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6.3. The Compensation, Appointments and Corporate Governance Committee

The Compensation, Appointments and Corporate Governance Committee’s role is to prepare the Board of Directors’ decisions pertaining to the compensation of executive directors and the policy for granting options to purchase new or existing shares of Company stock (as well as the policy for granting stock without consideration), to prepare changes in the composition of the Company’s management bodies, and to ensure that the principles of good corporate governance are properly applied.

To this end, it carries out the following tasks:


a it prepares recommendations, in liaison with the Chairman and Chief Executive Officer, regarding the succession of executive directors and the selection of new directors. In selecting possible directors, the Committee shall take into consideration the desirable balance in the Board’s composition, take special care that each candidate has the required capabilities and availability and ensure that the directors have the array of experience and skills necessary to enable the Board of Directors to carry out its duties effectively with the required objectivity and independence vis-à-vis both senior management and a given shareholder or group of shareholders;

a it shall be informed of the succession plan concerning members of the Group’s Executive Committee;


a it studies and prepares recommendations regarding both the salary and bonus portions of the executive directors’ short-term compensation, the granting of medium and long-term incentives such as performance shares and stock options, all the provisions regarding their retirement plans and all other in-kind benefits;

a it defines and implements the rules for setting the bonus portion of the executive directors’ compensation while ensuring that said rules are consistent with the annual appraisal of executive directors’ performance and with the Group’s medium-term strategy;

a it gives the Board an opinion regarding the general policy for granting stock options and the plans proposed by the Chairman and Chief Executive Officer;

a it is kept informed of and gives an opinion on the compensation policy for members of the Group Executive Committee and reviews the consistency of such policy;

a it issues a recommendation to the Board on the overall amount of directors’ fees, which is submitted to shareholders for approval. It proposes to the Board rules for allocating said directors’ fees and the individual amounts of the payments to be made as fees to the directors based on their attendance at Board and Committee meetings pursuant to Article 6 of these Bylaws;

a it reviews the policy and the projects proposed by the Chairman and Chief Executive Officer regarding employee share issues;

a it reviews the insurance coverage taken out by the Company regarding the civil liability of executive directors;

a it approves the information provided to shareholders in the Annual Report regarding (i) executive director compensation;

(ii) the principles and procedures used to set such compensation; and (iii) the grant of stock options to executive directors and the exercise of such options.

Corporate Governance

a it is tasked, in liaison with the Chairman and Chief Executive Officer, with issuing recommendations on implementing best corporate governance practices and preparing the assessment of the Board’s work;

a it periodically reviews whether the directors meet the independence criteria defined by the Board and makes recommendations if it appears necessary to review the independent status of directors;

a it continuously monitors changes in the Company’s ownership structure and determines how the Company’s awareness of such changes could be improved, particularly through legal procedures;

a it reviews all cases where there is a conflict of interest concerning one or more shareholders and (i) the interests of the Company or

(ii) the interests of the shareholders as a whole;

a it reviews the measures implemented within the Group concerning business ethics as well as any cases of conflict of interest concerning directors or members of the Executive Committee;

a it reviews and issues recommendations on best corporate governance practices, particularly concerning the membership structure of the Board of Directors;

a it prepares all matters for discussion between the Company and its shareholders relating to (i) changes in their equity interests;

(ii) their representation in the Company’s corporate governance structures; and (iii) any contractual commitments between them and the Company.

The Compensation, Appointments and Corporate Governance Committee is comprised of three to five members. A majority of these members, including the Committee Chairman, must be independent directors.

The Compensation, Appointments and Corporate Governance Committee shall hold at least three meetings per year. Calls to meetings are issued by the Committee Chairman and include the meeting agenda.

7. Secretary to the Board of Directors

Pursuant to the Company’s Bylaws, the Board of Directors shall name a Secretary who need not be a director.

The Board Secretary’s role is to call members to meetings of the Board of Directors when requested to do so by the Chairman and Chief Executive Officer and to prepare the draft minutes of the meetings of the Board of Directors, which are then submitted to the Board for approval. He or she is tasked with sending the working documents to the directors according to the procedure set forth in Article 3 of these Bylaws and in general responds to any request from directors