104 348
Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
104
neration are performance-related and the variable ones in
particular account for an important percentage of the overall
compensation package offered.
The fixed portion of remuneration is reviewed annually and
revised if necessary to take account of competitiveness
versus market compensation data, internal equity and indi-
vidual performance, all of which in compliance with local reg-
ulations. This meritocratic approach is based on the P3 global
performance appraisal system which is applied uniformly and
consistently throughout the Group.
The executive population and 500 other managers of the
Group participate annually in the MBO (Management by
Objectives) plan under which an annual incentive is paid upon
meeting predetermined Group objectives in line with the pri-
orities identified in the business plan. In 2014 these objectives
(on-off conditions) were represented by the Group's NFP (Net
Financial Position) and EBITDA. The value of the incentive
paid depends on the percentage achieved of the predeter-
mined business and/or functional and/or individual objec-
tives, defined with the aim of aligning individual behaviour
with the organisation's annual strategic objectives. Where
possible, individual sustainability objectives are included. In
some cases, a multiplier is applied to the final value of the
MBO, depending on the P3 performance appraisal. Also taken
into consideration when determining the bonus payable are
the employee's qualitative performance and overall conduct.
The MBO has very strict rules which are communicated clearly
and transparently to all participants.
In a spirit of continuity with the past, and convinced of the
importance of linking executive remuneration to business
short-term as well as long-term results, the Prysmian Group
has started to study a new long-term incentive plan, which
will be submitted for shareholder approval.
Group employee share purchase plan (YES Plan)
The Prysmian Group has also launched the YES Plan (Your
Employee Shares Plan), open to all Group employees. The
Plan was introduced in 28 countries at the end of 2013,
after an intense communication campaign and detailed
presentations. The YES Plan's regulations allow participating
employees to buy Prysmian shares, during specific purchase
windows in 2014, 2015 and 2016, on preferential terms and on
condition that they retain the shares for at least 36 months
from the purchase date. Plan participants can buy Prysmian
shares at a discount, that varies from 1% for the CEO and
Senior Managers, to 15% for executives and 25% for the
remaining workforce, thereby encouraging employee partic-
ipation at every level. Moreover, all participants are given 6
shares as a one-off entry bonus.
The objectives pursued in launching this plan are to increase
employees’ sense of closeness and belonging to the Group
as well as their engagement with and understanding of the
business, in order to converge the long-term interests of
shareholders, customers and employees and to strengthen
the internal perception of Prysmian Group as one, single
company, a real "One Company". In brief, the Group's intent
is to have its employees become stable shareholders, thus
making them owners of a small part of the Group in which
they work.
Plan participation in the launch year confirmed the expecta-
tions: around 5,000 employees, or 32% of the total (of whom
about 55% were BC personnel) signed up to the Plan in 2014,
confirming their great sense of corporate belonging and their
confidence in Prysmian's people and in its future.
Plan participation in certain countries was very high, with for
example, nearly all employees signing up in Romania, about
83% at the headquarters in Milan and 74% in Turkey.
Social and internal relations
The Group maintains constant and positive relations with
employee representatives and trade unions based on
mutual respect and fair discussion, in the belief that, with
due respect for each other's roles, common interests can be
pursued through constructive dialogue.
Employee and trade union representatives therefore operate
freely in compliance with local laws and practices.
During 2014 a number of industrial restructurings in France
and the Netherlands were the subject of discussions with
the unions, leading to agreements for the definition of the
relevant social plans.
Meetings of Prysmian's European Works Council were held in
May and October and were attended by the body's delegate
members. Both meetings were prepared beforehand by the
Select Committee which decided the content in terms of
information about the business, its most significant initia-
tives, and information about the shareholders, with ample
room left for further questions.
For a more detailed understanding of the Prysmian Group's
commitment to human resources, please refer to the 2014
Sustainability Report.