Enel’s 2018 remuneration policy (“Remuneration Policy”) is consistent with the recommendations of the Corporate Governance Code. Such policy is aimed at attracting, keeping and motivating those persons that possess the most suitable professional skills to successfully manage the Company. Furthermore, the Remuneration Policy is aimed at encouraging the achievement of the strategic targets and the Company’s sustainable growth; as well as aligning the interests of the management with the main goal of creation of sustainable value for shareholders in the medium-long term, ensuring that remuneration is based on the results actually achieved by the parties concerned and by the Group as a whole.

This policy is also structured so as to guarantee an adequate balance between the fixed and variable components, and, as concerns the variables, between the short- and medium/longterm variables.

In accordance with the recommendations of the Corporate Governance Code, non-executive directors’ remuneration is composed only of the fixed component, while all directors who are members of one or more committees set up within the Board of Directors are granted an additional compensation. The remuneration is based on the commitment required of each of them, also taking into account their respective participation in one or more of the committees.

Specifically, the Chief Executive Officer/ General Manager’s remuneration consists of:

  • a fixed remuneration for both the directorship relationship and the executive relationship;
  • a short-term variable remuneration (MBO) that may concretely vary, according to the level of achievement of the following annual performance targets: (i) ordinary consolidated net income; (ii) funds from operations/ consolidated net financial debt; (iii) consolidated cash cost; (iv) safety in the workplace
  • a long-term variable remuneration linked to the participation in specific multiannual incentive plans. Set forth below are the performance objectives characterizing the Long- Term Incentive Plan 2018 (“LTI Plan 2018”):
    1. average TSR (Total Shareholder Return) of Enel compared to the average TSR of EUROSTOXX Utilities Index – EMU for the 2018-2020 period;
    2. ROACE (Return on Average Capital Employed) for the 2018-2020 period;
    3. CO2 emissions per kWheq of Enel Group in 2020.

In addition, according to the 2018 LTI Plan the disbursement of a significant portion of the long-term variable remuneration (equal to 70% of the total) is deferred to the second consecutive fiscal year of the three-year period referenced in the 2018 LTI Plan (i.e. deferred payment).

LTI (Long-Term Incentive) Plan

LTI (Long-Term Incentive) Plan

(1) In the event of achievement of the performance objectives.

Finally, the Company has the right to request the return of the variable remuneration paid (both short-term or long-term) or to withhold the deferred variable remuneration if this is paid or calculated on the basis of data that are subsequently found to be obviously incorrect (clawback and malus clauses).

The policy is described in the first part of the remuneration report approved by the Enel Board of Directors, based on a proposal by the Nomination and Compensation Committee, which is in turn made available to the public and submitted to the advisory vote of the Shareholders’ Meeting, pursuant to article 123-ter of Italian Legislative Decree 58/98.

The aforementioned report also provides information on the 2017 remuneration of directors, the General Manager, statutory auditors and executives with strategic responsibilities.

For more information, see the remuneration report available on www.enel.com.