Remuneration and policy objectives

Aims and Principles

The Remuneration Policy adopted by the Hera Group is an indispensable tool to support the Group’s medium and long-term strategies, conceived as a factor that contributes to improving corporate performance and creating sustainable value over time for stakeholders. The incentive capacity of the remuneration systems, in particular, is ensured in line with the Group’s strategic objectives, with particular attention to sustainable development criteria.

The Company has adopted a system of overall valorisation of its resources (total reward), based on development actions divided into four dimensions: role (job rotation, job enlargement, job enrichment, etc.), soft actions (coaching, mentorship, counselling, etc.), distinctive training (EMBA, professional masters, managerial paths, etc.) and compensation.

The Group’s remuneration policy also reflects its commitment to achieving gender equality: on the one hand, the Group constantly monitors any unjustified differences in treatment and promptly remedies them; on the other, it periodically reviews its reward system to identify any improvements aimed at ensuring the real application of gender equality in people development systems. As proof of this effective action, in 2024 Hera Spa confirmed its maintenance of the certification for Gender Equality in application of the UNI/PDR 125:2022 scheme.

Furthermore, the remuneration policy adopted is strictly connected to the achievement of ESG objectives, as set out in the Group’s sustainability report, with particular reference to the shared value Ebitda, introduced as a parameter/objective in the Group’s incentive plans: this indicator derives mainly from activities and projects that respond to the calls to action of the 2030 Global Agenda, structured on three drivers, in relation to the following specific purposes:

Lastly, the policy has been defined in such a way as to align the interests of management (understood as the Executive Directors, as well as other employees with managerial qualifications) – and, more generally, of personnel – with those of shareholders, pursuing the priority objective of creating the sustainable success of the Company in the medium-long term, by consolidating the link between remuneration and performance, both on the individual and Group level.

The remuneration policy adopted by the Group is, in particular, defined in order to guarantee the following objectives:

• increased value for shareholders;
• achieving sustainable and stable success in the short and medium-long term;
• attracting, engaging and motivating people who hold positions with strategic responsibilities for governance and business;
• promoting the corporate mission and values, including in terms of sustainability and equity, dedicating special attention to ESG issues, in line with the Hera Group’s sustainability reporting.

Governance Model

The following is a summary of the bodies and subjects involved in the preparation, approval and possible revision of the Hera Spa remuneration policy, as well as the bodies or subjects responsible for the correct implementation of this policy:

Role, composition and responsibilities of the Remuneration Committee

The Remuneration Committee is responsible for making proposals to the Board of Directors regarding the remuneration of the Chairman, Vice Chairman and Chief Executive Officer, as well as, on the basis of the indications provided by the Executive Chairman, for the adoption of general criteria for the remuneration of executives.

The Executive Directors do not take part in the decisions of the Remuneration Committee regarding the compensation awarded to them.

The Committee also periodically evaluates the adequacy, overall coherence and concrete application of the general policy adopted for the remuneration of Executive Directors.

In carrying out its functions, the Committee has the possibility of accessing the information and corporate functions necessary for the performance of its tasks, making use of an independent consultant when necessary.

This Committee, established for the first time in the meeting of the Board of Directors on 4 November 2002 and last renewed in its composition on 10 May 2023, is composed, in compliance with the provisions of the Corporate Governance Code, exclusively of independent non-executive directors (Monica Mondardini, Fabio Bacchilega and Alice Vatta), and chaired by an independent director (Tommaso Rotella), appointed by the Board of Directors on 14 May 2024 to replace Gabriele Giacobazzi, who passed away on 3 March 2024.

The Remuneration Committee met three times in 2024 and all the members of the Committee participated in all 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, as the Remuneration Committee is composed exclusively of non-executive, independent directors and at least one member with adequate knowledge and experience in financial matters or remuneration policies. At the express invitation of the Chairman of the Remuneration Committee, the Central Director of Human Resources and Organization of Hera Spa and the Director of Shared Value and Sustainability participated in the Committee’s work.
The meetings of the Compensation Committee, which were duly recorded in the minutes, lasted an average of about one hour and ten minutes.

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 in 2024, which were regularly minuted, the following issues were addressed:

• 2024 budget, BSC system – social incentive plan;
• in-depth analysis of the contractual conditions of the company’s top management with specific focus on any termination agreement (severance);
• 2023 Corporate Results Reporting:
  • short-term variable compensation results;
  • results related to the welfare plan.
• 2023 report relating to the short-term variable remuneration cards of the top management;
• 2024 Compensation Guidelines and Policies for Directors and Executives:
  • 2024 salary positioning
  • 2024 remuneration policy guidelines;
  • application of the remuneration policy to the Head of the Internal Audit function and to the Designated Officer who is responsible for drawing up the company’s accounting documents.
• benchmark positioning and remuneration of top management.

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

Page updated 5 May 2025