TIM people
Remuneration policy
The Group remuneration policy is established in such a way as to guarantee the necessary levels of competitiveness of the company on the employment market. Competitiveness translates into supporting the strategic objectives, pursuing sustainability of results in the long-term and striking a correct balance between the unitary needs of the Group and the differentiation of the various reference markets. The result is a remuneration structure that seeks to guarantee the correct balance between fixed and variable components, both short and long-term, alongside benefit and welfare systems with Total Rewarding in mind.
More specifically, the fixed component reflects the breadth and strategic nature of the position held and is dictated by performance in the reference markets.
The short term variable remuneration (MBO) on the other hand aims to establish a transparent link between pay and the degree of fulfilment of annual targets. To this end, the targets are fixed according to qualitative and quantitative indicators that represent and are consistent with the strategic priorities and business plan, measured according to pre-established and objective criteria. In 2016, the management incentives structure was simplified by reducing the number of targets.
In 2016, an MBO target was confirmed as a “gate”, which however works differently for top managers compared to the rest of the population receiving the incentive:
- for the CEO, a failure to achieve the minimum level of the gate objective will result in a 50% cut to the target bonus on which the remaining objective values are calculated;
- for the Chairman, as of 2016, the gate mechanism is the same as the one applied to the CEO;
- for all other recipients, the gate will remain a condition for access to bonuses for the company macro objectives only.
The long-term variable component aimed at achieving consistency between the interests of management and those of shareholders, by sharing in the business risk, with positive effects on the 2014-2016 stock option plan, which involved the Chief Executive Officer, the Top Management and a selection of managers1.
With a view to establishing a Total Compensation system, the conventional monetary tools have been joined by non-monetary ones including benefits, by extending some of them to everyone in the company.
When the current CEO, Flavio Cattaneo, was appointed on 30 March 2016, a decision was taken to introduce a new, additional bonus aimed at pursuing the aim of corporate discontinuity and turnaround. The Special Reward provides for the CEO and some of the executives selected by him, based on over-performance in some defined economic and financial KPIs, to accrue a bonus consisting of 80% shares and 20% cash.
| Reference stakeholders | Targets subject to incentives | % of managers (to whom the target applies) |
|---|---|---|
| Customers | - Customer satisfaction | 82% |
| - Quality of the service delivered | 41% | |
| - Quality of the service perceived by consumer and business customers | 82% | |
| - Quality of the service perceived by other national fixed and mobile telephony operators | 17% | |
| Human Resources | - Health and safety of employees | 3% |
| - Programmes of training and professional growth | ||
| - Welfare activities (People Caring) and the wellbeing of employees | ||
| Environment | - Consumption of materials, energy | 17% |
| Shareholders and Institutions | - Quality and speed of company information delivery | 6% |
| The Community | - Organisation of corporate events | 28% |
| - Quality of corporate initiatives/projects |
1 In order to provide a correct indication of the relationship between remuneration paid to Top Management and the rest of the company’s employees [G4-54], [G4-55], according to the “policy for Classifying and Managing Information in accordance with confidentiality requirements”, TIM provides some indications for calculation purposes in the customary tables of the Remuneration Report (page 18) of the Annual Financial Report (page 244).