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Remuneration

The Report on remuneration policy and remuneration paid is prepared by the Remuneration Committee and is approved by the Board of Directors.

The Report, approved by the Board of Directors on March 18, 2020, as per the recommendation of the Remuneration Committee, in accordance with applicable legal and regulatory requirements, defines and illustrates:

  •  in the first section, the Policy for the remuneration of Directors, Statutory Auditors and Managers with strategic responsibilities, for the new term  2020-2023, subject to Shareholders’ approval at the Annual Meeting  called on May 13, 2020 (binding vote),  with votes in favour equal to 95.28% of the participants;
     
  • in the second section, the remuneration paid in 2019 to Eni Directors, Statutory Auditors, Chief Executive Officer and General Manager and other Managers with strategic responsibilities, subject to Shareholders’ examination at the Annual Meeting called on May 13, 2020 (consultative vote),  with votes in favour equal to 96.23% of the participants.

The Remuneration Policy described in the first section of the Report has been prepared in line with the recommendations on remuneration of the Italian Corporate Governance Code for listed companies, which Eni adopted, as well as with recommendations by the Corporate Governance Committee.

The two sections of the Report are preceded by an Executive Summary in order to provide  a prompt  overview of the key elements of the Policy approved for the new term.

The Executive Summary also provides some additional information on the context in which remuneration choices have been made (with reference to the performance measures used to support the policies set out in the Company’s Strategic Plan, performance indicators, including sustainability objectives, the results of the vote on the Remuneration Report at last Shareholders’ Meetings).

Finally, the Report lists the shareholdings held by Directors, Statutory Auditors, Chief Executive Officer and General Manager and other Managers with strategic responsibilities and explains how the terms of the 2017-2019 Long Term Incentive Plan were applied in 2019, in accordance with applicable regulation.

The documents submitted for assembly approval on May 13, 2020 are shown below.

For further information on the contents of Eni's Report and Remuneration Policy:

Strategy, sustainable development and remuneration

Eni business model is aimed to value creation for stakeholders and shareholders, troughout achieving the Sustainable Development Goals (SDGs) of the UN's 2030 Agenda, mentioned in the Strategic Plan 2020-2023. The 2020-2023 Long-Term Equity based Incentive Plan, supports such model by providing for a specific goal on enviromental sustainability and energy transition (with an overall weight of 35%), deployted in targets related to decarbonization, energy transition and circular economy. 

Safety and environmental sustainability indicators

According to what is reported on page 10 of the Report on Remuneration Policy and remuneration paid (2020), in 2019 the Severity Incident Rate (SIR) improved over the previous year, whereas the Total Recordable Injury Rate (TRIR) was essentially unchanged at an especially low level that outperforms both than the average for Oil & Gas peers (1.16 in 2018) and the second “best in class” after Eni (i.e. Chevron, which posted a TRIR of 0.64 in 2018).

In terms of GHG emission intensity in the upstream sector, 2019 performance posted further improvements and remained in line with the target of a 43% reduction compared with 2014 levels by 2025, as previously announced. 

Our governance practices

Our governance practices regarding executive remuneration are shown below.

Pay for performance analisys

According to what is reported on page 15 of the Report on Remuneration Policy and remuneration paid (2020), the chart compares developments in Eni TSR and total CEO/GM remuneration for 2015-2019.

Eni Remuneration Policy is approved by the Board of Directors, following a proposal by the Remuneration Committee, which is entirely made up of Non-executive, independent Directors. It is defined in accordance with the corporate governance model adopted by the Company as well as with the recommendations of the Italian Corporate Governance Code.

Subject to approval by the Shareholders’ Meeting, the Remuneration Policy voted provides the Remuneration Policy Guidelines for Directors, Statutory Auditors and other Managers with strategic responsibilities for the 2020-2023 financial years, i.e. coinciding with the new term of Eni’s corporate bodies.

These Guidelines were approved by the Board of Directors on March 18, 2020 on the proposal of the Remuneration Committee, following a preliminary analysis of the relevant regulatory framework, as regards in particular new requirements resulting from the transposition of Directive (EU) No. 828/2017 (the “SRD II”), market practices in Italy and abroad as well as remuneration benchmark analysis carried out with the support of international advisors.

The aforementioned Policy Guidelines were also defined taking into due account the views expressed by the shareholders on the 2019 Policy, with an approval rate of 96.78% of the participants, thus retaining the same structure and potential maximum remuneration levels for the Chairman and CEO, as well as for non-executive Directors in relation to their participation in Board Committees. 

The summary of the 2020-2023 Policy Guidelines for the CEO and other Managers with strategic responsibilities is shown in the following table. 

Remuneration

Remuneration structure and market benchmarks

Purpose and conditions

Attract and retain individuals of high managerial standard, and motivate them to achieve sustainable long-term objectives

Criteria and parameters

Remuneration Policy for the 2020-2023 term retains the same maximum amount as in the 2017-2020 Policy (adjustable).

CEO: Eni Peer Group (Apache, BP, Chevron, ConocoPhillips, Equinor, ExxonMobil, Marathon Oil, Occidental, Shell e Total) also used for measuring the performance of the LTI Share Plan.
MSRs: Roles of the same level of managerial responsibilities in industrial corporations at national and international levels.

Remuneration

Fixed remuneration

Purpose and conditions

Reward skills, experience and responsibility

Criteria and parameters

Chief Executive Officer: Maximum fixed remuneration is set at the same level as in the 2017-2020 term, and can be reduced based on delegated powers assigned over the term, positions held and type of employment relationship, in line with professional profile and experience of the candidate.

Managers with strategic responsibilities (MSRs): Fixed remuneration is based on the role assigned potentially adjusted to median market remuneration level.

Maximum amounts

CEO:
Max. fixed remuneration: €1,600,000

Remuneration

Short-Term Incentive Plan

Purpose and conditions

Motivate managers to achieve annual budget targets in a perspective of medium/long-term sustainability

(Plans with malus/clawback mechanisms)

Criteria and parameters

2020 targets for CEO:
1) Economic and financial results: EBT (12.5%) and Free cash flow (12.5%)
2) Operating results and sustainability of economic results: hydrocarbon production (12.5%) and exploration resources (12.5%)
3) Environmental sustainability and human resources: GHG emissions intensity (12.5%) and Severity Incident Rate (12.5%)
4) Efficiency and financial strength: ROACE (12.5%) e Debt/EBIthA (12.5%)

2020 targets for MSRs:
Business and individual targets set on the basis of those assigned to the CEO/GM and the responsibilities assigned to them.

Assessment
- performance scale: 70 ÷ 150 points (target=100)
- below 70 points the performance is considered to be equal to zero
- the minimum incentive threshold is equal to overall performance of 85 points
- 1.1 multiplier applicable to overall performance score in the event of un-budgeted portfolio transactions of strategic relevance

Incentives
- Incentive base: defined as a percentage of fixed remuneration, and differs depending on the level of assigned role.
- Incentive vested: between 85% and 150% of incentive base, made up of a portion paid annually (65%) and a deferred portion (35%) determined as a function of the average of Eni annual performance results over the three-year deferral period, between 28% and 230% of the awarded deferred portion

Maximum amounts

CEO:
- Incentive base: max amount equal to 150% of fixed remuneration.
- Payable annual amount:
   - threshold 83% of fixed remuneration
   - target 98% of fixed remuneration
   - max. 146% of fixed remuneration.
- Payable deferred portion:
   - threshold 38% of fixed remuneration
   - target 68% of fixed remuneration
   - max 181% of fixed remuneration.

MSRs
- Incentive base: up to a max amount equal to 100% of fixed remuneration.
- Payable annual amount: up to a maximum amount equal to 98% of fixed remuneration.
- Payabal deferred portion: up to a maximum amount equal to 121% of fixed remuneration.

Remuneration

2020-2022 Long-Term Equity-based incentive Plan

Purpose and conditions

Encourage long-term value creation for shareholders and sustainability

(Plans with malus/clawback mechanisms)

Criteria and parameters

Number of shares awarded
Determined by the ratio between the monetary value and the price of the award, calculated as the average of the daily prices recorded in the four months before the month in which the Board approves the award.

Performance parameters over a 3-year period
1) TSR neutralized with respect to stock market performance (25%);
2) Net Present Value (NPV) of proven reserves (20%);
3) Organic Free Cash Flow (FCF) (20%)
4) Environmental Sustainability and Energy Transition (35%)
   4.1) Decarbonisation (15%)
   4.2) Energy transition (10%)
   4.3) Circular economy (10%)

Performance measurement over a 3-year period
- Relative parameter (TSR, NPV): compared with Peer Group
- Absolute parameters (FCF, Decarbonisation, Energy transition and Circular economy): measured against targets set in the Strategic Plan

Number of shares granted at the end of the vesting period
Determined as a function of performance over 3 years applying a variable multiplier between 40% (threshold) and 180% of the number of awarded shares.

Restriction period
For managers still in service, 50% of the shares granted at the end of the vesting period are to remain restricted for one year from the granting date.

Maximum amounts

CEO:
- Value of awarded shares: up to a max amount equal to 150% of total fixed remuneration.
- Value of granted shares:
   - threshold 60% of fixed remuneration
   - target 174.75% of fixed remuneration
   - max 270% of fixed remuneration.

MSRs
- Value of awarded shares: depending on the level of the role, up to 75% of fixed remuneration.
- Value of granted shares: depending on the level of the role, up to 135% of fixed remuneration.
N.B.: the monetary values are net of the impact of any changes in the stock price.

Remuneration

Non-monetary benefits

Purpose and conditions

Retain managers in the Company

Criteria and parameters

Benefits, mainly insurance and welfare related, defined in national collective bargaining agreement and in supplementary Company-level agreements (including GM and MSRs).

Maximum amounts

- Supplementary pension scheme
- Supplementary healthcare scheme
- Insurance
- Automobile for business and personal use

Remuneration

Payments due in the event of termination of office or employment

Purpose and conditions

Protect the Company from potential litigation and/or competitive risks associated with terminations without just cause

Criteria and parameters

Payments due in the event of termination of office or employment CEO
To be defined based on position and work relationship, according to the following criteria:
- administrative office (CEO) – an indemnity in the event of non-renewal of the office or early termination without just cause, as well as resignation prior to the expiry of the term justified by a reduction of delegated powers;
- executive employment relationship (including the position as GM) – an indemnity in the event of consensual termination set in accordance with the Company parameters and policy, within the limits of the protections laid down by national collective bargaining agreement for senior managers.
Indemnities are not due in the event of dismissal for «just cause» and resignation not justified by a reduction of delegated powers.

Non-compete agreement CEO
Optional agreement to protect the Company’s interests, with payment based on the extension of period and commitments undertaken.

Non-compete agreement MSRs
Only for cases of termination presenting high-competitive risks relating to the nature of the position; payment based on current remuneration levels and the extension of period and commitments undertaken.

Maximum amounts

CEO (max amounts)
- CEO: max 2 years of fixed rem.
- Possible executive work relationship (GM): max 2 years of fixed rem. And short term incentive

Possible payment for non-compete agreement CEO (max amounts):
- Fixed component: max 1 year of fixed remuneration;
- Variable component: function of average performance of the three previous years:
- 0 for below the target performance
- €500,000 for on target performance
- €1,000,000 for max performance.
the fee for the option cannot be higher than €300,000.

PDF 65.58 KB

The table below reports remuneration paid to Directors, Statutory Auditors, the Chief Executive Officer and General Manager and, in aggregate form, to other Managers with strategic responsibilities, in accordance with Consob regulations.

The table does not contain the column "Profit sharing" since there are no data to report.


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In this section, according to the provisions of current legislation, the Remuneration Reports of previous years as well as the Consob information documents relating to the share-based incentive plans.

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