Report on remuneration policy and remuneration
Pursuant to article 123-ter of the TUF and art. 84-quater Consob Issuers‘ Regulation
Approved by the Board of Directors on March 10, 2022
Introduction: reference regulatory framework
This report on the compensation policy and compensation (the “Report“) is divided into two sections:
– Section I: Remuneration policy for the year 2022 (“Policy 2022“) and
– Section II: Statement of remuneration for 2021 (the “Declaration 2021“).
This report is prepared in accordance with art. 123-ter of the Consolidated Financial Law (as amended by Legislative Decree No. 49 of 2019 implementing in Italian legislation the so-called shareholders‘ Rights Directive II – EU Directive 828/2017) and art. 84-quater of the Consob Issuers Regulation (as amended by Consob Resolution No. 21623 of December 10, 2020) giving rise to systematic regulations governing transparency in relations with the market and with all shareholders.
It also takes into account the provisions of the January 2020 edition of the Corporate Governance Code, to which Gefran SpA (“Gefran“ Where “the company“) adhered to a resolution adopted by the Board of Directors on December 16, 2020.
Furthermore, the Report was adopted in accordance with Article 13, paragraph 3, letter b) of the Consob
Regulation 17221/2010 and article 13 of the Regulation governing transactions with related parties, approved by the Company‘s Board meeting of August 3, 2017.
In the interests of shareholders, the Company considers it appropriate to briefly summarize the regulatory measures taken since 2019 which have affected the content and methods of approval of the Report.
Legislative Decree no. 49 of 2019 (the “Decree“), implementing Shareholding‘ Directive II amended the consolidated finance law, among other things, in the provisions applicable to the remuneration report, while maintaining the Consob‘s power to indicate the information to be included in the first part of the remuneration policy. In this regard, on October 31, 2019, Consob began a consultation process for the modification of the Issuers‘ Regulations to implement the regulations contained in the Shareholders’ Charter‘ Shareholder Rights Directive II‘ rights, modifying the finance law consolidated by the decree. The consultative process therefore ended with Consob resolution no. 21623 of December 10, 2020 (the “Consob Resolution“) , with which the
The company complied.
The Consob Resolution therefore intervened by making changes:
➢ in article 84-quater of the Consob Emitters‘ Regulation
➢ in section I of schedule 7-bis of appendix 3A of the issuer regulations
➢ in section II of schedule 7-bis of appendix 3A of the issuer regulations
This 2022 Policy is consistent with the content of the 2021 Policy, but the objective is to implement its content as part of a continuous improvement process aimed at strengthening the relationship with shareholders. For the attention of shareholders, attention is drawn to section I, point 2. C containing details on the remuneration of directors performing specific functions, detailing the elements approved by the Board of Directors on April 28, 2020 in application of the 2020 Policy approved by the Shareholders‘ Meeting held the same day.
Remuneration policy for 2022
1. General principles
The Remuneration Policy defines all the principles and guidelines used to determine the remuneration of directors, directors responsible for special assignments, general managers and executives with strategic responsibilities.
This policy governs the remuneration system for employees of the Gefran Group, both within the Parent Company Gefran SpA and its Italian and foreign subsidiaries, and is based on the values, principles and key points that have guided the Gefran Group since its origin, and continue to guide it, through Gefran Road with a goal of constant growth: integrity, balance, meritocracy, commitment and value creation. The objective is to create and apply a body of effective, efficient and functional remuneration procedures, proportionate to the needs of its various entities.
With this in mind, also in light of the recommendations of the January 2020 edition of the Corporate Governance Code, promoted bythe corporate governance committee,the remuneration policy has been prepared to concretely determine the remuneration or compensation system in order to align the interests of the management with those of the shareholders, pursuing the objective of promoting Gefran‘s sustainable success in the medium and long term, in accordance with the principles of (i) meritocracy and internal equity, in terms of consistency between remuneration and responsibility, skills, ability and position held; (ii) competitiveness, in terms of compensation balanced with reference markets.
The primary function of the Gefran Group‘The Group’s remuneration system is to hire, encourage and reward people who, in various ways, place their experience and expertise at the service of the Gefran Group, participating in its development, while maintaining good alignment between incentives and the risk profile of the activity in question. In this sense, the remuneration policies aim to avoid any form of incentive encouraging company personnel to take totally disproportionate risks in contradiction with a sound, prudent and sustainable growth management logic in order to seek individual profit at short term.
The remuneration system thus adopted therefore represents one of the essential tools for attracting, motivating and retaining competent people who can contribute to the Group.‘s performance, while maintaining Gefran‘strategy, the Goal, To promise and guiding principles in view of the fact that the company‘The size of s and the size of the salary package are closely related.
With this in mind, the remuneration policy put in place takes into account the Company‘s best practices, internal balance and sustainability, rather than those of other companies or external benchmarks, which are nevertheless assessed and taken into consideration. The setup adopted in 3
this way is therefore also consistent with a “principle of proportionality“ that entities must take due account of the nature, characteristics, size, riskiness and complexity of the activities carried out by themselves or by the groups to which they belong when developing their organizational structure ( and their compensation and incentive policies and practices).
The guidelines are adopted by Gefran when new managers join the company and when preparing and implementing career development paths for existing Group employees.
It should be noted that in 2020, Gefran adopted its strategic plan for sustainable development1then updated in November 2021, which sets the guidelines for reaching the Group‘s lasting success. As detailed below, the objectives of the Strategic Sustainable Development Plan contribute to the variable compensation of the Chief Executive Officer and executives with Strategic Responsibilities.
In doing so, in accordance with the guidelines put in place last year, the Company wanted to identify a certain number of environmental, social and governance (ESG) parameters and include these objectives among its qualitative objectives.
1.B – Gefran recipients Spa’s the compensation and incentive policy
Pursuant to Section 123ter of the TUF, in its report on compensation, the Company is required to explain the compensation policy applied to members of the Board of Directors, executive corporate officers, executives with strategic responsibilities and members of the Board of Statutory Auditors , as approved by the Board of Directors, as well as the Report on the remuneration paid.
With the support of the Remuneration Committee, the following mandates and functions have been identified as recipients of the 2022 Policy:
1Gefran’s sustainable development strategic plan can be downloaded at the following address link 4
Leaders with strategic responsibilities
– Patrizia Belotti (Personnel and Organization Director)
– Paolo Butti (Chief Sales Officer and General Manager, Sensors Business Unit) – from June 2021
– Fausta Coffano (Financial Director)
– Christian Pamballona (General Manager, Drive & Motion Control Business Unit)
– Marco Svara (Chief Technology Officer)
Members of the College of Statutory Auditors
– President and other permanent auditors
1 C – The process of determining and implementing the Policy and the parties involved
The decision-making process for determining, reviewing, approving and implementing the Company’s remuneration policies falls under the responsibility of different bodies and functions and requires the involvement and support of a number of different parties. , also depending on the intended recipients.
No independent expert participated in the development of the 2022 Policy, both the statistical and qualitative surveys available on the market were taken into consideration, and, in accordance with the provisions of the Issuers‘ Regulations, votes cast by shareholders at previous shareholders‘ meeting were also reviewed. This has been adapted as part of a continuous improvement process aimed at strengthening dialogue with Investors, who are aware of the importance of compensation and incentive systems in the overall framework of governance.
Shareholders‘ The Meeting is responsible for:
– set the remuneration of the organizations it designates;
– vote for or against the Policy, with a binding resolution;
– vote, by a non-binding resolution, for or against the approval of the report on the remuneration paid by the Company, in accordance with art. 3 of Legislative Decree 49/2019;
– approve compensation plans based on financial instruments in accordance with art. 114-bis of the TUF.
board of directors
The Board of Directors prepares, submits to the Shareholders‘ Meets and reviews the remuneration policy at least once a year. He is also responsible for its proper implementation. This body defines in particular the remuneration systems applicable to the Company‘s the administrative bodies, with the support of the Committee and after consulting the College of Statutory Auditors.