Our compensation approach is consolidated over time under the group governance, to be compliant with the most recent national and international regulatory requirements. Our approach is connected to performance, market awareness and aligned with business strategy and shareholders' interests.
Our Remuneration Policy is a key element to attract, retain and motivate a highly qualified global workforce capable of creating a competitive advantage and to reward those who reflect our ethical standards in conducting business in a sustainable way.
In this context, the compensation strategy represents a key enabler to enhance and protect our reputation and to create value, favoring long-term sustainable results over short-term solutions.
Through appropriate compensation mechanisms, we aim to create a best in class and inclusive work environment, fostering and unlocking individual potential.
2023 Group Remuneration Policy - Key Pillars
BUSINESS & RISK STRATEGY AND COMPANY VALUES
- Sustainable pay for sustainable performance
- Clear and transparent governance
- Continuous monitoring of market trends and practices
- Compliance with regulatory requirements and principles of good business conduct
- Motivation, retention and fair treatment of all employees
Compensation approach and framework
Our total compensation approach provides for a balanced package of fixed and variable, monetary and non-monetary elements, each designed to impact in a specific manner the motivation and retention of employees. In line with the applicable regulations, particular attention is paid to avoid incentive elements in variable compensation which may induce behaviors not aligned with the company's sustainable business results and risk appetite.
- Fixed remuneration is the part of remuneration that is stable and irrevocable, determined and given based on the pre-defined criteria and not discretionary, such as, in particular, the professional experience and responsibility level, that does not create an incentive to risk assumption and does not depend on the bank's performance
- The relevance of fixed compensation weight is sufficient to reward the activity rendered even if the variable part of the remuneration package was not paid due to non-achievement of performance goals. In this way we intend to reduce the risk of excessively risk-oriented behaviors and to discourage initiatives focused on short-term results.
- Variable compensation aims to remunerate achievements by directly linking pay to performance outcomes in the short, medium and long term. This is then risk adjusted.
- To strengthen the alignment of shareholders' interest and the interests of management and employees, performance measurement reflects the actual results of the Company overall, the business unit of reference and the individual. As such, variable compensation constitutes a mechanism of meritocratic differentiation and selectivity.
- Short-term remuneration aims to attract, motivate and retain strategic resources
- Payout is based on a bonus pool approach providing for a comprehensive performance measurement at individual and at Group/Country/division level
- Reward is directly linked to performance, which is evaluated on the basis of results achieved and on the alignment with the leadership model and values.
- Long-term remuneration aims to strengthen the link between variable compensation and Company results and further align the interests of senior management and shareholders.
Benefits complete the total compensation perspective and aim to reflect internal equity and overall coherence of the remuneration systems, meeting the needs of different categories as appropriate and relevant.
Benefits include welfare benefits that are supplementary to social security plans, healthcare and work-life balance benefits and are intended to provide substantial guarantees for the well-being of staff and their family members during their active career as well as their retirement.
Special terms and conditions of access to various banking products and other services may be also offered to employees.
Severance payouts take into consideration long-term performance, in terms of shareholders' added value. They do not reward failures or abuses and shall not exceed in general 24 months of total compensation, including notice (in case of lack of law/National Labour agreement provisions as locally applicable).
Individual contracts should not contain clauses envisaging the payment of indemnities, or the right to keep post-retirement benefits, in the event of resignations or dismissal/revocation without just cause or if the employment relationship is terminated following a public purchase offer. In case of early termination of the mandate, the ordinary law provisions would therefore apply.
Ratio between variable and fixed compensation
In compliance with applicable regulations, for the personnel belonging to the business functions, a maximum ratio between variable and fixed remuneration of 2:1 is adopted.
Positions entitled to a variable to fixed ratio of potentially up to a maximum of 2:1 are:
- Group Chief Executive Officer;
- Heads of Italy, Germany, Central Europe, Eastern Europe and Client Solutions, Digital & Information Officer and Group Operating Officer;
- CEO and General Managers of Group Legal Entities;
- Personnel belonging to Business Divisions (e.g. Client Solutions, Commercial Banking), excluding control or support roles.
For the rest of the staff a maximum ratio between the components of remuneration equal to 1:1 is usually adopted, except for the staff of the Corporate Control Functions, for Human Resources and the Manager in Charge of Drafting the Company Financial Reports for which it is expected that fixed remuneration is a predominant component of total remuneration.
It is proposed to the 2023 Annual General Meeting to restore, from 2023 onwards, the wider application of the 2:1 ratio between variable and fixed compensation to the whole population, excluding the Corporate Control Functions and other Functions for which a more stringent regulatory cap applies.