Chrysler 2012 Annual Report Download - page 333

332 Motions
for AGM
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.
Following the approval of the LTI Plan on April 4, 2012, 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 114-bis 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.
The part of the LTI Plan linked to the performance of the Group is directly linked with the achievement of pre-established financial performance objectives
for the performance period starting on January 1, 2012 and ending on December 31, 2014. For further information please refer to the Report published
pursuant Article 114-bis of the Financial Act.
The Board’s proposal to the shareholder regarding the LTI Plan is publicly available on the Company’s website: www.fiatspa.com.
I. Consistency with the long-term interests of the Company and the Risk Management Policy
The long-term interests of the Company and the risk management policy of the Group are integral part of the Group’s Internal Control System.
The Compensation Policy has been prepared in full consistency with the Internal Control System of the Group. Please also refer to Paragraph D above.
J. Vesting periods and deferral payment systems (if any)
Please refer to Paragraph H above.
K. Time restrictions
The LTI Plan does not provide for any lock-up mechanism after the shares are granted to the beneficiaries. Trading of such shares is subject to the
applicable laws and regulations. The rights granted under the LTI Plan will be non-transferable (except, once vested, in the event of death of the beneficiary).
L. Cessation of office or termination of employment
The Board of Directors may also grant Executive Directors with specific functions with an allowance in the event of resignation or termination (regarding
allowances granted in the previous years, please refer to Section II, Part I, (v) of this Report).
For Executives with Strategic Responsibilities post termination treatment consists in the relevant termination indemnity accruals set aside per collective
bargaining agreements. Furthermore, in the case of dismissal under mutual agreement, the Group collective bargaining agreement in Italy provides pre-
defined and nondiscretionary severance benefits for Executives covered by that agreement. Executives with Strategic Responsibilities whose professional
relation with the Group is not governed by such collective bargaining agreement are covered by Group defined nondiscretionary severance programs.
Furthermore, the Company may enter into non-competition agreements with its members of the Board of Directors and Executives with Strategic
Responsibilities and for specific and relevant professional roles of senior managers and executives, providing for payment of a fee in relation to the term
and scope of the obligation resulting from the agreement itself. The obligation is referred to the industry in which the employer operates in at the time of the
agreement and to its geographical scope. The scope of the obligation varies according to the individual’s role at the time of execution of the agreement.