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In order to allow an immediate and exhaustive understanding, the main elements and features of the remuneration packages of the Chief Executive Officer, the Executive Directors and Managers with Strategic Responsibilities (MSR) of Prysmian Group are summarized in the following table.
PURPOSE:
It rewards the role held in order to ensure an adequate and competitive fixed remuneration
MAIN CHARACTERISTICS:
It is defined in line with the complexity and responsibilities of the role.
It is set based on internal fairness, so as to guarantee a proper amount with respect to comparable positions, and the external market, so as to support an appropriate level of competitiveness.
It takes into account the individual performance monitored over a long-term period.
AMOUNTS:
PURPOSE:
It rewards the annual performance based on objective and measurable indicators
MAIN CHARACTERISTICS:
It is linked to pre-set annual performance objectives
Key performance indicators:
Incentive Cap - envisaged for all participants
Individual performance (“P3”) - assessment of the quality of the leadership and of the individual contribution to the achievement of objectives; it acts as multiplier of the vested amount (+/- 15%; not applied to the CEO)
Deferral - 50% of the vested amount is deferred and paid as Deferred Share and Matching Share as part of the 2023-2025 LTI Plan
AMOUNTS:
CEO: 67-100% of fixed pay(tgt-max)
COO: 50-100% of fixed pay (tgt-max), excluding multiplier for individual performance
Executive Directors/MSR: 50-75% of fixed pay (tgt-max), excluding multiplier for individual performance
PURPOSE:
It rewards the medium-term performance on the basis of 3-year objectives
It fosters the alignment of interests towards sustainable value creation in the mid to long-term, reinforcing the retention of key resources
MAIN CHARACTERISTICS:
LTI Plan consists of two elements:
Maximum number of shares to be allocated - maximum number of shares that can be allocated for each participant and to the entire Plan
1 - Performance Shares
Free shares granted subject to achieving performance conditions
Vesting – 3 years (2023-2025)
Performance conditions
Lock-up - 2-year period for a portion of the shares granted as Performance Shares
2 - Deferred Shares and Matching Shares
2.1 Deferred Share
Free shares — granted on a deferred basis — equal to 50% of annual amount vested as part of the 2023, 2024 and 2025 MBO Plans
2.2 Matching Shares
0.5 free share for each Deferred Share granted. For the CEO and top managers, the Matching Shares are subject to the achievement of the ESG performance condition
AMOUNTS:
CEO: 300-450% of fixed pay over 3 years (tgt-max)
Executive Directors/MSR: 200-300% of fixed pay over 3 years (tgt-max)
Deferred share
CEO/ Executive Directors/MSR: 50% of annual vested incentive is deferred in shares
PURPOSE:
MAIN CHARACTERISTICS:
The RES Plan is a cash plan intended for a maximum of 17 key resources within the Projects division. It is tied to predetermined four-year performance and execution goals. with an ON_OFF threshold of cumulative EBITDA of the division. 24 months’ fixed pay, in compliance with local laws and contracts
Main performance indicators:
* Take over by the customer of the projects
* Realization of manufacturing investments,
* New product pipeline development
* EBITDA % of Sales
AMOUNTS:
No Executive Director participates in the Plan
PURPOSE:
It supports the recruitment and retention of key resources
MAIN CHARACTERISTICS:
Severance for the end of the office term or termination of employment relationship under specific individual agreements
Not higher than 24 months’ fixed pay, in compliance with local laws and contracts
AMOUNTS:
CEO: 24 months’ fixed pay
Executive Directors/MSR: If envisaged, max 24 months’ fixed pay
PURPOSE:
They protect the company’s interests following the exit of key resources
MAIN CHARACTERISTICS:
Specific individual agreements in relation to the duration and extent of the limitation
In any case, the sum of the severance pay or termination of the employment relationship added to the Non-Competition Agreement does not exceed 24 months of short-term fixed and variable remuneration. For the future, for new non-competition agreements, the duration will be revised to always respect this overall limit.
AMOUNTS:
CEO: validity 3 years; remuneration 40% of gross pay per year of duration of the agreement
Executive Directors/MSR: If envisaged, of variable duration based on the regulatory framework and with maximum remuneration equal to a percentage of fixed pay per year of validity of the agreement
PURPOSE:
They supplement social security and contractual benefits in a total reward perspective
MAIN CHARACTERISTICS:
Social security and medical benefits; company car
PURPOSE:
They help to align in the long term the interests of key resources and those of shareholders
MAIN CHARACTERISTICS:
Over the entire term of office, it is necessary to meet a minimum requirement of ownership of Prysmian shares
AMOUNTS:
CEO: 3x the fixed remuneration
Executive Directors/MSR: 1.5x the fixed remuneration
The Group’s MBO Plan, extended to approximately 2,500 managers and key resources at global level, is made up of four types of objectives connected to generating income and cash, managing ROCE or costs / efficiencies (or other specific objectives relating to each Company Function) and Sustainability/ESG.
The plan has a ON/OFF condition set in alignment with the guidance 2023 and applied to all participants to MBO. In case the threshold level is not achieved, the scheme doesn't activate, and no incentives are paid.
The objectives of the Chief Executive Officer are represented by the following scheme (2023 MBO Scorecard)
The incentive payable is calculated as follows:
For 2022, the MBO Scorecard of the other Executive Directors corresponds to that of the CEO apart from the 3rd objective, which for them is a cost management one; for the other MSRs the Adjusted EBITDA objective is defined according to the Business Division to which they belong.
This set up limits the risk of overlap of targets between MBO and LTI Plans. 15%) based on the individual performance deriving from the "P3" performance management system (not applicable to the CEO).
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