{"id":545,"date":"2012-05-24T10:41:26","date_gmt":"2012-05-24T10:41:26","guid":{"rendered":"http:\/\/frontisgovernanceblog.wordpress.com\/?p=38"},"modified":"2012-05-24T10:41:26","modified_gmt":"2012-05-24T10:41:26","slug":"frontis-governances-analysis-of-directors-remuneration-ftse-mib-2011","status":"publish","type":"post","link":"https:\/\/frontisgovernance.com\/en\/frontis-governances-analysis-of-directors-remuneration-ftse-mib-2011\/","title":{"rendered":"Frontis Governance\u2019s analysis of Directors remuneration \u2013 FTSE MIB 2011"},"content":{"rendered":"<p>Frontis Governance publishes its first report on Directors\u2019 remuneration at main Italian companies, highlighting a real gap between the executives\u2019 and the long-term shareholders\u2019 interests:<\/p>\n<ul>\n<li>Despite the average <strong>Total Shareholder Return<\/strong> (made of market value and dividends) was equal to <strong>-19%<\/strong> at FTSE MIB companies, the average remuneration of the CEO <strong>increased of more than 14% in 2011<\/strong>.<\/li>\n<li><strong>The base salaries decreased of 11%<\/strong>: only 5% less at banks, where the fixed remuneration is still higher than other sectors (\u20ac1.69 million at the financial sector versus \u20ac1.32 million at other companies).<\/li>\n<li><strong>The variable component<\/strong>, that is linked to performances and should aim at aligning CEO\u2019s and shareholder\u2019s interests, <strong>increased of 45%<\/strong> in 2011, +92% the\u00a0cash bonuses.<\/li>\n<li><strong>The average CEO\u2019s pay-mix <\/strong>is made of: 42.7% fixed, 38.7% cash bonuses and 18.6% equity-based incentives: the compensation structure is strongly<strong> focused on the short-term period.<\/strong><\/li>\n<li>Most of remuneration policies still provide for <strong>egregious severance payments<\/strong>, considerably more than the equivalent of 2\u00a0 years\u2019 base salary, as recommended by the EU on April 2009: in many cases, indemnities still represent real <strong>golden parachutes<\/strong>, such as the \u20ac16.65 million paid to the former Chairman of Generali Cesare Geronzi and the \u20ac9.48 million to the former CEO and Chairman of Finmeccanica Pierfrancesco Guarguaglini.<\/li>\n<\/ul>\n<p>Only 5 policies provide for stock options as the only equity-based incentive. Most of the plans provide just for cash (29%) or free shares (39%). It is significant that many issuers (among which the State-owned companies) did not renew the stock option plans after the year 2008.<\/p>\n<p>The analysis highlights distortions also with regards to the <strong>Non-Executives\u2019 remuneration<\/strong>: in 7 cases out of 38, non-executive Directors, some of which are considered as independent by the company, received higher compensation than their executive colleagues.<\/p>\n<p>Mainly due to the strong focus on the short-term period and the egregious severance payments, Frontis Governance and ECGS <strong>opposed at more than 83%<\/strong> of Italian remuneration reports. Such percentage is slightly lower than the European one: the ECGS partners opposed at approximately 88% of European (non Italian) executives remunerations.<\/p>\n<p><a title=\"Directors' Remuneration - ITALY 2011\" href=\"https:\/\/frontisgovernance.com\/en\/attachments\/article\/249\/Directors%20Remuneration%20-%20ITALY%202011.pdf\/\" target=\"_blank\">Download here the full report<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Frontis Governance publishes its first report on Directors\u2019 remuneration at main Italian companies, highlighting a real gap between the executives\u2019 and the long-term shareholders\u2019 interests: Despite the average Total Shareholder Return (made of market value and dividends) was equal to -19% at FTSE MIB companies, the average remuneration of the CEO increased of more than [&hellip;]<\/p>","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[111,120],"tags":[12,29,30,31],"class_list":["post-545","post","type-post","status-publish","format-standard","hentry","category-english-news","category-remuneration","tag-ecgs","tag-finmeccanica","tag-generali","tag-stock-options"],"acpt":null,"_links":{"self":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/comments?post=545"}],"version-history":[{"count":0,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/545\/revisions"}],"wp:attachment":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/media?parent=545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/categories?post=545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/tags?post=545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}