Chrysler 2009 Annual Report Download - page 365

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With these objectives, the Board of Directors, supported by the Compensation Committee, constantly monitors the effectiveness
of existing incentive schemes in relation to the global market and, in particular, the industries in which the Group operates.
The importance of management and the stability of that management in a period of significant volatility has been a key factor in
the success of the Group since 2004 and will have increasing importance in the future. Having effective tools for incentivization
and retention, therefore, is an essential competitive factor.
For the reasons stated above and at the proposal of the Compensation Committee, the Board determined that it is significantly
in the Company’s and Group’s interests to increase the incentivization and retention capability of the 2009-2010 Plan through
the adoption of amendments consisting of the introduction of a retention-only component, with an increase in the number of
rights available for allocation, and extension of its duration. The latter amendment will enable, even in consideration of the effects
already realised to date, extension of the effectiveness of the Plan to the date of approval of the 2011 consolidated financial
statements and, consequently, to correlate it to objectives which provide greater incentivization and are more closely aligned to
the future state of the global economy.
The proposed Plan is in line with latest international best practice and would take the form of stock grants which are based, for
the portion whose vesting is subject to the achievement of performance objectives, on performance measurement tools that
are consistent with current market conditions and linked to key performance indicators for the Group.
Tax effects of the Plan benefits are the responsibility of the beneficiaries.
Given its characteristics, no special funds would support the Plan.
Procedure for approval of amendments to the 2009-2010 Plan
Amendments to the 2009-2010 Plan were drafted by the Compensation Committee, composed of the independent directors
R. Berger (Committee Chairman), L. Garavoglia and M. Zibetti, which examined the matter during its meeting on 16 February
2010.
On the same date, the Board of Directors, with Sergio Marchionne abstaining, voted to approve the Compensation Committee’s
proposal and to submit the proposed amendments to the Plan to Shareholders for approval, pursuant to Article 114-bis of
Legislative Decree 58/98.
Based on the original conditions of the Plan, as approved by Shareholders on 27 March 2009, Mr. Marchionne was allocated 2
million rights that - subject to the achievement of pre-established performance targets for 2009 and 2010 and his remaining in
office until approval of the 2010 consolidated financial statements by the Board of Directors - would have entitled the beneficiary
to receive an equivalent number of Fiat ordinary shares.
The rights were to be vested in a single tranche upon approval of the 2010 consolidated financial statements by the Board of
Directors and the number of shares assigned was to be equivalent to 25% of the rights assigned if the 2009 targets only were
reached and 100% of the rights assigned if the 2010 targets were reached.
As the 2009 Group profit targets were met, in accordance with the original conditions of the 2009-2010 Plan, Mr. Marchionne
has acquired the right to receive, subject to his remaining in office until approval of the Group’s 2010 consolidated financial
statements, 500,000 Fiat ordinary shares.
In addition, the 2009-2010 Plan also provided for allocation, in one or more tranches, of a maximum 6 million additional
rights corresponding to an equivalent number of Fiat ordinary shares to a maximum of 300 executives in key positions that
have a significant impact on business results, to be selected by the Chief Executive Officer of Fiat S.p.A., consistent with the
organisational criteria adopted for the 2006 and 2008 plans. That part of the Plan has not been executed.
The proposed amendments, which would become effective upon your approval, consist firstly in the introduction of a retention-
only component of 4 million additional rights whose vesting is subject solely to continuation of a professional relationship with
the Group at the date of approval of the 2011 consolidated financial statements. Of those rights, 2 million are for the Chief
Executive Officer and a maximum of 2 million for other Group executives.
AGENDA
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