Report on corporate governance and ownership 2011 - Indesit


<strong>Report</strong> on corporate governance and ownership at 21 March 2012 on 2011 – Annex
9. Indemnity in cases
of resignation,
dismissal without
just cause or
discontinuation
of relationship
following a public
takeover bid
In the case of the CEO, given the fundamental link between the post of director and the role he plays
in the management structure, the Board decided, when conferring this directorship for the 2010-2012
period, to adopt the RC’s proposal to enter a framework agreement under which the supplementary
indemnity due to the CEO pursuant to art. 19, clauses 15 and 16, CCNLD, also applies in the case of
resigning from his management employment relationship for a just cause as allowed by law, ie. in cases
of resignation within sixty days of the occurrence of one or more of the following conditions excluding
contingent incapacity to perform:
I) early revocation (or forfeiture not for just cause) of the office of director and/or CEO of the
Company not followed up within the subsequent 40 days of said revocation/forfeiture by conferral
of the same posts on the same conditions (remuneration, duration and range of powers);
II) significant reduction of powers and authority currently invested in the CEO to an extent that
substantially affects such office and role, ie. should he be prevented from effectively exercising the
powers and authority invested in him.
In such cases, the supplementary indemnity is fixed in an amount no less than the maximum
allowed by the CCNLD at the time of stipulating the framework contract. Said indemnity, together
with severance indemnity and any indemnity in lieu of notice (provided for in the CCNLD), shall be
calculated by summing the following: fixed remuneration, equivalent value of benefits, average of
MBO amounts received over the last three-year period, and the average of amounts received over the
last three-year period arising from participation in the L-TRI Plan (or in any shorter period in the case of
rights to payment of cash amounts maturing in under three years).
The stipulated framework contract does not provide for:
• agreements concerning assignment or maintenance of non-cash benefits after discontinuation of
the relationship with the Company;
• stipulation of consultancy contracts for the period following discontinuation of the employment relationship;
• no-competition commitments and relative consideration;
• indemnity in the case of a take-over bid.
Subject to the provisions of the RPT Procedure, agreements to terminate employment relationships
with Other ESR in advance may be decided by the CEO in concert with the Chairman.
10. Short-term
incentives:
the annual
incentive plan
(MBO Plan)
The MBO Plan generates the variable part of total gross annual remuneration and is obtained by
achieving predefined short-term business objectives. Each objective is tied to an incentive scale which
determines a bonus on the basis of the degree to which the objective is achieved. It provides for both
minimum values, below which the Company does not pay an incentive, and maximum values, over
which the Company will in any case pay only the maximum percentage agreed.
The objectives fixed by the Plan for executive directors and Other ESR are also linked to economicfinancial
indicators (for 2012, the RC chose EBIT and Free Cash Flow) and respect the criteria of specific
objectives, objective measurability and definite time scales 21 . They are set on the basis of the budget
approved by the Board for the year to which the incentive refers, as detailed in section 4.
The MBO Plan for the management regulates the payment of an amount calculated on a predefined
percentage of the remuneration accrued in the year in question. Such percentage varies with the position
21. When calculating the percentage of achievement of objectives, the Board may, if recommended by the RC, take into
account the impact of non-operating/extraordinary factors (positive and negative).
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