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CHAIRMAN’S LETTER

Dear Shareholders,

It gives me great pleasure to provide you with the 2016 Remuneration Report. The aim of this document is to increase our stakeholders’ awareness of our remuneration policies and show that they are consistent with our business strategies. We have updated the report, giving it a new look and new design, so as to provide an ever clearer and more transparent disclosure. In 2016, we focused on matters relating to remuneration and ensured constant dialogue with investors on these matters too. We operated with a view to consolidating and adapting the existing remuneration instruments, taking a responsible approach based on performance and sustainability. Moreover, since the start of 2016, the Committee has been assigned specific duties concerning sustainability, promoting initiatives intended to increase the Group’s sustainability at different levels and particularly as regards environmental, social and economic aspects. The importance of these matters within the Group is such that the short-term incentive system goals set for top management in 2017 include a goal relating to the achievement of a sustainability target, as better explained in the relevant paragraph. One of the most important activities undertaken by the Committee in 2016 is the launch of a second share purchase plan at special conditions, the “YES Plan” (Your Employee Share); the plan has been in place since 2013 and is allowing all Group employees in 28 different countries to purchase shares in the company at special conditions. Including the participants who joined following the December 2016 campaign, it is estimated that there are now over 50% employee shareholders. We believe that YES is an important instrument for strengthening employee involvement and their sense of belonging to our Group. In 2016, the Committee also offered its support in the construction and revision of the remuneration packages of Executive Directors with specific functions, Managers with strategic responsibilities and the Group Compliance and Internal Audit Manager, in line with the Group’s internal policies and best market practices. Another important activity that took place in 2016 was the Committee’s implementation of the succession plan for senior positions in the Group. This plan is based on the talent assessment process (P4), flanked by an assessment process involving an international partner, which added a market perspective to internal feedback. Finally, as part of HR management, Prysmian set itself the strategic aim of enhancing diversity and equal opportunities in the company; therefore, it embarked on a route that started with the implementation of a Global Diversity and Inclusion Policy and the development of dedicated supporting initiatives. In 2016, initiatives included Prysmian’s launch of the “Side By Side” program, aiming to promote and support diversity in the company. The scope of activities will initially regard support of gender diversity before thereafter extending to include other types of diversity (age, culture, etc.). In 2017, Prysmian will also continue the path started several years ago, which strives to create an effective, competitive remuneration system that ensures the attraction, retention and reward of the best talent, in line with the corporate performance and our shareholders’ expectations, as well as with regulatory requirements.

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Giovanni Tamburi

The Chairman of the Remuneration, Nomination and Sustainability Committee

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Pay Mix

The remuneration package of the Executive Directors with specific functions, as well as the Managers with strategic responsibilities of the Prysmian Group, is as follows

• a significant portion is connected with the achievement of predetermined results (focus on performance)

• a significant portion of the amount is deferred over time and is also connected with long-term goals (sustainability)

• the remuneration is mostly paid in shares (participation)

Pay Mix

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The goals of the Chief Executive Officer for 2017 ex-ante disclosure

The goals of the Chief Executive Officer and General Director of Prysmian, approved by the Board of Directors in the meeting held on 1 March 2017, on the proposal of the Remuneration, Nomination and Sustainability Committee, are shown below:
The goals of the Chief Executive Officer for 2017 ex-ante disclosure

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No disclosure is given on the target performance level for each indicator because it is price-sensitive information. Each May, Prysmian informs investors of the expected performance range.

The targets specified on the sheets are mainly those specified in the financial statements and are measured using the same reporting criteria.

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Fees paid to members of the board of Director, general managers and other managers with strategic responsabilities in 2016

Full name
 
Position held
 
Total remuneration (€)
 
Valerio Battista Chief Executive Officer 1.351.229
Fabio Romeo Chief Strategy Officer 811.615
Pier Francesco Facchini Chief Financial Officer 663.262
Massimo Battaini SVP Business Energy Projects 793.826
Massimo Tononi Chairman 130.000
Monica De Virgiliis Indipendent non-executive Director 50.000
Claudio De Conto Indipendent non-executive Director 90.000
Maria Letizia Mariani Indipendent non-executive Director 70.000
Maria Elena Capello Indipendent non-executive Director 70.000
Alberto Capponi Indipendent non-executive Director 50.000
Giovanni Tamburi Indipendent non-executive Director 70.000
Pellegrino Libroia Chairman of the Board of Statutory Auditors 75.000
Paolo Lazzati Auditor 80.920
Laura Gualtieri Auditor 50.000
Maria Luisa Mosconi Auditor 50.000
4 Managers with strategic responsibility 2.791.097