Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

REPORT ON STAFF REMUNERATION POLICIESDear Shareholders,We have called you together in general meeting:A) to report on the remuneration policies adopted for the twelve months ended30 June 2011, andB) to submit Mediobanca’s new remuneration policies, approved by the Board ofDirectors on 21 September 2011 in compliance with the regulations in force,to your approval.During the year under review, the Remunerations Committee and Board ofDirectors of Mediobanca exercised the power granted by yourselves in generalmeeting on 28 October 2010 to bring the Bank’s remuneration system in line withthe new regulatory requirements, which are:– the Bank of Italy guidance sent to Mediobanca in a letter dated 18 October 2010,of which the Board and shareholders in general meeting were informed on 28October 2010, regarding the need to alter the remuneration schemes through: i)use of performance metrics to take into account inter alia risks that cannot bemeasured and liquidity risks; ii) increase in the deferred part of the variableremuneration component; iii) deferral of no less than three years; iv) introductionof retention mechanisms in the award of financial instruments– the “Instructions on remuneration and incentivization policies and practicesin banks and banking groups” issued by Bank of Italy on 30 March 2011 (the“Instructions”) enacting the European framework regulations, whichconstitute the new regulatory benchmark, incorporating internationallyagreed principles and standards, which form part of the set of measuresintended to guarantee the stability of the banking and financial system andensure that it functions smoothly.These new items led to the remuneration policies already approved beingadapted in order for them to be approved before 30 June 2011 and new staffremuneration policies being drawn up to be submitted to your approval. In thisactivity Mediobanca has been assisted by leading international consultants.– 487