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Overview

Economic crisis and stagnation have brought about an increase in the weighting of the variable component in executive compensation packages compared to that of the fixed component and of benefits.

In particular in Italy, in light of the indications of the Bank of Italy and the Self-Governance Code for Quoted Companies, there has been a consolidation of trends characterised by:

  • a growing correlation between executive remuneration levels and the annual and three year performance of the company
  • increasingly more specialised involvement of Remuneration Committees
  • the prevalence of financial objectives both in annual and long term plans, with still limited space for objectives of sustainability, customer satisfaction, safety, etc.
  • a prevalence of cash over equity in long term plans in the average company
  • for companies adopting equity-linked plans, a prevalence of plans with guaranteed performance compared to stock options.

Our consultant support Remuneration Committees in defining the remuneration policies for executive and non-executive directors, senior management and statutory auditors, as provided for by the Self-Governance Code of the Italian Stock Exchange, and the Bank of Italy Regulations.

In particular:

  • we perform remuneration benchmarking at a national and international level, utilising information from our databases and those of IIC Partners
  • we design variable remuneration plans which are both short- and long-term, linking them with annual and three year business objectives
  • we suggest a peer group with which the company can compare itself in order to define how it is positioned.

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