On 23 February 2021, the Iren Board of Directors, upon proposal of the Company’s Remuneration and Appointments Committee, approved the Guidelines on the remuneration policy for Directors, including executive directors/executives with special duties, and Statutory Auditors of IREN, along with the top management of the IREN Group for the year 2021 (“2021 Guidelines”), in line with the recommendations of the current Corporate Governance Code for listed companies.
Objectives and general principles of the remuneration policy
Remuneration policies, defined in compliance with the Company’s governance model, as well as with the recommendations contained in article 5 of the Corporate Governance Code, pursue the general goal of attracting, retaining and motivating individuals useful for the development of the Group, recognising the responsibilities assigned to them, and guiding their actions towards the achievement of company objectives, rewarding the results obtained.
More specifically, these policies serve to align the interests of management with respect to the prioritised objective of guaranteeing the sustainable success of the Company, by increasing the value for shareholders over the medium/long-term, making it possible to achieve stable and sustainable results over the short and long-term, in line with the Business Plan, ensuring adequate retention of those in strategic positions for governance and business and, more generally, promoting the company's mission and values, with particular attention to sustainability.
In terms of remuneration policies, the short-term incentive system for the IREN Chief Executive Officer and General Manager and the IREN Group Senior Executives with Strategic Responsibilities represents a tool intended to differentiate excellent performance without any form of automatic recognition and not linked to the achievement of assigned objectives and, in each case, pursues the goal of:
- allow performance to be assessed on quantitative and qualitative variables with a direct link to company performance, as well as to strategic objectives and sustainable success, in line with the Company's risk management policy;
- guaranteeing that the variable component, with respect to the fixed component, creates an incentive and is significant;
- avoiding the creation of excessively complex mechanisms, difficult to communicate and manage;
- selectively guiding individual performance, while also guaranteeing the achievement of Group and company goals.
The long-term variable component – confirmed for 2019-2021 for the IREN Chief Executive Officer and General Manager and the IREN Group Senior Executives with Strategic Responsibilities – has the objectives of:
- stimulating the ability to create value for the Group, rewarding the achievement of industrial, strategic and business objectives;
- guaranteeing the achievement of economic/financial objectives in the context of medium/long-term sustainability;
- strengthening the motivation of the relative beneficiaries in pursuing the strategic objectives set out in the Business Plan, aligning their interests with those of stakeholders;
- attracting and motivating employees, rewarding the achievement of results and a culture of performance, as well as virtuous behaviours implemented to achieve the same;
- developing and strengthening retention policies for key company resources, making it possible to increase their sense of belonging and create incentives for them to remain with the IREN Group;
ensuring that the pay-mix (relative weights of fixed remuneration, short-term and long-term variable remuneration) is in line with market practices, without prejudice to the principle of sobriety which characterises the Company.
As for the non-executive Directors and the members of the Board of Statutory Auditors, the objective of the policies is to make available to the Shareholders all the elements to enable them to adopt the measures pertaining to them, defining, in the appropriate positions, compensation fair to the proficiency, professionalism and commitment required by the tasks assigned to them as well as to the size and sector characteristics of the Company and its situation.
The process of defining the 2021 Guidelines also took into account:
- resolutions made on the issue of compensation by the Directors, adopted by the Shareholders' Meeting on 22 May 2019, in particular the principles of the comprehensive nature of remuneration and the obligation to pay back employees and of amounts established as compensation for Directors with special offices within IREN;
- the indications expressed by public shareholders regarding the positions appointed by them pursuant to current shareholders’ agreements;
- the overall significance of positions and roles examined.
- the results of the remuneration benchmarking carried out by the Board of Statutory Auditors, concerning the compensation for the Board of Statutory Auditors, as well as by the Remuneration and Appointments Committee, regarding the pay for the non-executive Directors and the members of the internal Board Committees.
Market and institutional investor concerns regarding top management remuneration policies and best practices in this area were examined through:
- insights into the outcome of the shareholders' vote on the Report on 2020 Remuneration Policy and 2019 compensation Paid submitted to the Shareholders' Meeting held on 29 April 2020;
- examination of the issues needing attention raised by the Chairperson of the Italian Corporate Governance Committee in the letter sent in December 2020 to the Chairpersons of Italian listed companies;
- an in-depth examination of the matter as part of the Board of Directors' annual self-assessment activity and its Committees carried out under Article 4 and Principle XIV of the Code.
With reference to the evolution of the regulatory context and the transposition into Italian law of Directive 2017/828 (so-called "SHRD II"), recently concluded with the update of the Consob Issuers' Regulations, a general alignment of the remuneration policies to the new regulations was carried out, in particular concerning say on pay.
Also, for 2021, the Group took account of the Principles adopted by the Shareholders' Meeting of 22 May 2019, already in force in the previous Board mandate and inspired by a logic of compensation containment:
- principle of the all-inclusive nature of the remuneration received for the employment relationship and the obligation to repay it, which applies to all senior managers/employees of Group companies, under which the Group must hold all corporate positions held within Group companies/entities without any additional remuneration since they are part of the duties;
- the principle of the use of the Directors of the parent company IREN’s Board of Directors and employees prevailing in the administrative bodies of the companies directly and indirectly controlled by IREN.
The same Shareholders' Meeting also established the maximum ceiling for overall compensation paid to Directors with special offices, under the Articles of Association for the three years 2019-2021 (Chairperson, Deputy Chairperson and the Chief Executive Officer, taking into account the above principles). These limits guided the Remuneration Policy's preparation since the Board's inception.
The criteria summarised above, as well as the principles adopted by the Shareholders' Meeting were applied, to the extent compatible, also when the delegated bodies determined the remuneration for IREN Group Senior Executives with Strategic Responsibilities, as established in the Corporate Governance Code.
Correlation between strategy, sustainability and remuneration policies
The new Industrial Plan's growth strategy launched by IREN in 2020 is consistent with the leading trends already identified in previous industrial plans and confirmed in the current one to become a leading operator in sustainability by developing the "multi-circle economy".
In this context, IREN's remuneration policy represents an element of fundamental importance in ensuring the pursuit of business sustainability's strategic objectives and guaranteeing an increase in shareholder value in the medium to long term, in line with the 2020-2025 Business Plan.
2021 Remuneration Policy
A summary of the 2021 Guidelines is provided in the details.
Report on the 2021 Remuneration Policy and Compensation Paid for 2020
The Report, approved by the Iren Board of Directors on 7 April 2021, following proposal by the Remuneration and Appointments Committee, was created in observance and application of the current legal and regulatory requirements.
The Report indicates:
- in Section One, the Remuneration Policy adopted for 2021 for the remuneration of the Company's Directors and the Iren Group's Senior Executives with Strategic Responsibilities and, without prejudice to Article 2402 of the Italian Civil Code, the members of the Company's Board of Statutory Auditors, specifying the general purposes pursued, the bodies/entities involved, the way these contribute to the corporate strategy, the pursuit of the Company’s long-term interests and sustainability, and the procedures used to adopt and implement the Policy, as well as changes which have occurred with regards to 2019; the First Section was submitted for the approval of the shareholders at the Annual Shareholders’ Meeting of 6 May 2021 (binding vote), with votes in favour totalling 93.52% of shareholders represented;
- in Section Two, the compensation paid in 2020 to the Directors and Auditors, by name, and to Iren Group Senior Executives with Strategic Responsibilities, in aggregate form, as well as the shareholdings in Iren held by members of the administration and control bodies and by other Iren Group's Senior Executives with Strategic Responsibilities, as well as non-legally separated partners and minor children, directly or through subsidiaries, trust companies or third parties; the Second Section was submitted for assessment by the shareholders at the Annual Shareholders’ Meeting of 6 May 2021 (consultation vote), with votes in favour totalling 96.03% of shares represented.
The Policy illustrated in Section One of this Report has also been adopted by the Company, as established in Consob Regulation 17221/2010, as amended, on related-party transactions, also in accordance with and pursuant to article 6, letter f of Iren’s Related-Party Transaction Procedure
 The IREN Chief Executive Officer and General Manager is the exception, limited solely to the fixed compensation component, pursuant to article 2389, paragraph 3, Civil Code, due for the exercising of his powers as the Company's Chief Executive Officer.