Frontis Governance has published its first study on the remuneration of leading Italian listed companies.<\/p>\n
The main findings of the analysis highlight that there is still a clear discrepancy between what is paid to senior executives and the long-term interests of shareholders:<\/p>\n
Only in 5 cases is the equity incentive exclusively represented by Share options<\/em>, which could also represent the most valid tool for aligning interests in the long term: if the market value of shares grows, the beneficiary receives the bonus, otherwise the latter is zero. It is significant how many issuers (including companies controlled by the Government) have abandoned Share options <\/em>after 2008.<\/p>\n The strong imbalance in favour of short-term goals in incentive plans and excessive pay-outs have led Frontis Governance to issue negative ratings on approximately 83%<\/strong> of the Remuneration Reports analysed. The situation in Italy is, however, no different from the rest of Europe, where the ECGS network has \u201crejected\u201d over 88% of shareholders\u2019 meeting resolutions relating to the remuneration of executive directors.<\/p>\n However, the analysis highlights that distortions in remuneration plans don't just affect Chief Executive Officers: in 7 out of the 38 companies analysed, non-executive directors, including some defined as independent, received higher compensation compared to Executives<\/strong> of the same companies.<\/p>\n