Remuneration

We are committed to guaranteeing a remuneration system aligned with international best practices, which supports and facilitates our development, is consistent withour strategic plan and is inspired by the principles of merit, impartiality and moderation.

Our remuneration system, under the guidance of the Appointments and Remuneration Committee, recognises the responsibilities assigned and the results achieved, evaluates the quality of the professional contribution, encourages the development of individuals and the management team and complies with the principles of equal opportunity stated in the Code of Ethics and always present in our organisational approach.

The remuneration system is designed to attract, retain and motivate a management team with strong professional qualities, able to successfully manage the company, contributing to the alignment of the shareholders’ and stakeholders’ interests with the actions of management with a view to creating medium/long-term value.

Remuneration Policy

The Remuneration Policy is defined in accordance with the governance model adopted by the company and with the recommendations of the Corporate Governance Code, contributing to achievement of the mission and corporate strategies by:

• promoting activities and conduct in line with the company's culture, while respecting the principles of diversity, equal opportunity, and the development of skills, professionalism, impartiality, non-discrimination and integrity;
• recognising the responsibilities assigned, the achievements and quality of the professional contribution made, while taking account of the reference context and the reference remuneration markets;
• defining incentive systems linked to the achievement of economic/financial, business development and operational and individual objectives, defined in terms of the sustainability of results in the long term, in line with guidelines in the Strategic Plan and the assigned responsibilities.

In addition, the remuneration for the Chief Executive Officer, the General Director of Finance and Services and key managers have a suitable balance between a fair fixed component in line with the powers and/or responsibilities assigned and a variable component defined within maximum limits and aimed at linking remuneration to actual performance.

Lastly, note that in line with international best practices, we have adopted claw-back mechanisms aimed at recovering the variable part of the compensation that is not payable since it was received on the basis of targets achieved as a result of intentional misconduct or gross negligence or on data that have proven to be manifestly incorrect.

2020 Guidelines

The 2020 Remuneration Policy guidelines focused on two convergent tasks: on the one hand to ensure continuity with the system established over the past three years, particularly in view of the broad consensus expressed by shareholders regarding the 2019 Compensation Report, which summarized its contents. On the other hand, an innovative review was carried out of some aspects of the incentive systems with the aim of ensuring an even better reflection of the short and long-term corporate objectives set out in the 2019-2025 Strategic Plan. Italgas believes this meets the expectations of Italgas stakeholders and implements national and international best practices.

As part of this innovation, the review of the objectives on which the short and long-term variable incentive systems are based is particularly important in giving more systematic space to the themes of sustainable success.

Among the changes:

• for the first time, objectives have been included in the Long Term Incentive Plan to reduce emissions and consolidate the presence of Italgas in the main sustainability indexes, including the Dow Jones Sustainability Index, which testify to consistent and systematic commitment in the various areas outlined by the United Nations' SDGs (Sustainable Development Goals).
• the sustainability indicators of the Short-Term Incentive system have been carefully reviewed with the introduction of a gender equality goal. The latter is connected with and stresses the importance in management incentive systems of the more complete Diversity and Inclusion Policy adopted by the Italgas Board of Directors during 2019 and implemented through the 2019-2021 Programme Lines and Actions regarding diversity and inclusion.

Moreover, in the regulatory context, there was an important change with the approval of Legislative Decree no. 49 of 10 May 2019, the applicable contents of which are fully transposed into the 2020 Remuneration policy. Among the news, starting from this year, the votes cast at shareholders' meetings regarding the Remuneration Policy are binding on decisions made by the company.

The Appointments and Remuneration Committee has assessed the 2020 remuneration policy guidelines to be consistent with the applicable market references.

The Italgas management remuneration structure

2019 Remuneration

The implementation of the 2019 Compensation Policy, as verified by the Nominations and Compensation Committee on the occasion of the periodic assessment prescribed by the Code of Corporate Governance, remained in line with the general principles referenced in the resolutions passed by the Board of Directors and it was found to be consistent with the 2019 Compensation Policy, as regards market benchmarks, both in terms of overall positioning and pay-mix.

The incentives disbursed in 2019 were paid out as a result of the final accounting for the 2018 results accrued within the Italgas Group and resolved by the Board of Directors of Italgas upon verification and proposal of the Italgas Nominations and Compensation Committee. The 2018 results have been brought forward in the 2019 Compensation Report.