It is the Pirelli Group’s policy not to enter into “parachute” agreements - with Directors, General Managers, Executives with strategic responsibility, Senior Managers and Executives - that regulate ex ante the economic aspects arising from early termination, at the initiative of the Company or the individual (so-called “parachute” agreements).
Not deemed to be “parachute” agreements are those agreements made in the event of interruption of the relationship existing with the Pirelli Group for reasons other than just cause. In fact, Pirelli’s approach is to seek agreements for “closing” the relationship consensually. Notwithstanding, however, legal and/or contractual obligations, agreements for terminating relationships with the Pirelli Group are based on the reference benchmarks in the field and within the limits defined by case law and the practices of the country in which the agreement is made.
The Company internally defines the criteria with which itself and the other Group companies must comply in managing agreements regarding early termination of relationships with executives and/or Directors vested with special roles.
With regard to Directors vested with special roles, who are assigned specific responsibilities, and who are not linked to executive labour relations, Pirelli does not provide for payment of compensation or extraordinary compensation related to termination of the mandate. Payment of a specific compensation may be granted, subject to prior assessment by the competent company bodies, in the following cases:
- termination at the initiative of the Company, without just cause;
- termination at the initiative of the Director for just cause, meaning, for example, a substantial change to the role or to the tasks assigned and/or cases of “hostile” takeover.
In such cases, the compensation is equal to 2 years’ annual gross compensation, meaning the sum of the gross annual fixed salary for the position held in the Group, the average annual variable remuneration (MBO) accrued during the previous three years, and the TFM on said amounts.