{"id":119,"date":"2013-09-24T10:14:09","date_gmt":"2013-09-24T10:14:09","guid":{"rendered":"http:\/\/frontisgovernanceblog.wordpress.com\/?p=119"},"modified":"2013-09-24T10:14:09","modified_gmt":"2013-09-24T10:14:09","slug":"frontis-governance-published-the-2013-study-on-remuneration-in-italian-listed-companies-pay-on-performance","status":"publish","type":"post","link":"https:\/\/frontisgovernance.com\/en\/frontis-governance-published-the-2013-study-on-remuneration-in-italian-listed-companies-pay-on-performance\/","title":{"rendered":"Frontis Governance published the 2013 study on remuneration in Italian listed companies: Pay on Performance?"},"content":{"rendered":"

Over the past few years, partly due to the financial crisis, executive remuneration at listed companies has become a critical issue in the dialogue between issuers and shareholders, who have often contested the gap between top managers\u2019 compensation and the value created. The Frontispiece<\/span> Governance<\/span><\/strong>\u2019the report analyses All remuneration components in the most minute detail<\/b> of the CEOs and Board members of 98 Italian listed companies. The purpose of the study is not to define whether overall compensation is too high, but, as the title states, to evaluate its actual alignment to the company\u2019s goals: are remunerations effectively structured to pay for performance?<\/p>\n

Since the first year of implementation, the shareholders\u2019 vote on remuneration reports has shown its full strength: in 2012, the level of dissent was so high as to define that proxy season as \u201cthe shareholders\u2019 spring\u201d. Nonetheless, one of the main and clearest effects of the introduction of say-on-pay in Italy is a Greater transparency<\/b> on executives\u2019 remuneration structure. The analysis of 2012 remunerations is therefore highly relevant for at least two reasons: for the first time it is possible to observe the changes of each component over time, also allowing an initial evaluation of the closer dialogue between issuers and minority shareholders.<\/p>\n

Methodology and contents<\/b><\/p>\n

The Frontispiece\u00a0<\/span>Governance<\/span><\/strong>\u2019s study, Pay for Performance? Analysis of 2012 Remuneration in Italian Listed Companies<\/span><\/a><\/span>, scrutinises the compensation structure of 98 largest Italian issuers<\/b>. All remuneration components are analysed by their nature<\/b> (cash, shares or stock options) and relevant Vesting period<\/b> (base salary, annual bonus and long-term incentives), in order to compare each amount through appropriate parameters: company's size, operating results and stock market performances, achieved the previous year and in the long term.<\/p>\n

The second part of the study focuses on the remuneration vested in 38 FTSE MIB index components, widening the analysis to the entire Board of Directors<\/b>the CEOs, the Chairpersons and all other members, differentiating the executives from the non-executive ones.<\/p>\n

Finally, thanks to the partnership with the international network of proxy advisors ECGS<\/a> (\u201cExpert Corporate Governance Service\u201d), it has been possible to compare the remuneration structure at Italian large-caps with a sample of European peers<\/b>, operating in the same sectors represented in the FTSE MIB index.<\/p>\n

Highlights<\/b><\/p>\n

Remuneration of Italian CEOs increased by 27.5%<\/b> in 2012 (+31.3% across 38 FTSE MIB companies), but the in-depth analysis led to much more nuanced conclusions, which in some way answered the initial question:<\/p>\n