The general meeting on 28 October 2022 approved the new remuneration policy, which is consistent with the most recent Italian and European regulatory framework, reinforcing governance and remuneration criteria and processes.
Compared to the previous version, the new Mediobanca Group policy:
- Provides increased transparency on the structure of the remuneration package for the Chief Executive Officer, the Group General Manager, other management with strategic responsibilities and the Group’s leading Material Risk Takers;
- Analyses aspects by which the Group’s incentivization system is aligned with its risk profile, with a focus on the Key Performance Indicators (or KPIs) identified to ensure a strong pay for performance culture and on the operating instruments adopted for such purposes;
- Focuses on the improvement in the governance process, with the broader involvement of the Risks Committee and the increased role of the Remunerations Committee;
- Adopts the provisions of the new Bank of Italy Supervisory Instructions for application of the sector regulations to the non-banking activities represented within the Group and subject to different regulations;
- Strengthens the disclosure to ensure increased transparency and clarity.
In line with the past, the policy:
- Highlights the link between remuneration policy, corporate sustainability and ESG objectives;
- Is aligned with the applicable regulations;
- Enables the areas of the Bank and Group which create value, including in corporate social responsibility terms, to be suitably rewarded based on objective performance criteria;
- Allows the Group to attract and retain professionals with the skills appropriate to its needs;
- Is aligned with the policies adopted by other leading Italian and international operators.
Performance-based pay cap of 200% of base salary
As established by the European Capital Requirements Directive (CRD) package applicable to banks, we have capped performance-based pay at 200% of base salary.
This cap enables us to:
- maintain flexibility and minimise fixed costs;
- align interests and encourage the achievement of sustainable results;
- attract and retain talent in a competitive market context;
- reward performance and tie individual performance to the bank’s results.
Bonuses are paid subject to the achievement of specific indicators known as gateways. Individual bonuses are based on the documented assessment of quantitative and qualitative performance, with a specific focus on compliance.
Departures from this cap (up to 5:1) are permitted for Asset Management personnel not subject to the banking regulations (see above).
All the gateways were met for the payment of performance-based pay:
- the required capital and liquidity ratios defined in the risk appetite framework were confirmed;
- the group generated an operating profit;
- the CEO and General Manager achieved the targets in their scorecards. They will receive their performance-based pay over five years, subject to additional checks on the performance, malus conditions and clawback clauses.
We prepare our remuneration policy with a constant focus on Italian and European regulations and the most recent documents published by the supervisory authorities. In particular, we follow:
- Bank of Italy instructions on “Remuneration and Incentivization Policies and Practices”, published by the Bank of Italy in November 2021
- the Bank of Italy’s provisions on the transparency of banking and financial transactions and services and correct conduct between intermediaries and customers, issued on 19 March 2019;
- Italian Legislative Decree no. 49 of 10 May 2019, transposing into Italian law Directive (EU) 2017/828 (i.e., the Shareholders’ Rights Directive), which requires the remuneration and incentive policy to contribute to a business strategy of sustainable profitability in the long term based on a clear presentation of objectives and the new Regulations for Issuers on transparency in remuneration, issued by Consob on 15 December 2020 to complete the process of implementing the same Directive (EU);
- the new Regulatory Technical Standards to identify risk takers based on qualitative and quantitative criteria included in Commission Delegated Regulation (EU) 2021/923 of the European Commission of 25 March 2021 published in the Official Journal of the European Union on 9 June 2021, and directly applicable in each of the Member States. These standards in turn incorporate the Regulatory Technical Standards defined by the European Banking Authority (EBA) on 18 June 2020 and in force as from 2021 in application of the new Capital Requirements Directive (“CRD V”);
- technical Standards on public disclosures by institutions, including relating to remuneration policies, and supervisory reporting implementing changes introduced in the revised Capital Requirements Regulation (“CRR II”) published by the EBA on 24 June 2020, applicable as from 30 June 2021;
- the revised Guidelines on sound remuneration policies published by the EBA on 2 July 2021, which apply as from 31 December 2021;
- the ECB Guide on climate-related and environmental risks, published in November 2020, and the EBA Report on management and supervision of ESG risks for credit institutions and investment firms, published in June 2021, which require ESG parameters to be included in staff remuneration and incentivization mechanisms.
- the Code of Conduct for Listed Companies published in January 2020.