Report on corporate governance and ownership 2011 - Indesit


<strong>Report</strong> on corporate governance and ownership at 21 March 2012 on 2011 – Annex
held within the Group, capacity to influence results and the market concerned 22 . The incentive obtainable
on reaching the predefined objectives is 50% of GAR in the case of the Chairman, CEO and Other ESR and
may not exceed 75% of GAR in cases where results achieved are in excess of the planned objectives.
11. Medium/longterm
incentives:
L-TRI Plan
Since 2009, a select number of managers (including the CEO and Other ESR) have been participating in
the L-TRI Plan.
This long-term retention plan is based on the accumulation of a sum equal to the MBO paid out annually
23 and is designed to retain within the Group the skills developed by key managers over the course of the
years and at the same time to favour improvement of income and managerial results in the long term.
As no payment is provided for in the initial 3-year vesting period, the Group ensures that payment of
a relevant portion of the variable part of remuneration is deferred over an adequate time frame with
respect to maturity, in line with the characteristics of the business performed and its risk profiles.
Following approval of the consolidated financial statements for the year corresponding to the third
year of a beneficiary’s participation in the plan, a third of the amount accrued will be paid and the sum
thus disbursed is the incentive. The remaining two-thirds not paid will be written to the beneficiary’s
account and in each successive year of the plan, this sum will be increased by the amount normally
equal to what the beneficiary has actually received under the MBO Plan for that year 24 . The sum of
these amounts will form the base for calculating and paying the incentive for the next year, and so on
till the closing or revocation of the plan, when the amounts accrued and not settled will immediately
be paid to the beneficiary. Assuming achievement of the objectives set each year over the three years,
the ratio of the medium/long-term component to the entire variable part of total remuneration will be
the same as that of the short-term part 25 .
No expiry date has been set for the Plan. On approval of the financial statements for 2010, the vesting
period closed for a number of the participants (including the CEO and the Other ESR) and the first
payment was made.
12. Benefits
A number of non-cash benefits are provided to ensure total remuneration is as competitive as possible
and in line with market best practice.
The Chairman is granted professional and non-professional accident, life and health insurance policies.
Other benefits usually associated with such a position are also provided.
The CEO and Other ESR receive certain benefits in excess of those guaranteed by the CCNLD, including
professional and non-professional accident and permanent invalidity policies, a CCNLD life insurance
policy and a supplementary one in excess of such policy, and a health insurance policy. Other benefits
usually associated with such positions are also provided.
22. The MBO plan is disciplined by a regulation applying to the entire Group. Said regulation defines, among other things, the
procedures for fixing, calculating final balances and paying incentives.
23. For the CEO and a limited number of executives, such sum is twice the amount of MBO paid, as provided for in the Groupwide
regulation. Said regulation defines, among other things, the procedures for fixing, calculating final balances and paying
incentives under the L-TRI Plan.
24. Idem.
25. Calculation of the long-term incentive is also based on the amount of MBO disbursed. In the case provided for in note 2)
above, medium/long term incentives, assuming achievement of objectives, would account for 2/3 of the entire variable part
of total Gross Annual Remuneration.
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