Outline of the remuneration structure for Directors and managers

  FIXED COMPENSATION VARIABLE COMPENSATION
EMPLOYEE CATEGORY BASE (Upfront) PENSION PLAN CONTRIBUTION SHORT TERM INCENTIVE (Annual scorecard) LONG TERM INCENTIVE (Strategic Plan 19 -23)
      5Y deferral - 60% deferred* 5Y deferral - 60% deferred*
  CASH CASH CASH SHARES CASH SHARES
Executive Directors 100% 100% 47% 53% 47% 53%
Non Executive Directors 100%          
Chairman 100% 100%        
Executives Senior Management 100% 100%  47% 53% 47% 53%
      3 Y Deferral - 40/60% deferred*    
Other Executives  (Material Risk Takers) 100% 100% 50% 50%    

* If variable amount equal or higher of € 425.000 

Compensation paid to the members of the management and control bodies, general managers and other key managers

Chairman’s remuneration

The Chairman of the Board receives fixed remuneration only.

Remuneration of non-executive directors

The general meeting establishes fixed fees for the non-executive Directors without any incentives linked to the bank’s performance. They also receive third-party liability insurance coverage.

  New Board compensation
Compensation approved by shareholders in AGM 2,500,000
No. of members 15
Board of Directors
Compensation payable to each Director
Additional compensation payable to Deputy Chair
1,535,000
100,000
35,000
Executive Committee (2 members)
Compensation payable to each member
160,000
80,000
Appointments Committee (4 members)
Compensation payable to each member
Additional compensation payable to Committee chairperson
110,000
25,000
10,000
Risks and Related Parties Committee (5 / 4 members) *
Compensation payable to each member
Additional compensation payable to Committee chairperson
420,000
80,000
20,000
Remuneration Committee (5 members)
Compensation payable to each member
Additional compensation payable to Committee chairperson
160,000
30,000
10,000
Corporate Social Responsibility Committee (4 members)
Compensation payable to each member
40,000
10,000

* “Combined” compensation payable for both Committees (which have only one different member between them).

Remuneration of Mediobanca’s CEO and General Manager

Mediobanca’s CEO and General Manager receive:

  • a base salary;
  • an annual short-term incentive subject to the gateways established in the policies and linked to the achievement of the quantitative/financial performance and qualitative/non-financial performance indicators in individual scorecards which the Board of Directors approves each year upon the proposal of the Remuneration Committee.
    • Each manager’s scorecard sets performance targets within their respective scope of responsibility. For instance, the targets may refer to risk-adjusted profitability; group revenue or the revenue of certain divisions; the profitability or income generated by the individual areas for which they are responsible. Alternatively, they may coincide with other capitalization, liquidity or new business initiative objectives in line with the guidelines in the strategic plan. These performance targets are weighted according to their materiality determined by the Board and considering the effective degree of decisional autonomy.
    • To link to the long-term incentive plan (see below), the annual performance-based pay for the achievement of quantitative/financial objectives is capped at 150% of the annual base salary, although the Board has the power to adjust the cap upward to 160% in order to reward the achievement of non-financial objectives.
    • 60% of performance-based pay is deferred over five years, with 45% paid in cash and 55% in equity. All deferred pay is subject to the performance targets and malus conditions established in the policies. Half of the up-front component is paid in cash and the other half is paid in Mediobanca shares.
  • When it approves the multiannual strategic plan, the Board of Directors may also approve a long-term incentive plan for the CEO and General Manager linked to the achievement of the objectives in the strategic plan.

    Based on their individual scorecards, the pay-out for the achievement of quantitative/financial and qualitative/non-financial targets ranges from 20% to 40% of the CEO’s and General Manager’s gross annual base salary for each year of the plan. The final amount at the end of the plan, based on overall performance, is calculated considering each of the targets in the scorecard and their relative weight.

    At the end of 2019, the Board of Directors approved the long-term incentive plan linked to the 2019-2023 strategic plan. Learn more
     
  • The CEO and General Manager receive directors’ fees but not for serving on the Board Committees. They also receive third-party liability insurance coverage like the other directors, participate in the supplementary pension fund and are eligible for the Mediobanca group’s other management benefits.
  • Until the end of the vesting/holding periods, the CEO is required to hold, even after any stock grants as performance-based pay are effectively vested, a number of Mediobanca shares worth twice the amount of base salary and the General Manager is required to hold shares worth one time such amount (i.e.,  the stock ownership requirement). The equivalent amount of shares – to be reached within five years of the first stock grant – must be held for the entire term of office in order to align senior managers’ interests with those of the shareholders.

CEO - FY 21 STI scorecards

OBJECTIVE WEIGHT
Profit before Taxes (PBT) from Group banking activities/capital absorbed
Optimization of return on capital allocated to core activities)
30%
Cost of risk (Focus on the Group’s principal income source and asset quality) 30%
Total fees/banking revenues (Focus on share of capital-light revenues as %
of total income)
20%
RWA density for banking activities: RWAs/Finrep assets (Focus on loan quality) 20%
A specific CSR objective, with focus on diversity, inclusion
and employee engagement
qualitative
Ongoing strengthening of the distribution platforms for the
Wealth Management and Consumer Banking divisions
qualitative

 

General Manager - FY 21 STI scorecards

OBJECTIVE WEIGHT
Profit before Taxes (PBT) from Group banking activities/capital absorbed
(Optimization of return on capital allocated to core activities)
25%
Cost of risk (Focus on the Group’s principal income source and asset quality) 25%
Cost/income ratio in banking activities (Balanced growth in revenues and costs) 20%
ROAC Wealth Management (Optimization of return on capital absorbed by the WM division)  30%
Maximization of synergies between the distribution
network and product factors
qualitative
Developing a project for all Group companies to adopt an
“agile and smart working platform” consistent with the ESG objectives
qualitative

 

As required by article 78 of Consob resolution 11971 of 14 May 1999, as amended, section 2 of the 2020 remuneration policy lists, for 2019/2020 and naming each recipient, the amounts paid, the stock grants and other equity-based incentive plans benefiting the members of the management and control bodies, the general managers and, at aggregate level, other key managers. Anyone who, in the course of the year, held the aforesaid offices, even for a fraction of the year, is included. Furthermore, additional aggregate quantitative information has been published pursuant to the Bank of Italy’s supervisory requirements.

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