Eni defines its Policy on the remuneration of Directors and managers with strategic responsibilities , on the basis of a structured and transparent governance process in line with applicable regulations and statutory provisions, with a view to attracting, motivating and retaining people with a high professional and managerial standing, aligning the interests of management with the prime objective of creating sustainable value for shareholders over the medium to long term, in accordance with the guidelines defined in the Strategic Plan of the Company.
- Determines the remuneration of the Chairman and other members of the Board of Directors at the time they are appointed and for the entire duration of their mandate
- Is called to resolve, during the meeting held to approve the Annual Report, in favour or against the Remuneration Policy for Directors and Managers with strategic responsibilities described in the first section of the Remuneration Report. The resolution is not binding.
Board of Directors
- Determines the remuneration of the Directors with delegated powers and of those who participate in Board Committees, after examining the opinion from the Board of Statutory Auditors
- Approves the Remuneration Policy for Directors and for Managers with strategic responsibilities, to be submitted, every year, to the (not binding) vote of the Shareholders’ Meeting.
- Is composed of three to four Non-Executive Directors, all of whom meet the definition of independence
- Carries out consultative and advisory functions towards the Board of Directors, consistently with the recommendations of the Corporate Governance Code for listed companies
Alignement with strategy
Remuneration policies support achievement of the guidelines set in the Company’s Strategic Plan by promoting, through a balanced use of variable incentives and performance measures in the short and long-term incentive systems, 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 drivers, these parameters are focused on the integration and expansion of all businesses, the pursuit of a clear decarbonisation strategy and the development of green business, operational and financial efficiency, while meeting the highest safety standards and the adoption of strict financial discipline.
2018 Summary Indicators
Performance and Remuneration
In 2012-2018 Eni delivered a Total Shareholder Return of 14.5%, compared with 5.1 in the Peer Group(1), while the FTSE Mib index produced a TSR of 34.1% compared with an average 68.8% for the peer companies’ respective benchmark Stock market indices(2).
(1)The Peer Group consists of ExxonMobil, Chevron, BP, Royal Dutch Shell, Total, ConocoPhillips, Statoil, Apache, Marathon Oil, Anadarko.
(2) Benchmark indices: Standard Poor’s 500, Cac 40, FTSE 100, AEX, OBX.
In 2018 the Severity Incident Rate (SIR) is increased due to a number of serious incidents, whereas the Total Recordable Injury Rate (TRIR) is essentially stable at particularly low levels that are better both than the average for Oil & Gas peers (an average of 1.38 in 2017) and the second “best in class” after Eni (i.e. Chevron, which posted a TRIR of 0.65 in 2017).
In terms of GHG emission intensity in the upstream sector (where figures have been remeasured since 2014 following the addition of new emission sources), 2018 performance, as shown in chart 3, posted further improvements and remained in line with the target of a 43% reduction by 2025 compared with 2014 levels, as previously announced.
CEO/GM Remuneration for the 2017-2020 term
Total remuneration for Eni’s Chief Executive Officer and General Manager for the 2017-2020 term was set taking account of the termination of the restrictions on reducing remuneration applied for the 2014-2017 term (-25% on the maximum potential financial benefit) and working to balance the pay mix with a greater focus on long-term variable components (53% vs. 46%).
The chart shows the value of the remuneration package for Eni’s Chief Executive Officer and General Manager for the 2017-2020 term compared with the two previous terms. The total target remuneration for the 2017-2020 term was also verified against the total target remuneration of the Peer Group for the period 2015-2017, reduced by 37% (€7,774 thousand) in order to take account of the difference in capitalisation compared with Eni.
The table reports the composition of the Peer Group, including Eni’s leading Oil & Gas competitors operating mainly in the upstream sector, given the greater weight of that sector in Eni’s operations, and the size characteristics, which show an average capitalisation that is about 37% greater than Eni’s.
The chart compares developments in Eni TSR and total CEO/GM remuneration for 2012-2018.
Results of shareholders’ vote on Eni Remuneration Policy
The Shareholders’ Meeting of May 10, 2018, in accordance with the provisions of the applicable legislation (Art. 123-ter, paragraph 6, of Legislative Decree No. 58/98), issued an advisory vote on the first section of the 2018 Remuneration Report.The overall percentage of participants voting in favour in 2018 was 80.46% while the subset of institutional investors voting in favour came to 64.23%, with an average of approval rate, in the last five years of about 90%.