Short-term incentive plan: STI\MBO

The MBO plan for DIRs is based on the achievement of pre-established annual objectives, balanced between financial and non-financial objectives.

For Executives with strategic responsibilities with a total maximum variable remuneration, therefore including the two MBO and LTI components, set at 200% of fixed remuneration, this normally represents 100% of the gross annual remuneration (“Maximum Bonus”). The payment of the MBO is subject to meeting the entry gate requirements. In particular, no incentive is recognised if the threshold identified for the activation of the short-term incentive system (“Entry Gate”) is not exceeded. In particular, for Executives with strategic responsibilities with “Group” roles, the entry gate corresponds to the Group's EBITDA (no less than 80%) of the amount defined in the budget for the year.

The aforementioned indicators will be considered net of the positive or negative components deriving from extraordinary transactions approved by the BoD in the reference year, unless they are envisaged in the budget.
In line with the Company's strategic drivers focused on profitable growth, technological/digital innovation and transformation, operational excellence, people engagement and sustainable value creation, the DIRs MBO is structured as follows:
•  60% Company Objectives correlated with economic-financial and sustainability objectives
• 40% Individual Objectives correlated to area or individual objectives linked to specific responsibilities, as well as to the doValue Competences for the expressed leadership.

Payment method: 100% monetary

Pay-out: the Pay-Out curve is linear for the quantitative economic and financial objectives, while for the other ESG, Area and/or individual objectives and for the Leadership Competence a five-level assessment scale is applied (1 to 5) where a score of 1 reduces the payout to zero and a 5 entails the payout of 100% of the maximum opportunity.
 

In the event that the performance achieved is below the “Minimum” threshold, there is no right to the relative bonus, while if the overall performance achieved is higher than the maximum threshold, the bonus has an upper limit, as represented below in the table that expresses the maximum opportunities linked to the results achieved:

Entry Gate (access condition):
•    Group EBITDA for the part relating to the Business Objectives

The variable remuneration linked to the MBO is paid in consideration of the level of achievement of the assigned objectives. The maximum opportunity is recognised upon achievement of the maximum level of all assigned objectives. This is equivalent to 100% of the fixed remuneration for Executives with strategic responsibilities whose MBO/LTI distribution is 50%/50%.
For the DIRs with Control Functions, an MBO without economic and financial KPIs is envisaged, with an overall incidence on total remuneration of less than 50% of the gross annual fixed remuneration.
The Executives with strategic responsibilities objectives are defined by the Group Chief Executive Officer (with the exception of the DIRs with Control Functions) and the assessment of the component relating to leadership competences is carried out by the Line Manager.
The variable remuneration awarded is progressively reduced if the performance is not in line with the assigned objectives. It is reduced to zero if the minimum performance threshold that activates the MBO system is not exceeded.

The incentive is paid in monetary form, normally within 30 days following the approval by the Shareholders' Meeting of the financial statements for the year in question.

Without prejudice to the right to compensation for any further damage, after the payment of the variable remuneration, the Company reserves the right to ask the CEO to return the bonus (“clawback”) within five years from the date of assignment of the variable remuneration and regardless of whether the relationship is still in place or has been terminated, if one of the following cases occurs:

•    a beneficiary’s fraudulent behaviour or gross negligence to the detriment of the Group;
•    serious and intentional violations of laws, the Code of Ethics and company rules;
•    allocation of a bonus based on data which later turns out to be manifestly incorrect or intentionally altered.

The clawback clause applies on the basis of the provisions in force in the respective countries.
The disbursement of variable remuneration is also subject to the following malus condition: 100% reduction (MBO reduced to zero) if one of the clawback clauses occurs during the performance period and before the payment of the incentive.

As already indicated, Executives with strategic responsibilities may not be recipients of discretionary one-off payments. If this were to happen, it would be considered a derogation from the Remuneration Policy, permitted only in exceptional circumstances and following the procedure outlined in paragraph 2.2.

However, the Board of Directors may define an attraction plan, with the opinion of the Appointments and Remuneration Committee, aimed at attracting or retaining key roles for the long-term success of the Group. The amount may not exceed the fixed remuneration.

Long-term variable remuneration: LTI

Proposal LTI 2024-2026 Metrics and Targets

The KPIs of the 2024-2026 cycle and the related targets are as follows:

Notes:
(LTI EBITDA: Ordinary Group EBITDA)
(2) Share price appreciation: price adjusted for dividend distributions and other extraordinary transactions on the share capital. It will be considered the average share
price of last 30 days of trading of 2026.
(3) REVENUES GROWTH: the objective excludes the effect of any M&A
(4) ESG Sustainability Index: current MSCI rating “AAA”, Sustainalytics “Low Risk, Moody's, Robust”