Remuneration of Directors of Pirelli & C.

The Board of Directors is composed of:

  1. Directors holding special offices who may also be assigned specific functions;
  2. Non Executive Directors.

(ii) Non Executive Directors. The delegation of authority to Directors only in urgent situations is insufficient to qualify them as Directors assigned specific functions.

At December 31, 2011:

  • the Directors holding special offices were the Chairman of the Board of Directors and Chief Executive Officer Marco Tronchetti Provera and the Deputy Chairmen Vittorio Malacalza and Alberto Pirelli; the Chairman was also assigned specific functions (for more details, please refer to the Report on Corporate Governance and the Structure of Share Owners);
  • the Non Executive Directors were: Carlo Acutis; Anna Maria Artoni; Gilberto Benetton; Alberto Bombassei; Franco Bruni; Luigi Campiglio; Pietro Guindani; Paolo Ferro-Luzzi; Giulia Maria Ligresti; Elisabetta Magistretti; Massimo Moratti; Renato Pagliaro; Giovanni Perissinotto; Luigi Roth; Carlo Secchi.

In 2011 the following Directors left office: (i) on April 21, 2011 (upon renewal of the Board of Directors after its term had expired): Prof. Carlo Angelici; Prof. Cristiano Antonelli; Mr Umberto Paolucci and Mr Giampiero Pesenti; on November 16, 2011: Prof. Francesco Profumo; (iii) on December 16, 2011: Mr Enrico Tommaso Cucchiani.

The April 21, 2011 Pirelli Shareholders’ Meeting that appointed the Board of Directors also approved compensation pursuant to Article 2389(1) Italian Civil Code in an aggregate amount for remuneration of the Directors, while delegating the Board of Directors the task of allocating it.

In particular, the Shareholders’ Meeting approved aggregate gross annual compensation of euro 1.7 million, which was subsequently allocated by the Board of Directors as follows:

  • to each Director: euro 50 thousand gross annual compensation;
  • the Chairman of the Internal Control, Risks and Corporate Governance Committee: euro 40 thousand gross annual compensation;
  • to the other members of the Internal Control, Risks and Corporate Governance Committee: euro 30 thousand gross annual compensation;
  • to the Chairman of the Remuneration Committee: euro 25 thousand gross annual compensation;
  • to the other members of the Remuneration Committee: euro 20 thousand gross annual compensation;
  • to the members of the Strategies Committee: euro 25 thousand gross annual compensation, except for the Chairman and Chief Executive Officer, the General Manager and the Company managers assigned to it, for whom no compensation is envisaged;
  • to the members of the Nominations and Succession Committee: euro 20 thousand gross annual compensation, except for the Chairman.

Annual gross compensation of euro 25 thousand was then allocated to the Director belonging to the Compliance Programme Supervisory Body.

In accordance with best practices, no variable compensation was granted to Non Executive Directors (as defined hereinabove).

Please refer to the 2011 Report for the aggregate compensation granted by the Shareholders’ Meeting and its allocation during the previous term (and applied until April 21, 2011).

The Directors are also entitled to reimbursement of the expenses they incur on official business. Also in accordance with best practices, the Company implements an insurance policy called D&O (Directors & Officers) Liability covering the third party liability of corporate bodies, General Managers, Key Managers, Senior Managers and Executives in the performance of their functions. The purpose of this policy is to indemnify Pirelli for the cost of any compensatory damages deriving from the relevant provisions of the applicable national collective bargaining agreement and the laws and regulations governing appointed positions, with exclusion of wilful misconduct and gross negligence.

No insurance, social security or pension coverage other than mandatory coverage is envisaged for Non Executive Directors.