Remuneration

We are committed to ensuring a remuneration policy compliant with national and international best practices, which supports and encourages our development, is consistent with our Strategic Plan and Sustainable Value Creation Plan and responds to the value and culture of the company.

Our Remuneration Policy has a strong link with the Strategic Plan and the Sustainable Value Creation Plan and represents an element of fundamental importance to ensure the pursuit of the strategic objectives of business sustainability and value creation in the medium to long term. Consistent for the generality of the corporate population and developed taking into consideration the feedbacks from shareholders and investors, it is also designed to ensure complete alignment of the risk profile between the Group and Management.

Remuneration Policy

The Remuneration Policy of Italgas, assessed and approved by the Board of Directors on the proposal of the Appointments and Remuneration Committee and defined in accordance with the governance model adopted by the company and with the provisions of the Issuers’ Regulations and the Corporate Governance Code, is aimed at:

Promote sustainable success

Through the pursuit of the objectives of the Strategic Plan and the Sustainable Value Creation Plan, improving the long-term financial and non-financial results.

Pursue and promote the creation of value

For the various company stakeholders: employees, shareholders, local communities, suppliers.

Attract, retain and motivate people with high professional qualities

Through the recognition of the responsibilities assigned, the results achieved, the quality of the profuse professional contribution and the people’s development potential, considering the company’s leadership model and values.

Encourage the commitment of key resources

Through the definition of incentive systems connected to the achievement of economic-financial, business development, sustainability, operational and individual objectives.

Stimulate actions and behaviours

Responding to the values and culture of the company, in compliance with the principles of meritocracy, inclusion and plurality, equal opportunities, enhancement of people’s knowledge and professionalism, fairness, non-discrimination and integrity required by the Code of Ethics.

The remuneration of the Chief Executive Officer and Executives with Strategic Responsibilities is suitably balanced between a fixed component in line with the powers and responsibilities assigned, and a variable component defined within maximum limits and aimed at linking remuneration to actual performance.

 

Moreover, in line with international best practices, “claw-back” mechanisms have been established 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, in any case, implemented in violation of the reference standards) or on data that have proven to be manifestly incorrect.


The Remuneration Policy was approved by the Shareholders’ Meeting with a favourable vote always above 92% in the last 5 years. Details of the results for the last 3-year period is represented below.

 

2023 Guidelines

The 2023 Remuneration Policy was defined in consideration of specific remuneration benchmarks and the best practices of the national and international markets.

It is based on some key principles:

Consistency

Through intense internal and external benchmarking to ensure full alignment with the main market and governance practices.

Listening

Through constant and deep dialogue with all internal and external stakeholders in order to ensure full consistency between the Remuneration Policy and the key drivers of the Strategic Plan and the creation of value for shareholders.

Sustainability and inclusion

Ensuring, in addition to the connection of remuneration to short, medium and long-term objectives and the link with the share price, constant and increasing attention, already initiated in recent years, to all ESG issues, for example through the inclusion of the main ESG objectives in incentive plans aimed at Top Management, ensuring strong alignment with the materiality matrix and with Italgas’ sustainability strategy.

The strong link between remuneration and sustainability objectives is therefore consolidated, by the confirmation of the alignment of the weight of the sustainability indicators to that of the main economic-financial metrics as regards short-term variable remuneration and the increase of the weight of sustainable indicators in the long-term variable component.

What our policy envisages

  • Remuneration policy and variable incentive plans closely linked to the Strategic Plan and the Sustainable Value Creation Plan, with predetermined, measurable and consistent objectives with the interests of the various stakeholders.
  • Objectives that entail an assessment of corporate performance both in absolute and relative terms, with third-party verification where possible.
  • Consistency of comprehensive remuneration with respect to the market references subject to annual assessment to make sure of being constantly in line with best practices.
  • Balanced pay mix, aimed at aligning remuneration with performance effectively achieved, with a significant incidence of the medium/long-term variable components (including with equity instruments) for the Top Management.
  • Adequate vesting and deferral periods of incentives over a time frame of at least three years.
  • Adoption of claw-back mechanisms in the event of error, negligence and gross intentional violation of laws and/or regulations.
  • Structured engagement plan to obtain shareholders’ expectations and feedback.
  • Remuneration policy strongly oriented towards meritocracy and defined in compliance with the principles of plurality, equal opportunities, enhancement of people’s knowledge and professionalism, fairness, non-discrimination and integrity.
  • Provision of shareholding guidelines for the Chief Executive Officer, introduced for the first time in 2023, aimed at strengthening the link with shareholder interests.

Remuneration Structure for Italgas’ Management Team

The architecture for managerial remuneration in place is based on three components:

Fixed remuneration

 

Remunerates for the role held, in order to ensure attractiveness and motivation. Is it defined in accordance with the complexity and responsibilities that the role manages, in order to guarantee internal equity, and is monitored with respect to the external market, to guarantee the right level of competitiveness.

Short-term incentive

 

This defines a clear and predetermined link between remuneration and annual performance. The value depends on the level of attainment of economic-financial and sustainability targets set by the Board of Directors.

2023 objectives for the Chief Executive Officer

   KPI

Weight

   Profitability (EBITDA)

30%

    Investment (spending)

25%

    Net Financial Position

20%

    Sustainability:

  • Accident frequency index
  • Leakage on the distribution network (as % of network km inspected)
  • Energy intensity
  • Diversity and inclusion
 

5%

7,5%

7,5%

5%

The results of each objective are measured on a performance scale (minimum, target and maximum) associated with a score ranging from 70% (against the minimum performance) to 130% (against the maximum performance). In the event of an overall score of less than 85%, no incentives will be paid (so-called performance gate).

65% of the accrued bonus is paid up-front in cash (Short-Term Incentive – STI), while the remaining 35% is deferred for 3 years and transformed into Italgas shares (Co-investment Plan).

Long-term incentive

 

Co-investment Plan

Assures consistency between the annual and multi-annual performance, favoring active involvement of the management in the company risk capital and significant alignment with shareholders’ interests.

The actual assignment of the shares is subject to a performance condition represented by the cumulative EBITDA in the reference three-year period, according to the budget and Strategic Plan values, measured on a performance scale equal to 70 points against the minimum performance, 130 points against the target performance and 170 points against the maximum performance. Depending on the level of performance achieved, a matching is also envisaged by the company, which consists of a predefined number of shares in addition to those initially allocated. If the minimum target is not achieved, no share shall be assigned and therefore not even the deferred portion of STI will be disbursed.

Long-Term Incentive Plan (LTI)

Provided for managerial roles with the greatest impact on results, it favors the alignment of individual objectives with those of stakeholders in the long-term, also performing a retention function.

The new plan, launched in 2023, provides the annual allocation of a monetary amount equal to a predefined percentage of the fixed remuneration and the disbursement of the incentive after 3 years (vesting period) in a percentage between 0 and 130% and to an extent connected to the weighted variation of the following parameters:

 

Objectives of the 2023-2025 Long-Term Incentive Plan
(2023 allocation)

   KPI

Weight

   Consolidated Net Profit

50%

   Relative Total Shareholder Return

30%

   Sustainability:

  • Reduction of CO2 emissions – scope 1 e 2
  • Reduction of net energy consumption
 

10%
10%

Our remuneration Policy does not provide for Stock Options.

2022 Remuneration

The 2022 Compensation Policy, as verified by the Appointments and Compensation Committee during the periodic assessment required by the Corporate Governance Code, was implemented in accordance with the general principles referred to in the resolutions passed by the Board of Directors and was consistent with the 2022 Remuneration Policy, both in the market references found and in terms of overall positioning and pay mix.

The incentives pertaining to 2022 were defined on the basis of the final statement of results for the year, as accrued within the Italgas Group and approved by the Board of Directors following the verification carried out and proposal made by the Appointments and Compensation Committee of Italgas.

Compensation paid to Directors, Statutory auditors and Executives with Strategic Responsibility

1. Alberto Dell’Acqua – Chairman of the Board of Directors

a) The amount includes the fixed annual compensation for the duties assigned by the Board of Directors’ meeting of 23 September 2019, pro rata temporis for the office held from 1 January 2022 to 26 April 2022, and includes the compensation established by the Shareholders’ Meeting of 4 April 2019 for the office of Director.

2.Benedetta Navarra – Chairman of the Board of Directors 

(a) The amount includes the fixed annual compensation for the duties assigned by the Board of Directors’ meeting of 15 September 2022, pro rata temporis for the office held from 26 April 2022 to 31 December 2022, and includes the compensation established by the Shareholders’ Meeting of 26 April 2022 for the office of Director.

3. Paolo Gallo – Chief Executive Officer  

(a) The amount of 844,062.70 euros includes:

    • the fixed compensation, pro rata temporis, approved by the Board of Directors at its meeting on 23 September 2019 for the office held from 1 January 2022 to 26 April 2022, which includes the compensation established by the Shareholders’ Meeting of 4 April 2019 for the office of Director; 
    • the fixed compensation, pro rata temporis, approved by the Board of Directors at its meeting on 15 September 2022 for the office held from 26 April 2022 to 31 December 2022, which includes the compensation established by the Shareholders’ Meeting of 26 April 2022 for the office of Director;
    • the allowances due for national and international travel undertaken, in accordance with the national collective labour agreement for the relevant Executives and supplementary company agreements (in the total amount of 5,015 euros). 

(b) The amount relates to 495,482 euros of the 2022 annual monetary incentive to be paid in 2023 and 557,343 euros relating to the Long-Term Monetary Incentive allocated in 2020 and to be paid in 2023.
In addition, in 2022 the following incentives pertaining to 2021 were paid: 472,165 euros relating to the 2021 annual monetary incentive; 632,290 euros relating to the Long-Term Monetary Incentive awarded in 2019 and paid in 2022. 

(c) The amount corresponds to the value of the fringe benefits assigned, on an accrual and taxability basis. 

(d) The amount relates to the gross-up value of the Chief Executive Officer’s car.  

(e) The amount corresponds to the fair value on the date on which compensation pertaining to the financial year was allocated with respect to the incentive plans based on financial instruments, estimated according to international accounting standards.

4. Andrea Mascetti – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

(b) The amount includes the fixed annual remuneration established by the Board of Directors’ meeting of 13 May 2019 for participation, as Chairman, in the Appointments and Compensation Committee, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

5. Giandomenico Magliano – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as Chairman, in the Sustainability Committee and for participation, as a Member, in the Control, Risk and Related Party Transactions Committee, pro rata temporis for the positions held from 1 January 2022 to 26 April 2022.

6. Veronica Vecchi – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as a Member, in the Sustainability Committee, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

7. Silvia Stefini – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as a Member, in the Appointments and Compensation Committee and participation, as a Member, in the Control, Risk and Related Party Transactions Committee pro rata temporis for the offices held from 1 January 2022 to 26 April 2022.

8. Maurizio Dainelli – Non-executive Director 

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022. The compensation is paid to the company to which he belongs (Cassa Depositi e Prestiti S.p.A.).

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as a Member, in the Appointments and Compensation Committee, pro rata temporis for the office held from 1 January 2022 to 26 April 2022. The compensation is paid to the company to which he belongs (Cassa Depositi e Prestiti S.p.A.).

9. Yunpeng He – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 27 January 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as a Member, in the Sustainability Committee, pro rata temporis for the office held from 1 January 2022 to 27 January 2022.

10.Paola Annamaria Petrone – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as Chairman, in the Control, Risk and Related Party Transactions Committee, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

11. Qinjing Shen – Non-executive Director

(a) The amount includes the fixed annual compensation established by the Shareholders’ Meeting of 4 April 2019 for the office of Director, pro rata temporis for the office held from 27 January 2022 to 26 April 2022, and the fixed annual compensation established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 13 May 2019 for participation, as a Member, in the Sustainability Committee, pro rata temporis for the office held from 27 January 2022 to 26 April 2022, and the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as a Member, in the Sustainable Value Creation Committee, pro rata temporis for the office held from 2 May 2022 to 31 December 2022.

12.Maria Sferruzza – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as a Member, in the Sustainable Value Creation Committee, pro rata temporis for the office held from 2 May 2022 to 31 December 2022.

13.Manuela Sabbatini – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as a Member, in the Appointments and Compensation Committee and for participation, as a Member, in the Control, Risk and Related Party Transactions Committee, pro rata temporis for the offices held from 2 May 2022 to 31 December 2022.

14. Claudio De Marco – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as a Member, in the Appointments and Compensation Committee and for participation, as a Member, in the Control, Risk and Related Party Transactions Committee, pro rata temporis for the offices held from 2 May 2022 to 31 December 2022.

15. Lorenzo Parola – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual remuneration established by the Board of Directors’ meeting of 18 May 2022 for participation, as Chairman, in the Appointments and Compensation Committee, pro rata temporis for the office held from 2 May 2022 to 31 December 2022.

16. Fabiola Mascardi – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as Chairman, in the Sustainable Value Creation Committee, pro rata temporis for the office held from 2 May 2022 to 31 December 2022.

17. Gianmarco Montanari – Non-executive Director

(a) The amount includes the fixed annual remuneration established by the Shareholders’ Meeting of 26 April 2022 for the office of Director, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

(b) The amount includes the fixed annual compensation established by the Board of Directors’ meeting of 18 May 2022 for participation, as Chairman, in the Control, Risk and Related Party Transactions Committee, pro rata temporis for the office held from 2 May 2022 to 31 December 2022.

18. Pier Luigi Pace – Chairman of the Board of Statutory Auditors

(a) The amount includes the fixed annual compensation established by the Shareholders’ Meeting of 4 April 2019 for participation, as Chairman, in the Board of Statutory Auditors, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

19. Giulia Pusterla – Chairman of the Board of Statutory Auditors

(a) The amount includes the fixed annual compensation established by the Shareholders’ Meeting of 26 April 2022 for participation, as Chairman, in the Board of Statutory Auditors, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

20. Marilena Cederna – Standing Auditor

(a) The amount includes the fixed annual compensation established by the Shareholders’ Meeting of 4 April 2019 for participation, as a Standing Auditor, in the Board of Statutory Auditors, pro rata temporis for the office held from 1 January 2022 to 26 April 2022.

21. Maurizio Di Marcotullio – Standing Auditor

(a) The amount includes the annual fixed compensation established by the Shareholders’ Meeting of 4 April 2019 for participation, as a Standing Auditor, in the Board of Statutory Auditors.

22. Paola Maiorana – Standing Auditor

(a) The amount includes the fixed annual compensation established by the Shareholders’ Meeting of 26 April 2022 for participation, as a Standing Auditor, in the Board of Statutory Auditors, pro rata temporis for the office held from 26 April 2022 to 31 December 2022.

23. Executives with Strategic Responsibilities

(a) The amount of 2,367,536.18 euros corresponds to the Gross Annual Salary and the allowances for national and international travel undertaken, in accordance with the national collective labour agreement for the relevant Executives and supplementary company agreements, totalling 55,623.69 euros.

(b) The amount of 1,951,587.04 euros includes:

      • The gross aggregate value of the 2022 annual monetary incentive to be paid in 2023, amounting to 973,603.44 euros;
      • The gross aggregate value of the Long-Term Monetary Incentive allocated in 2020 and to be paid in 2023, amounting to 583,795 euros;
      • The monetary value of the rights relating to the 2018-2020 Co-Investment Plan paid to two Executives with Strategic Responsibilities appointed as Independent Operators / Compliance Managers, equal to 181,391.44 euros;
      • The monetary value of the rights paid to an Executive with Strategic Responsibilities who terminated his employment in 2022, amounting to 212,797.16 euros.

In addition, in 2022 the following incentives pertaining to 2021 were paid: 919,295.24 euros relating to the 2021 annual monetary incentive; 548,419 euros relating to the Long-Term Monetary Incentive allocated in 2019 and paid in 2022; 154,202.69 euros as the monetary countervalue of the rights relating to the 2018-2020 Co-investment Plan disbursed in 2022 to two Executives with Strategic Responsibilities appointed as Independent Operators / Compliance Managers.

(c) The amount corresponds to the value of the fringe benefits assigned, on an accrual and taxability basis.

(d) The amount corresponds to the fair value on the date on which compensation pertaining to the financial year was allocated with respect to the incentive plans based on financial instruments, estimated according to international accounting standards.

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