The plan provides for Mediobanca stock grants to employees, freelancers and agents as the equity component of their performance-based pay at the end of the annual or multiannual performance review process, provided that they have met the performance targets outlined in the remuneration policies.

We have adopted the performance share plan as a performance-based pay solution for two reasons:

  • to comply with the requirements of regulations for the payment of equity-based pay subject to performance targets deferred over a multiannual horizon, i.e., for the sustainability of positive results over time;
  • to align the interests of Mediobanca’s management with shareholders’ interests for the creation of value in the medium to long term.

The shareholders approved the current plan during the general meeting on 28 October 2015 and it was updated on 28 October 2019. The plan is compliant with the provisions of applicable regulations, particularly the Bank of Italy’s supervisory instructions of 23 October 2018 on remuneration and incentive policies and practices.

Details of the plan

  • The performance shares granted as the up-front portion of equity are subject to a holding period of at least one year before the effective allocation, and in order to be vested the beneficiary must still be with the group.
  • The performance shares granted as the deferred portion of equity are:
    • assigned within the overall vesting period for all deferred components which is at least three years long, if the beneficiary is still a group employee and has met the additional performance targets established in the remuneration policies in force at that time, which relate to the sustainability of results, maintenance of the company’s soundness and liquidity and individual good conduct;
    • subject to a subsequent holding period of at least one year before they are effectively vested, and in order to be vested the beneficiary must still be with the company.

Performance targets

The performance targets, as identified in the remuneration policies, currently require that:

  • the beneficiaries are still group employees and have neither given nor received notice of resignation or dismissal;
  • the gateways are met in each year;
  • the beneficiary’s business unit has reported a risk-adjusted profit net of non-recurring items and amounts attributable to strategic decisions, validated by Risk Management and the Internal Control and Risk Committee;
  • the beneficiary has not been committed a material compliance breach (i.e., has not been subject to disciplinary proceedings based, inter alia, on the Code of Ethics, the organizational model, the business conduct policy or Mediobanca’s other internal regulations) and losses have not been incurred as a result of the beneficiary’s work.

This creates the requirement for personnel, considering their respective roles and activities within the organization, to constantly gear their conduct towards maintaining Mediobanca’s solid capital base, high liquidity, comprehensive risk control and profitability, ensuring the long-term sustainability of remuneration systems.

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