Remuneration and policy objectives

Aims and Principles

The remuneration policy adopted by Hera is an indispensable instrument supporting the Group’s medium- and long-term strategies, conceived as a factor that contributes to improving corporate performance and the creation of sustainable stakeholder value over time. The incentive capacity of the remuneration systems is ensured in accordance with the Group’s strategic objectives, devoting special attention to sustainable development criteria. 

The Company adopts a total reward system for its resources, based on a development action focused on four areas: role (job rotation, job enlargement, job enrichment, etc.), soft actions (coaching, mentorship, counselling, etc.), advanced training (EMPBA, professional masters, managerial courses, etc.) and compensation.
The Group’s Remuneration Policy also reflects the commitment to achieving gender equality: on the one hand, the Group constantly monitors any unjustified differences in treatment and remedies them promptly; on the other, it periodically reviews its bonus system to identify any improvements aimed at ensuring a true application of gender equality in its people development systems. In recognition of the effectiveness of its action, in 2023 Hera S.p.A. obtained Gender Equality certification pursuant to UNI/PDR 125:2022.

Furthermore, the Remuneration Policy adopted is strictly connected to the achievement of ESG objectives, as set out in the Group’s sustainability report, with a special focus on shared value Ebitda, introduced as a parameter/objective in the Group’s incentive plans: this indicator stems mainly from activities and projects that respond to the calls to action of the UN’s 2030 Agenda divided into three drivers, in relation to the following specific purposes:

Finally, the Policy has been defined in such a way as to align the interests of the Management (understood as the Executive Directors as well as other employees with managerial qualifications) - and, more generally, of the staff - with those of the shareholders, pursuing the priority objective of creating sustainable success for the Company in the medium-long term, through consolidation of the link between remuneration and performance, both on the individual and Group level.

The Group’s Remuneration Policy has been defined in order to ensure the following objectives:

• increasing shareholder value;
• achieving sustainable and stable results in the short and medium-long term;
• attracting, retaining and motivating employees who hold positions that are strategic in terms of governance and business;
• promoting the corporate mission and values, also in terms of sustainability, devoting special attention to ESG issues, in line with the Hera Group’s sustainability report.

Governance Model

The bodies and persons involved in the preparation and approval of the Hera Spa report on the Remuneration Policy, as well as the bodies or individuals responsible for the correct implementation of this policy, are summarised below:

Role, composition and responsibilities of the Remuneration Committee

The Remuneration Committee has the task of formulating proposals to the Board of Directors for the remuneration of the Chairman, Vice Chairman, and the CEO, as well as based on the suggestions put forward by the Executive Chairman, for the adoption of general remuneration criteria for managers.

The Executive Directors do not take part in the decisions of the Remuneration Committee which concern the remuneration allocated to them.

The Committee also regularly evaluates the adequateness, overall consistency and concrete application of the general policy adopted for the remuneration of Executive Directors. 

In the performance of its functions, the Remuneration Committee has access to the information and business functions required to carry out its duties, making use of an independent consultant if necessary.

This Committee, established for the first time in the meeting of the Board of Directors on 4 November 2002 and lastly renewed in its composition on 10 May 2023, is composed, in compliance with the provisions of the Corporate Governance Code, exclusively of independent directors who are not executives (Monica Mondardini, Fabio Bacchilega and Alice Vatta), and chaired by an independent director (Gabriele Giacobazzi), who left office on 3 March 2024.

The Remuneration Committee met five times in 2023: three meetings were attended by all members of the Committee, while almost all of the members attended two meetings.

It should also be noted that the Board of Directors, at the time of the last renewal of the Committee, acknowledged that Article 5, Recommendation No. 26 of the Corporate Governance Code was followed, as the Remuneration Committee is made up of only non-executive, independent directors and at least one member has adequate knowledge and experience in financial matters or remuneration policies.
At the express invitation of the Chairman of the Remuneration Committee, the Executive Chairman, the CEO, the Personnel and Organisation Central Director of Hera Spa and the Director of Shared Value and Sustainability participated in the Committee’s work.

The meetings of the Remuneration Committee, duly recorded in the minutes, were approximately one hour and 10 minutes long.

Remuneration Committee cycle of activities

The activities of the Committee are carried out according to an annual schedule that includes the following phases:

Activities carried out and planned

During the meetings held during 2023, regularly recorded in the minutes, the following subjects were discussed:

• Year-end 2023 financial statements, BSC system – social incentive plan;
• Human capital development policies – focus on genders and generations; 
• reporting of 2022 company results: 
  • objectives relating to short-term variable remuneration
  • objectives relating to the social incentive plan.
• 2022 year-end balance sheet relating to the short-term variable remuneration scoresheets of final balance for the three-year period 2020-2022 relating to the long-term incentive plan of the Executive Chairman;
• 2023 remuneration guidelines and policies for directors and managers:
  • 2023 remuneration positioning;
  • 2023 remuneration policy guidelines;
  • application of the Remuneration Policy to the Director of the Internal Auditing Department and to the Manager responsible for preparing the company’s accounting documents.
• in-depth analysis of the procedures relating to the final balance of the three-year period 2020-2022 relating to the long-term incentive plan of the Executive Chairman;
• operating methods of the Remuneration Committee;
• remuneration of Executive Directors;
• employment contract of the Hera CEO;
• compensation of the Vice Chairman and Hera directors for roles in Group companies.

In addition, the Committee reported to the Board of Directors on the work carried out.

Page updated April 2024