The Report on remuneration policy and remuneration paid is prepared by the Remuneration Committee and is approved by the Board of Directors.
The Report, as approved on March 16, 2023 by the Board of Directors, on the recommendation of the Remuneration Committee, in accordance with applicable legal and regulatory requirements, shows:
The Remuneration Policy has been prepared in line with the principles and the recommendations of the Corporate Governance Code, as well as the additional indications of the Corporate Governance Committee.
The two sections of the Report are introduced by a Summary that provides an overview of the Remuneration Policy for the 2023-2026 term and some background information.
Eni’s business model is focused on creating value for its stakeholders through a strong presence along the whole energy value chain:from exploration, development and extraction of oil and natural gas, to the generation of electricity from cogeneration and renewable sources, to traditional and biorefining and chemistry, up to the development of circular economy processes and marketing to end markets as well as retail and business customers.
Eni aims at contributing, directly or indirectly, to achieve the Sustainable Development Goals (SDGs) of the UN 2030 Agenda, supporting a just energy transition, responding through concrete and economically sustainable solutions to the challenge of combating climate change and giving access to energy resources for all in an efficient and sustainable way.
The Remuneration Policy supports the implementation of the Company’s Strategic Plan, through a consistent and balanced definition of the performance measures in the short and longterm incentive systems, by promoting the alignment of senior management’s interests with the priority of creating sustainable value for shareholders over the medium-to-long-term.
In line with the Strategic Plan, the 2023-2025 Long-Term Share-based Incentive Plan provides a specific environmental sustainability and energy transition goal (with an overall weight of 35%), made up of targets related to decarbonization, energy transition and circular economy.
According to what is reported on page 9 of the Report on the 2023-2026 Remuneration Policy and remuneration paid 2022, in 2022 the Severity Incident Rate (SIR) worsened compared to the previous year due to an increase in the severity of incidents. Eni’s Total Recordable Injury Rate (TRIR) also increased on the previous year, but still remains “best in class” among its Oil & Gas peers (the second in the ranking, TotalEnergies, reported a TRIR of 0.73 in 2021 vs. Eni’s 0.34).
In terms of GHG emission intensity in the upstream sector Scope 1 + 2 (equity) on operated and non-operated basis, in 2022, compared to 2021, there was a slight reduction in absolute emissions thanks to the gradual reduction of fugitive emissions and energy efficiency activities, while there was an increase in the emission intensity index mainly due to the lower production for maintenance activities and the optimisation of processes.
The 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 principles and the recommendations of the Italian Corporate Governance Code.
Following the approval by the Shareholders’ Meeting of May 10, 2023, the Remuneration Policy presented in the first section of the Report provides the Remuneration Policy Guidelines for Directors, Statutory Auditors and other Managers with strategic responsibilities for the 2023-2026 financial years, i.e. coinciding with the term of Eni’s corporate bodies.
The summary of the 2023-2026 Policy Guidelines for the CEO and other Managers with strategic responsibilities is shown in the following table.
Market benchmarks and fixed remuneration
REMUNERATION STRUCTURE AND MARKET BENCHMARKS | |
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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 2023-2026 term retains the same maximum amount as in the 2020-2023 Policy (adjustable). Chief Executive Officer (CEO): Eni remuneration Peer Group formed exclusively of European companies belonging to the Energy and Utilities benchmark sectors and other comparable industrial sectors (Shell, TotalEnergies, BP, Repsol, Equinor, OMV, RWE, Iberdrola, E.ON, ENGIE, Enel, BASF, Bayer, Rio Tinto, Anglo American, Volkswagen, Vodafone, Siemens). Managers with strategic responsibilities (MSRs): roles of the same level of managerial responsibilities in industrial corporations at national and international levels. |
FIXED REMUNERATION | |
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PURPOSE AND CONDITIONS | Reward skills, experience and responsibility |
CRITERIA AND PARAMETERS | Chief Executive Officer (CEO): Maximum fixed remuneration is set at the same levels in the 2020-2023 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 |
Short-term and long-term incentive plans
SHORT-TERM INCENTIVE PLAN (PLANS WITH MALUS/CLAWBACK MECHANISMS) | |
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PURPOSE AND CONDITIONS | Motivate managers to achieve annual budget targets in a perspective of medium/long-term sustainability |
CRITERIA AND PARAMETERS | 2023 targets for CEO::
Business and individual targets set on the basis of those assigned to the CEO/GM and the responsibilities assigned to them. Assessment
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MAXIMUM AMOUNTS | CEO:
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2023-2025 LONG-TERM EQUITY-BASED INCENTIVE PLAN (PLANS WITH MALUS/CLAWBACK MECHANISMS) | |
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PURPOSE AND CONDITIONS | Encourage long-term value creation for shareholders and sustainability |
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
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 awarded at the end of the vesting period are to remain restricted for 2 years from the granting date; for the CEO/GM, this would be equivalent, in the event of shares awarded annually equal to the value of the LTI granted, to a shareholding objective (achievable within 2 years) equal to 1.5 times the fixed remuneration. |
MAXIMUM AMOUNTS | CEO:
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Other treatments
NON-MONETARY BENEFITS | |
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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):
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PAYMENTS DUE IN THE EVENT OF TERMINATION OF OFFICE OR EMPLOYMENT | |
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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 the CEO office or the employment relationship as GM/MSRs: To be defined based on position and work relationship, according to the following criteria:
Non-compete agreement MSRs 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 | Indemnity CEO/GM:
Indemnity MSRs: payments defined within the limits of the protection laid down by national collective bargaining agreements((a) |
In compliance with the provisions of the Issuers Regulation, the table attached reports the remuneration accrued in 2022 by Directors, Statutory Auditors, the Chief Executive Officer and General Manager and other Chief Operating Officers, and, in aggregate form, Managers with strategic responsibilities. The remuneration received from subsidiaries and/or associates, except that waived or paid to the Company, are shown separately. All parties who filled these roles during the period are included, even if they only held office for a fraction of the year.
In particular:
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.