Chrysler 2011 Annual Report Download - page 285

Fiat S.p.A.
Statutory
Financial
Statements
at 31 December
2011
Notes
284
The costs associated with defined contribution plans consisted of amounts paid by the Company to the Italian state social security organization (INPS) and
other social security and assistance organizations for post-employment defined contribution plans (pension and healthcare) on behalf of employees in all
categories. Following the introduction of Law 296/06, leaving entitlements in Italy (trattamento di fine rapporto) accrued from 1 January 2007 and paid in
to supplementary pension funds or the fund established by INPS are recognized under “Defined contribution plans and social security contributions”, while
adjustments to the provision for leaving entitlement accrued before 1 January 2007 are recognized under “Leaving entitlement and other defined benefit
plans” (see also Note 20).
Social security contributions represent amounts paid by the Company to social security agencies in relation to short-term benefits for situations such as
illness, injury and compulsory maternity leave.
Other personnel costs related mainly to accruals for variable compensation, leaving incentives and insurance.
For 2011, compensation to executives with strategic responsibilities was €11,217 thousand (€6,018 thousand of which was charged back to the Group
companies where they carried out their activities). The total cost for the year includes provisions for leaving entitlements accrued during the year, as well as
company contributions to state and company defined contribution schemes and other social security contributions totaling €6,754 thousand.
6. Other operating costs
Following is a breakdown of other operating costs:
(€ thousand) 2011 2010
Costs for services rendered by Group companies and other related parties 32,707 36,412
Costs for services rendered by third parties 23,922 34,696
Compensation component from stock option and stock grant plans 12,014 17,241
Leases and rentals 3,051 3,254
Purchase of goods 702 688
Depreciation of property, plant and equipment 1,788 1,674
Amortization of intangible assets 132 40
Misc. operating costs 6,157 7,586
Total other operating costs 80,473 101,591
Costs for services rendered by Group companies primarily consisted of support and consulting services in the administrative and financial areas, as well as
IT systems, public relations, payroll, security and internal audit services (see Note 30).
Costs for services rendered by third parties principally included legal, administrative, financial and IT services.
For 2011, compensation for the directors and statutory auditors of Fiat S.p.A. totaled €5,807 thousand and €230 thousand, respectively. For directors, that
compensation includes fees approved by shareholders, as well as compensation set by the Board of Directors for directors with specific responsibilities.
The compensation component from stock option and stock grant plans represents the notional cost of options granted to the Chief Executive Officer.
Following the Demerger on 1 January 2011, the notional cost of the portion of the 2009 stock grant plan covered by Fiat S.p.A. shares (€5,286 thousand)
was recognized directly in the relevant equity reserve (see Note 19). The notional cost of the portion covered by Fiat Industrial S.p.A. shares (€6,728
thousand) was recognized through an increase in provisions for stock option and stock grant plans (see Note 20).
Miscellaneous operating costs consist of membership fees and contributions to trade associations, indirect taxes and duties (property tax, non-deductible
sales tax, etc.), prior year expenses and other minor charges.
Overall, other operating costs were down over the prior year, reflecting non-recurring costs incurred in 2010 in relation to the Demerger and the lower cost
of services purchased from Group companies and external providers in 2011, attributable in large part to the reduction in the scope of operations.