The general meeting on 28 October 2021 approved the new remuneration policy, which is consistent with the most recent Italian and European regulatory framework, reinforcing governance and remuneration criteria and processes.
The new Mediobanca Group Policy:
- Highlights the link between remuneration policy, corporate sustainability and ESG objectives;
- Provides greater detail on the remuneration structure for the figures of the Chief Executive Officer, Group General Manager and other management with strategic responsibilities;
- Implements the governance rules provided by the new Regulations for Issuers which in turn incorporate the provisions of Shareholders’ Rights Directive, by including details on the procedure to be followed in cases where exemptions must be applied, as provided by Article 123-ter of the Italian Finance Act, in order to guarantee the Group’s long-term sustainability;
- Incorporates the new reporting schemes for changes in the compensation of governing body members, Group results, and the average remuneration of staff and Material Risk-Takers;
- Revises downwards the limits set on the compensation payable to senior management figures and Material Risk-Takers in the event of their leaving Mediobanca, describing the treatment for so-called “good leavers” in greater detail;
- Incorporates the provisions of the draft version of the new Bank of Italy Supervisory Instructions, with reference in particular to the principles of neutrality that guarantee equal treatment regardless of gender or any other kind of diversity issues, stating clearly the Group’s commitment to addressing the gender pay gap;
- Amends the thresholds for applying the deferral mechanisms on variable remuneration assigned to Material Risk-Takers and the time horizon for deferral;
- Contains excerpts from the ex ante and ex post audits carried out by the control units, Compliance and Group Audit in particular.
The following principles have been implemented into the remuneration policies, to make them consistent with the integration of sustainability risks:
- The incentivization systems are correlated to the principles set in the Group Sustainability Policy;
- ESG criteria are integrated into the models for lending, investment and advisory services;
- Sustainability concerns are included in the Group’s business and financial strategies, both short-term and long-term.
With regard to the evaluation and incentivization processes for senior management and staff, increasing consideration is being devoted to the achievement of environmental, social and governance (ESG) objectives with reference to the individual scope of responsibility in business and operating terms.
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:
- the Bank of Italy’s provisions on remuneration and incentive policies and practices, published on 23 October 2018, which update Italian regulations to the European Banking Authority’s Guidelines on sound remuneration policies, in force since 1 January 2017, and other recent international guidance on sound remuneration and the Bank of Italy document on the revision of the same Supervisory Instructions published in November 2020 and currently at the consultation stage, for the adoption of the provisions of CRD V;
- 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 will 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.