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Governance of the Remuneration process

The Policy on remuneration of the members of Terna’s Board of Directors is defined in compliance with the legislative and statutory provisions, according to which:

  • the Shareholders’ Meeting determines the remuneration to which the Chairwoman and the members of the Board of Directors are entitled, at the moment of their appointment and for the entire duration of the mandate;
  • the Board of Directors determines the remuneration of the Directors with delegated powers for participation in Board Committees, after obtaining an opinion from the Board of Statutory Auditors.

In accordance with Terna’s governance model, the Board is also responsible – in the context of performance plans, to which the determination of the Chief Executive Officer and the General Manager’s variable remuneration is connected – for defining the targets and approving the business results, as well as defining the general criteria for the remuneration of Senior Executives with Strategic Responsibilities.

Finally, in line with the recommendations contained in the Corporate Governance Code, the Board of Directors is supported, for questions of remuneration, by a Remuneration Committee formed by independent Non-Executive Directors, with consultative and advisory functions on the subject.

The table presented below summarises the decision-making bodies, the proposal-making bodies and the supporting structures, for each party involved in the Policy.

In particular, the activities of the Committee were developed within a complex and ongoing process, aimed at defining the new Policy and the related compensation tools as well as preparation of the Report.

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Guidelines

In developing the Policy, the Board took into consideration the principles and criteria contained in the Corporate Governance Code and in particular that the CEO and GM is the addressee of a Policy in which a significant part of the remuneration is linked to the achievement of specific performance targets, including non-economic targets, (e.g. Sustainability indicators).

Similar principles also inspired the Policy for other Senior Executives with Strategic Responsibilities.

In implementing the above principles, we can note that:

  • the remuneration of Directors not holding special office is commensurate to participation in Board Committees, with different fees for the Chairman/Chairwoman compared to the members of each Committee;
  • the remuneration of the Chairwoman of the Board of Directors consists of a fixed amount in line with the role held;
  • the remuneration of the Chief Executive Officer and, if the position exists, of the General Manager, is adequately balanced between:
  • a fixed component, in line with the delegated powers and/or responsibilities attributed and sufficient to remunerate the services should the variable component not be paid due to failure to achieve the performance targets specified by the Board of Directors;
  • a variable component linked to the achievement of pre-established, measurable and well defined objectives in order to remunerate the performance achieved both in the short and long term, in line with the economic and financial targets of the Company’s Strategic Plan;
  • severance payments for the termination of the role of Director, as well as for the position of General Manager in the case of termination of employment, except in specific cases.

Please note that Senior Executives with Strategic Responsibilities will see the implementation of a similar policy to the one provided for the General Manager role.

Finally, the Policy takes into account the nature and risk level compatible with the objectives of Terna’s Strategic Plan, approved by the Board of Directors in its Meeting on 21 March 2018.

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Remuneration components
Remuneration of BoD members
Remuneration of Senior Executives with strategic responsibilities
Compensation in 2017