Chrysler 2011 Annual Report Download - page 362

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Auditors’ Reports
Motions for AGM
With regard to allowances in the event of resignation or termination as well as health and welfare benefits, including supplementary pension benefits,
please refer to Paragraphs L and M below, respectively.
In addition, the CEO may grant discretionary bonuses to these managers for specific transactions that are deemed exceptional in terms of strategic
importance and effects on the results of the Company and/or the Group.
When setting the compensation of Executives with Strategic Responsibilities, the CEO, on the basis of international benchmarking, considers the following
indicative criteria:
(a) the fixed component generally represents no more than 50% of the targeted Annual Total Direct Compensation;
(b) the annual targeted incentive for Executives with Strategic Responsibilities represents not less than 40% of their fixed gross annual salary;
(c) the medium/long term, variable, target-based annualized component (Long Term Incentive Plans) generally represents at least 50% of the total
variable component of the target-based Annual Total Direct Compensation.
F. Non-monetary benefits
Executive Directors with specific functions may be granted health and welfare benefits, private use of transport means and discounts on the purchase of
Group’s products. For security reasons, Executive Directors must travel with means of transport owned, leased or procured by the Group. For the same
reasons, the Group may also bear part of the costs related to personnel dedicated to the personal security of the Executive Directors. Executives with
Strategic Responsibilities may be assigned with health and welfare benefits and company cars. Other benefits may be granted in particular circumstances.
G. Targets for the assignment of variable Compensation
The standard compensation structure for Executive Directors and Executives with Strategic Responsibilities provides a fixed component as well as short
and, subject to the approval of the LTI Plan, long-term variable components.
The short-term variable component is subject to the achievement of financial targets established in the annual budget and the amount determined in
relation to the level of achievement or over-achievement of those targets, up to a maximum established in relation to the fixed component.
With regard to the annual Performance and Leadership Bonus Plan, the relative metrics are set on the basis of annual budget. The short-term variable
component of Executive Directors’ compensation is determined on consolidated Group results, whereas, for Executives with Strategic Responsibilities,
metrics are established on consolidated Group results and/or on each Executive’s area of direct responsibility.
The Compensation Committee and Board of Directors will review any unusual items that occurred in the performance year to determine the appropriate
overall measurement of achievement.
In any event the choice of metrics provides a natural balance in order to prevent short term oriented decisions not consistent with the level of risk deemed
acceptable by the Group.
Subject to the approval of the LTI Plan, the long-term variable component consists of a share-based incentive plan that links an appropriate portion of
the variable component to the achievement of pre-established performance targets, that are concretely measurable and correlated to value creation for
shareholders over the medium to long term. Please refer to Paragraph E above and to the Report published pursuant Article 114bis of the Financial Act.
H. Targets for the assignment of share-based incentive schemes
The LTI share-based Plan is envisaged for individuals at Group companies whose activities and leadership have a significant impact on the Group. This
plan intends to incentivize individuals in key positions, including Executives with Strategic Responsibilities, toward the achievement of Company and Group
performance targets through the alignment of medium to long-term incentives to value creation for shareholders.