Chrysler 2013 Annual Report Download - page 355

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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.
D.3 Changes to the previous Compensation Policy
The compensation policy described in this Report does not materially differ from that approved in 2012.
E. Fixed and variable Components of the Compensation
E.1 Members of the Board of Directors
With reference to the policies relating to fixed and variable components of the compensation, the Company distinguishes between Executive
and non-Executive Directors.
With regard to non-Executive Directors with no specific additional responsibilities (including independent directors), the compensation consists
of a fixed fee set by shareholders. Non-Executive Directors holding particular offices receive also additional compensation, as indicated below.
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