Transparency on the governance of Italian companies is of a high level, even compared to the international scene: 95% declare their adherence to the Code of self-regulation of listed companies and adherence to the individual recommendations of the Code in many cases is close to 100%. This is what emerges from the twelfth edition of the Report on the corporate governance of listed companies in Italy published by Assonime and Emittenti Titoli Spa.
According to the report, the quantity and quality of the information provided by the companies on the composition and structure of the BoDs, voting lists, frequency and attendance at meetings and other tasks are excellent.
Increased transparency and new recommendations of the Corporate Governance Code mean that areas for possible improvement are constantly emerging. In particular, some recommendations still find partial application (appointment of the Lead Independent Director, board evaluation procedure, sometimes composition of committees, contents of the remuneration policy); some elements of attention emerge in individual cases regarding the effectiveness of the role of the committees (especially that for remuneration).
The report contains a monographic section on the remuneration of directors and statutory auditors. The study analyzes the data contained in the "Remuneration Reports" published in 2012 (pursuant to Legislative Decree no. 259/2010). The first section of the reports contains information on process governance and remuneration policy. The second section of the Reports provides information on the amounts paid to individual directors (and statutory auditors). Information of equal depth for each member of the administrative and control bodies is rarely available in other countries; this is especially true for ex post information (on remuneration actually paid).
The average remuneration of directors is equal to 233 thousand euros (+ 3% compared to the previous year). Managing directors and executive chairmen receive a remuneration (excluding equity compensation) of more than 800 thousand euros, the other executive directors equal to 434 thousand euros. This is followed by the non-executive chairmen (323 thousand euros), the vice-chairmen (238 thousand euros), the non-executive directors (79 thousand euros) and the independent directors (55 thousand euros). Non-executives and independents almost never receive equity compensation.
The Reports provide detailed information for directors (almost always executive) who are recipients of incentive plans: cash plans are more widespread than equity ones. The structure of the remuneration of managing directors varies according to company size and sector. In larger companies, the weight of the fixed component is lower (40%, against 66% in Small caps) and the weight of the variable component increases (bonuses are 45% of the total, against 12% in Small caps). The balance is given by minor items (above all fees from subsidiaries). In the financial sector, the weight of the variable component is decreasing (from 30 to 10% of the total). At the same time, an increase in fixed compensation is observed. In the non-financial sectors, by contrast, bonuses have risen from 15 to 30% of the total.
Since this is the first year of application of a complex regulation, there are some areas for improvement: for the ex ante part, it is a question of identifying in a more explicit way the orientation of the BoDs with regard to particular aspects of the policy; for that ex post, apply more precisely some objectively complex detailed provisions. The 2012 survey covers the 255 listed Italian companies as at 31 December 2011 whose corporate governance reports were available as at 31 July 2012. The reports refer to the 2011 application of the Corporate Governance Code (2006 edition, integrated with the new text of the 'article 7 regarding remuneration).
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Attachments: Corporate governance.pdf
