NOTE E STUDI E APPROFONDIMENTI

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  • 07/03/2014

    Assonime and Emittenti Titoli S.p.A. publish the results of the 13th Report on the Corporate Governance in Italy (previous editions are available on the Assonime website, in the Corporate Governance area) .

    Italian listed companies reach a very high transparency level in providing information on their corporate governance, even when compared to the international landscape.

    93% of companies stated formally their intention to comply overall with the CG Code. Compliance with single Code recommendations is close to 100%: the quality of disclosure is generally good, both in the case of compliance and in the case of non-compliance with Code provisions: consequently these non-compliance cases are clearly disclosed to investors. Quantity and quality of disclosure about the composition/structure of the board, positions held in other companies as well as frequency of/attendance to board meetings are very good.

    The improvement of transparency and, at the same time, new CG Code’s recommendations ensure the existence of some areas of further improvement. In particular, some recommendations have yet to be fully implemented (e.g. appointment of a Lead Independent Director, board evaluation procedure, sometimes the composition of board committees, some topics of the remuneration policy); moreover, some issues concern the effectiveness of board committees (especially of the Remuneration Committee). However, even in these areas significant improvements should be noted: the composition of board committees is often already aligned with new Code’s recommendations; the transparency on the pre-meeting information, on the existence of succession plans and on the process of board evaluation is significantly increasing.

    CG Reports often provide information on directors’ age and time in office. Directors’ average age is about 59 years, but it varies significantly according to company sector (58 in the non-financial sector; 63 for bank directors). Executive directors are generally younger (57 years). The average time in office is slightly less than 6 years; it is much higher (almost 9 years) for executive directors than for non-executive ones (less than 5 years) and, even more, for independent directors (about 3.5 years).

    The monographic part of the Report analyses – as in the previous year – the remuneration of directors, statutory auditors and general managers.

    In particular, we analysed the Remuneration Reports, which have been approved and published by Italian listed companies in 2013. Remuneration Reports are divided into two sections: the first one describes the company remuneration policy as well as the procedures used for the adoption and the implementation of this policy; the second one provides information, on an individual basis, about the remuneration of directors (and statutory auditors). Such kind of transparency is very rare to find in other EU Member States; this is particularly true for the so-called ex post information (i.e. the effectively paid compensation).

    The average directors’ global “non-equity” remuneration (i.e. without considering the equity based remuneration) is about 225,000 € (3% less than in the previous year). Managing Directors receive a “non-equity” compensation of 770,000 € on average. Executive chairmen get a 20% lower compensation (i.e. 627,000 €); other executive directors receive more or less the 60% of the MDs’ remuneration (448,000 €). They are followed by non-executive chairmen (302,000 €). Non-executive directors (73,000 €) and independent directors (55,000 €) receive the lowest compensation. Independent directors do not receive any equity linked remuneration. Remuneration reports provide detailed information about directors who are beneficiaries of incentive plans: cash plans are more frequent than equity ones. The structure of managing directors’ remuneration varies according to company size and sector. In larger companies the fixed remuneration is lower (47%, vs. 72% in Small Cap), while the variable one is higher (bonuses account for 35% of the aggregate, vs. 9% in Small Cap). In the financial sector, the variable part is constantly decreasing in the last few years, both in terms of amount (60,000 €, down from 316,000 € in 2011 and 184,000 € in 2012) and percentage of the global remuneration (5% of the aggregate, down from 16%). But, on the other side, there is an increase in the fixed remuneration. Moreover, in the non-financial industry, bonuses are higher both as average amount (slightly below 200,000 €) and as percentage of total remuneration (i.e. 27% of the aggregate; 29% in 2012 and 21% in 2011). MDs’ cash compensation is slightly decreasing (about 7% lower), after three years of growth; the most evident decrease has been registered in the financial sector (27% of the aggregate).

    The 2013 analysis covers 239 Italian companies, listed on the Italian Stock Exchange on 31st December 2012, whose Reports were available as of 15th July 2013: the survey covers substantially the whole stock exchange list.

    For further information about Emittenti Titoli, click here.

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