Allowances in the event of resignation, dismissal or termination

Pirelli Group policy prohibits making agreements with Directors, General Managers, Key Managers, Senior Managers and Executives that regulate ex ante the economic issues arising in the case of early termination of their relationship by the Company or the individual employee (i.e. “golden parachutes”).

Agreements made when an existing relationship with the Group is terminated without cause are not considered golden parachutes. In these cases, Pirelli prefers to seek agreements for consensual termination of the relationship. Without prejudice to statutory and/or contractual obligations, agreements made for termination of an employment relationship with the Group are based on applicable benchmarks and within the limits defined by case law and custom in the country where the agreement is made.

The Company defines internally the criteria which the other companies of the Group must also follow for management of the agreements on the early termination of relationships with managers and/or Directors holding special offices.

Pirelli does not envisage the payment of allowances or extraordinary compensation for termination of Directors holding special offices, who are assigned specific functions, and who do not have a managerial work relationship with the Group. Payment of a specific allowance may be granted, subject to prior review by the delegated corporate bodies, in the following cases:

  • termination by the Company without cause;
  • termination by the Director with cause: for example, in the case of substantial changes in his role or assigned duties, and/or in the event of a hostile tender offer.

In these cases, the allowance amounts to three times the employee’s gross annual compensation, with this meaning the sum of all gross annual fixed salaries for the offices held, the average annual MBO paid while in office, and retirement bonuses (TFM) on these amounts.