{"id":556,"date":"2014-01-14T12:49:05","date_gmt":"2014-01-14T12:49:05","guid":{"rendered":"http:\/\/frontisgovernanceblog.wordpress.com\/?p=139"},"modified":"2014-01-14T12:49:05","modified_gmt":"2014-01-14T12:49:05","slug":"the-bank-of-italy-contested-the-severance-paid-to-the-former-ceo-of-unicredit-in-2012-ecgs-asked-the-company-to-reclaim-the-extra-payment","status":"publish","type":"post","link":"https:\/\/frontisgovernance.com\/en\/the-bank-of-italy-contested-the-severance-paid-to-the-former-ceo-of-unicredit-in-2012-ecgs-asked-the-company-to-reclaim-the-extra-payment\/","title":{"rendered":"The Bank of Italy contested the severance paid to the former CEO of UniCredit \u2013 in 2012 ECGS asked the company to reclaim the extra-payment"},"content":{"rendered":"

It is never too late to gain legitimacy and ECGS is glad to see that efforts made for a better governance at the top of Italian companies are not made in vain.<\/p>\n

On January 11th<\/sup>, the Italian newspaper il Fatto Quotidiano published the report<\/a> drafted on April 2013 by an independent advisor, Prof. Stefano Loconte, hired by the Rome prosecutor\u2019s office to verify the legality of the indemnity leave paid to the former UniCredit\u2019s CEO, Mr. Alessandro Profumo. The document confirms all concerns formulated by Frontis Governance and ECGS two years ago.<\/p>\n

On January 27th<\/sup>, 2012, ECGS and Frontis Governance formally asked the UniCredit\u2019s Board of Directors<\/a> to make every effort to recall the excess money paid to the former CEO. On September 2010, Mr. Profumo received 40.5 million Euros, of which 36.5 million Euros as severance payments. Such egregious amount was not justified by the results achieved by the bank, and it failed to comply with the 2009 European Commission\u2019s Recommendations (that limited the termination payments to the equivalent of two years\u2019 non-variable compensation). Moreover, Mr. Profumo\u2019s severance contradicted the UniCredit\u2019s 2010 remuneration policy, that provided for an indemnity leave equal to 3 years of total compensation. According to Frontis Governance and ECGS\u2019 appraisal, the extra-payment amounted to approximately 27 million Euros. The UniCredit\u2019s answer, received on February 16th<\/sup>, 2012, just reported the Chairman\u2019s speech at the last AGM, generically justifying the legal validity\u00a0 of the severance paid.<\/p>\n

Two years later, it appears not only that the ECGS\u2019 initiative was clearly justified, but that the Bank of Italy even anticipated the proxy advisers. Prof. Loconte\u2019s document quotes formal requests sent by the Italian banking Authority on December 2010, contesting the UniCredit\u2019s severance clause: as stated by ECGS, the equivalent of three years\u2019 global compensation was not in line with the EU Recommendations. Furthermore, the Bank of Italy contested the inclusion of all potential incentives in the severance payment and that no deferral clauses were provided. Following the generic answer provided by UniCredit, very similar to the one sent to Frontis Governance and ECGS, the Bank of Italy just asked for more information and confirmed all the remarks.<\/p>\n

The letter sent by Frontis Governance and ECGS did not question the legal validity of Mr. Profumo\u2019s severance payment, that was confirmed also by the Prof. Loconte\u2019s document, but it requested UniCredit to undertake a strong action, aimed at regaining its shareholders\u2019 trust. If the company does not comply with its own policies, without providing an adequate justification, how can shareholders trust the future remuneration policies, to be voted at general meetings?<\/p>","protected":false},"excerpt":{"rendered":"

It is never too late to gain legitimacy and ECGS is glad to see that efforts made for a better governance at the top of Italian companies are not made in vain. On January 11th, the Italian newspaper il Fatto Quotidiano published the report drafted on April 2013 by an independent advisor, Prof. Stefano Loconte, […]<\/p>","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123,111,14,120],"tags":[128,12,20],"class_list":["post-556","post","type-post","status-publish","format-standard","hentry","category-engagement-activism","category-english-news","category-news","category-remuneration","tag-bank-of-italy","tag-ecgs","tag-unicredit"],"acpt":null,"_links":{"self":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/556","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=556"}],"version-history":[{"count":0,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/556\/revisions"}],"wp:attachment":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/media?parent=556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/categories?post=556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/tags?post=556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}