of the MB share is determined based on the normal value of the Mediobanca stock in the 30 days prior to the approval of the 23-26 Strategic Plan by the BoD (May 23, 2023 - namely €9.822) |
| MALUS AND CLAWBACK | Malus e clawback as per the Remuneration Policies |
1. All targets are subject to appropriate ECB approvals about € 1 bln buyback and Danish Compromise validation. They refer to the Strategic Plan published on 24 May 2023
1. Climate emissions intensity (tCO2eq./€mil.) Purpose 1-2-3 of loans granted by the CIB division (excluding Specialty Finance) to non-financial counterparties
2. Over the time horizon 1/7/23 - 30/6/2026: includes the change in value of the stock and all dividends distributed during the benchmark period (subject to the implicit assumption that these
dividends are reinvested in the stock itself). Peer used for the purpose of benchmarking CEO remuneration, public in the Remuneration Policy (in 2023 Policy: Barclays, BNP Paribas, Fineco
Bank, Intesa Sanpaolo, Julius Baer Group, Lazard, Santander, Schroders, Société Générale, Unicredit).
For recipients other than the Mediobanca CEO and Group General Manager, the incentive payout curve will be calibrated in accordance with the one defined for the Mediobanca CEO and Group General Manager, but benchmarked based on the target maximum gross annual salary assigned.
Payment of the LTI Plan 2023-26 would have taken place on the terms, conditions and means for the long-term variable remuneration component set forth in the Staff Remuneration Policy based on the following scheme1
The equity component had been valued at €9.822 per share. This is equal to the average Mediobanca stock market price in the thirty days prior to 23 May 2023, the date on which the Board of Directors approved the “One Brand-One Culture” 2023-26 Strategic Plan. No external events occurred during this period, the effects of which would have distorted the performance of financial markets and/or the Mediobanca stock market price.
The actual number of shares to be assigned, subject to the additional performance/malus conditions and/or holding periods provided for in the Staff Remuneration Policy wound have been finalized and rebalanced when the Plan was completed and the variable component has effectively accrued2
1. Mediobanca shares actually awarded post-holding period.
2. In the event of a recipient ceasing to work for Mediobanca in the course of the performance evaluation period for the LTI Plan 2023-26, and assuming they qualify as a “good leaver”, their participation in the Long-Term Incentivization Plan may be confirmed pro rata to the period actually worked by them, subject to assessment of whether or not the scorecard KPIs have reached the requisite levels (this calculation to be made based on the results delivered at the end of the LTI Plan 2023-26)
The Employee Share Ownership and Coinvestment Plan 2023-26 (“ESOP 2023-26”) for Mediobanca and its subsidiaries staff was intended to attract and retain staff with high professional and ethical qualifications, who are suited to the complexity and the increasing internationalization and specialization of the Group’s businesses, based on a rationale of prudent management and sustainability of costs and results over time.
The Employee Share Ownership and Coinvestment Plan 2023-26 (“ESOP 2023-26”) allowed Mediobanca and its subsidiaries staff to take part in a share ownership and/or coinvestment scheme that allowed them, on a voluntary basis, to issue instructions to acquire Mediobanca shares on the market which they will then receive on favourable or “discounted” terms).
The Plan therefore allowed broader participation by the corporate population in the creation of sustainable value, with provision made for the premium to be paid (or the shares “matched”) when certain conditions are met (e.g. shares bought must be held for three years, the recipient must still be employed at the end of the vesting period, and certain KPIs included in the 2023-26 Strategic Plan must be met), with a specific share issue to be made for use in connection with the Plan.
The Plan had the following main advantages:
- Enabling our people to participate directly in achieving the company’s objectives and creating sustainable value;
- Stimulating a sense of involvement and belonging among our staff, thus embedding a culture of ownership;
- Expanding the remuneration strategy with the adoption of innovative instruments;
- Increasing a sense of financial awareness, risk management culture and entrepreneurial spirit among staff;
- Ensuring that the remuneration payable to Group staff is correlated to the achievement of positive results over time, having regard to the performances delivered and the overall sustainability of the compensation mechanisms;
- Achieving alignment with Italian and international best practices.
The Plan was therefore an important motivational tool for the long period, in line with the practice adopted in our reference market.