Performance share scheme

Through the performance share scheme, we allocate shares to group staff based on the assessment of performance and of the results achieved. This allows us to align the interests of our management and our shareholders, in the creation of long-term value.

The scheme involves the allocation of Mediobanca shares to beneficiaries as the equity component of the variable remuneration awarded to them at the end of annual or long-term performance assessment process, provided the performance conditions set in the remuneration policies are met.

There are two reasons why we have adopted performance shares as the instrument for variable remuneration:

  • to bring us into line with regulatory requirements for part of the remuneration to be paid in equity instruments, over a long-term period, subject to performance conditions, i.e. the sustainability of positive results over time
  • to align our management's interests with those of our shareholders for the creation of value in the medium/long-term

The current scheme was approved by shareholders in the general meeting of 28 October 2015 - updated at 28 October 2019 - and is aligned to the applicable regulations on remuneration, and in particular to the Bank of Italy supervisory instructions of October 2018 on remuneration and incentive policies and practices.

FEATURES OF THE SCHEME

  • The performance shares allocated as upfront equity component are subject to a holding period of no less than one year before they are actually awarded, subject to the beneficiary continuing to work with the Mediobanca Group.
  • The performance shares awarded as deferred equity component are:
    • Assigned within an overall vesting period for all deferred components over a time horizon of at least three years, provided that the beneficiaries are still employed by the Group[1] and that the additional performance conditions stipulated in the remuneration policies in force at the time regarding the sustainability of the results achieved have been met, with the conditions regarding the company’s capital solidity and liquidity and/or proper individual conduct in particular respected.
    • Subject to a further holding period of at least one year prior to the their actual assignation, which remains conditional upon the beneficiary continuing to work with Mediobanca.

PERFORMANCE CONDITIONS

These are identified in the remuneration policies and currently require the following:

  • the beneficiary must still be a group employee and must not be serving a period of notice for resignation or dismissal
  • the gateway performance conditions must be met in each financial year
  • the business units of the beneficiaries must achieve a positive risk-adjusted result net of extraordinary items and the effects of strategic decisions, as ratified by the risk management unit and the control and risks committee
  • the beneficiary has not committed any significant compliance breaches (i.e. has not been subject to disciplinary measures under the terms, among others, of Mediobanca’s code of ethics, organisational model, business conduct policy and other internal regulations), and no losses have been incurred that were attributable to their actions

As a result, staff are required, according to their role and business activity, to conduct themselves at all times in such a way as to ensure that Mediobanca retains a solid capital base, a strong liquidity position and control of all risks, as well as positive earnings, to guarantee the long-term sustainability of the remuneration systems.

Last update: 29/10/2019