The general meeting on 28 October 2020 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 remuneration policy:
- rewards the bank areas that generate value based on objective measurement criteria;
- attracts and retains professionals with skills and expertise that meet the group’s requirements;
- is in line with the remuneration policies of other national and international players;
- policy elements are more closely linked to sustainability (CSR) principles;
- a cap on variable remuneration continues to be adopted, set at 200% of fixed remuneration, with the exception of recipients who work in asset management, for whom different limits are set.
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) IV 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.
As part of the attention that the Group focuses on the community and its institutions, the following decisions, for the FY ending at 30 June 2020, were taken:
- The following reductions in emoluments were approved: 20% of the emoluments payable to Directors, and 100% of those payable to the Chairman Renato Pagliaro, the Chief Executive Officer Alberto Nagel and the Group General Manager Francesco Saverio Vinci. The overall saving of €540,000 was donated by Mediobanca to entities and non-profit organizations identified by the Corporate Social Responsibility Committee;
- The Chairman, CEO and Group General Manager have all committed to donating 30% of their fixed salaries for the period from May to December 2020 to initiatives related to the Covid-19 emergency;
- The Statutory Audit Committee of Mediobanca also decided to support the initiatives promoted by the Bank, electing to waive 20% of the emoluments due to them for the year.
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;
- 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;
- the European Commission Delegated Regulation of 4 March 2014, which establishes the qualitative and quantitative criteria for the identification of key personnel (i.e., “identified staff” whose professional activities have a material impact on the risk profile);
- the new Regulatory Technical Standards to identify risk takers based on qualitative and quantitative criteria published by the European Banking Authority (EBA) on 18 June 2020 in application of the new Capital Requirements Directive (“CRD V”). The standards, which are directly applicable to all EU member states, will come into force from January 2021;
- 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;
- consultation document on the consultation ended on 1 December 2019, regarding changes to the Regulations for Issuers on transparency in remuneration, issued by Consob to complete the process of implementing Directive (EU) 2017/828 (“Shareholders’ Rights Directive II”);
- the new version of the Code of Conduct for Listed Companies published in January 2020.