Gabriele Galateri di Genola
It is my pleasure to present Saipem’s 2014 Remuneration Report, which will be submitted at the Shareholders’ Meeting. The Report is the result of an intensive effort by the Compensation and Nomination Committee over the course of 2013 to align policies and guidelines for the remuneration of Directors and strategic resources with recent legislative developments and to ensure that they reflect the growing awareness of and interest in the issue being shown by investors.
Over the course of the year, the Committee adopted a proactive approach, implementing initiatives and decisions consistent with the results posted by Saipem in 2013, including the definition of prudent remuneration policies, the recalibration of remuneration policies and incentives, as well as actions designed to effectively motivate and retain critical managerial resources. As part of our scope as a Nominations Committee, we also carefully evaluated the criteria used for the designation of Directors, who are appointed by the Board of Directors.
The results of the vote on the first section of the 2013 Remuneration Report, which were subjected to thorough analysis by the Committee in July, confirmed that the policies established met with a significant level of positive appreciation.
The last meeting of 2013 as well as the first meeting of 2014 focused on Article 84-ter of Law No. 98 of August 9, 2013 concerning the remuneration of Executive Directors of companies controlled directly or indirectly by Public Authorities and in particular the situation regulated by paragraph 5-sexies of the same article.
The 2014 Remuneration Policy guidelines contain a number of changes compared with the previous year. Among these, I would like to draw your attention to the changes made to the Long-Term Monetary Incentive Plan for critical managerial resources, which the CEO due to be appointed by the next Board of Directors will also participate in. In line with international best practices as well as the recommendations of the principal proxy advisors, the performance parameter Total Shareholder Return (TSR) has been introduced to replace adjusted net profit + D&A, with the aim of ensuring that the incentives offered to management are aligned with the objective of creating shareholder value.
During 2013, the Committee also developed a number of proposals for changes to the management incentive system, the results of which will be made available to the new Committee due to be installed following the Shareholders’ Meeting.
This Report is proof of our constant commitment to ensuring proper representation to our shareholders and to the market of the Remuneration Guidelines applied by Saipem, to ensuring that remuneration is linked to actual results and finally to ensuring openness and transparency for investors.
I would also like to take this opportunity to thank the Directors Nicola Greco and Maurizio Montagnese, and the Chairman of the Board of Statutory Auditors, Mario Busso, for their precious contribution to the work of the Committee and to express my best wishes for the future to the new members of the Committee.
Finally, let me thank you in advance for taking the time to read this Report and for the support I hope you will give to the policies for the year it contains.
March 14, 2014
The Chairman of the Compensation and Nomination Committee