Chrysler 2011 Annual Report Download - page 359

Motions
for AGM
358
With the adoption of the Procedures for Transactions with Related Parties – pursuant to the Related Parties Regulation – the Compensation Committee was
assigned, exclusively with regard to matters related to compensation, responsibility for transactions with related parties. Accordingly, the Compensation
Committee is required to give an opinion on the substantial and procedural fairness of compensation-related transactions with related parties that are of
particular significance, as defined in those procedures.
B.3 Activities carried out by the Compensation Committee in relation to the Compensation Policy
As anticipated under Paragraph (A) above, the guidelines and principles of this Compensation Policy were prepared and approved by the Compensation
Committee on February 22, 2012.
The Compensation Committee held one preliminary meeting to be advised by the Chief Human Resources Officer and the general counsel on the main
items composing this Compensation Report, and in the subsequent meeting examined and recommended for approval to the Board of Directors this
Compensation Report.
C. Role of the independent expert (if any)
No independent expert was involved in the drafting of this Compensation Policy.
D. Objectives and Principles of the Compensation Policy
D.1 Objectives
The objective of the Compensation Policy is to ensure that the Group is adequately competitive, in each of the business sectors and geographic areas in
which it operates, to be able to attract, develop and retain highly qualified executives with strong leadership through periodically established targets that
are based on objective as well as generally applicable criteria.
In addition, the Compensation Policy seeks to incentivize individuals in key positions toward the achievement of Company and Group performance targets,
maintaining the interests of management continuously aligned to those of shareholders.
D.2 Principles
The principles and criteria applied in setting compensation for executive members of the Board of Directors, and Executives with Strategic Responsibilities
are intended to ensure the Group has the ability to attract, retain and motivate individuals who have the professional skills and experience to achieve
the best results in their respective areas of responsibility and take account of the impact of their role on the achievement of the Group’s financial and
strategic objectives. With that intent, the Compensation Policy is defined to align the interests of the Company’s management with those of the Company’s
shareholders through the creation of a strong link between rewards and Company and/or individual performance.
In general, the fixed compensation component adequately compensates individuals for services performed even if the variable components, where
established, are not received as a result of the performance targets set by the Board of Directors not being met. This is considered fundamental in
discouraging behaviour that is oriented exclusively to short-term results and inconsistent with the target level of risk established by the Group.
Executive Directors and Executives with Strategic Responsibilities may also be eligible to receive variable compensation, either immediate or deferred,
subject to the achievement of pre-established economic and financial performance targets.
In particular, variable compensation that is paid immediately is intended to incentivize individuals toward the achievement of the targets established in the
annual budget and to reward the level of achievement or over-achievement of those targets.
Where used, deferred components of variable compensation, which are share-based, are designed to incentivize achievement of the targets referred to
above, through an annual vesting mechanism, as well as enhancing medium to long-term retention and alignment with shareholder interests, objectives
typical of such instruments.