Chrysler 2015 Annual Report Download - page 126

126 2015 | ANNUAL REPORT
Remuneration of Directors
Discussion of 2015 Equity Awards
In 2015, the CEO was awarded 4,320,000 Performance Share Units subject to the vesting conditions under the above
described LTI program. This grant was approved by Shareholders on April 16, 2015.
In addition, upon proposal of the Compensation Committee, the Non-Executive Directors exercised their authority
to grant periodic bonuses for specific transactions that are deemed exceptional in terms of strategic importance
and effect on the Company’s results. They granted a bonus to the CEO, who was instrumental in major strategic
and financial accomplishments for the Group. Most notably, through the CEO’s vision and guidance, Fiat Chrysler
Automobiles NV was formed, creating exceptional value for the Company, its shareholders, employees and
stakeholders. The bonus consists of a one-time extraordinary grant of 1,620,000 restricted shares which vested
immediately upon approval by Shareholders on April 16, 2015.
Pre-merger plans
On April 4, 2012, Fiat S.p.A. General Shareholders Meeting adopted a Long Term Incentive Plan (the “Retention LTI”),
in the form of stock grants. As a result of the Shareholders’ resolution the Group attributed the CEO with 7 million
rights, representative of an equal number of Fiat S.p.A. ordinary shares. The rights vested ratably over three years
subject to the requirement that the CEO remained in office. On February 22, 2015, the final third vested.
On May 7, 2015, the FCA US LLC Board approved a valuation and unit freeze for the Directors’ RSUs, as of
December 31, 2015 under the Amended and Restated FCA US LLC Directors Restricted Stock Unit Plan. The final
unit valuation was U.S.$12.13 per unit. The number of units by Director can be referenced in the equity awards table
at the end of this report.
For consistent treatment, the unit freeze was also applied to the CEO’s Unit Appreciation Right (“UAR”) award that
was granted on December 3, 2012 by the FCA US LLC Board of Directors. The UAR arrangement was intended to
place the CEO in a similar economic position to the other FCA US LLC directors, taking into account differences in
payment timing under the CEO’s grant that were required by U.S. tax restrictions and previously applicable structural
requirements of the U.S. Troubled Asset Relief Program. In order to provide for consistent payment timing among
the CEO’s prior grants and those to other FCA US LLC directors, the CEO was originally granted the UAR that will be
redeemed only at the earlier of the end of his Board service or 10 years from the UAR grant date (i.e. December 3,
2022) in cash using the final valuation of U.S.$12.13 per unit less the UAR reference price per unit. The UARs have no
further appreciation opportunity. To approximate the economic treatment of awards for other FCA US LLC directors at
the time of grant, the UAR was coupled with an arrangement whereby in December 2012 the CEO placed in escrow
the entire gross proceeds required by U.S. tax law to be paid at that time to the CEO in respect of his prior FCA US
LLC director grants, which will be released from escrow at the same time the UAR is redeemed. The combined value
of the UAR and escrow approximates the value of the corresponding FCA US LLC awards held by FCA US LLC
directors of equivalent tenure to the CEO.
Post Mandate and Pension
Based on legacy arrangements, both Executive Directors have a post-mandate benefit in an amount equal to five
times their last annual base compensation. The award is payable quarterly over a period of 20 years commencing
three months after the conclusion of employment with the Company, with an option for a lump sum payment.
Also under legacy plans, the CEO participates in pension plans for which the Company mandatorily pays defined
contributions to social security institutions. In 2015, the Company reported a cost of €0.8 million in connection with
these post-mandate benefits and €3.1 million in social security contributions.