The discipline that governs the operation of the Shareholders’ Meetings has been profoundly innovated following the provisions introduced into Italian legislation by Legislative Decree No. 27 of 2010 that adopted Directive 2007/36/EC in the legal system, designed to facilitate the participation by shareholders of listed companies in Shareholders’ Meetings.
The operation of the Shareholders’ Meetings is governed by the Shareholders’ Meetings Regulation duly approved by the Shareholders’ Meeting held on May 11, 2004 and subsequently amended by the Shareholders’ Meeting held on April 23, 2007, in addition to the law and the Company Bylaws.
Following the changes introduced by Legislative Degree No. 27/2010 that introduced into Italian legislation the so-called record date mechanism, the shareholders entitled to attend Shareholders’ Meetings and entitled to cast their vote are those shareholders who are entitled to attend the meeting and cast their vote at the close of the accounting day on the seventh trading day prior to the date set for the meeting in first or only call.
The records of credits and debits performed on accounts after this deadline will not influence the entitlement to vote at the Shareholders’ Meeting.
With regard to the shareholders’ meeting of the holders of savings shares this meeting is called by the Company’s Common Representative of savings shareholders or by the Company’s Board of Directors whenever deemed appropriate or whenever the call is requested, as required by law.
The savings Shareholders’ Meeting that was held on January 31, 2012 appointed prof. Giuseppe Niccolini, lawyer as the Common Representative for the 2012-2014 financial years.
DIRECTORS' INTERESTS AND TRANSACTIONS WITH RELATED PARTIES
The Company had established the principles of conduct, applicable since 2002, to execute transactions with related parties which were designed to assure a substantial and procedural correctness and transparency in the transactions executed by the Company, directly or through subsidiaries with the parties related to it.
The Company subsequently approved a specific and structured procedure for transactions with related parties (on November 3, 2010) following Consob’s adoption of special regulations governing transactions with related parties in March 2010.
In particular, the Procedure adopted by the Company establishes procedural rules designed to enhance further the substantial and procedural transparency of the transactions executed by the Company with related parties.
The Board of Directors resolved to extend the application of the Procedure and of the Consob Regulations to all the members of the Pirelli Shareholders’ Agreement (“Sindacato di Blocco azioni Pirelli”), based on the proposal by the Committee for Internal Control, Risks and Corporate Governance (appointed in accordance with the Regulation concerned to express its opinion on the procedure), even if not eligible to be qualified as related parties by virtue of the provisions contained in the Regulations.
The procedural policies adopted by the Company are more rigorous compared to the requirements envisaged by the Regulations. For example: Pirelli adopted very restrictive low thresholds and established higher qualitative thresholds not prescribed by the Consob Regulations. In particular, Pirelli envisaged a very low threshold (150 thousand euro) (that has the consequence of exempting the transaction from the application of the procedure) compared to the thresholds normally adopted by other listed companies and a “qualitative” threshold that qualifies a transaction as being of “greater significance” (for which the prior approval by the Board of Directors is required, in addition to the approval of the Independent Directors), regardless of the corresponding value (and even if lower than the thresholds established by the Procedure) when the transaction concerned has a significant impact on Pirelli’s business activities or may impact its managerial autonomy due to its nature, strategic importance, extent or commitments.
Furthermore, the Procedure has established that the opinion of the Committee for Transactions with Related Parties is also binding in the case of less significant transactions and has decided not to avail itself of the so-called whitewash mechanism in the event of an unfavourable opinion when concerning transactions with related parties of greater significance. In addition, the Procedure is also applicable to transactions executed autonomously by the subsidiaries with parties related to the Company and not only the transactions executed “through” them, accordingly, the situation envisaged also in this case is significantly more rigorous compared to requirements set out in the Regulations.
The Company has envisaged that the Committee invited to express its opinion on the transactions with related parties is always to be composed exclusively of Independent Directors, thereby, confirming the importance acknowledged to the role of the Independent Directors (and not only in the case of transactions with related parties of greater significance, as envisaged by the Regulations). Therefore, the mandatory approval by the competent Committee is also envisaged in this case, by adopting a more rigorous approach for all transactions with related parties compared to the requirements established in the Consob Regulations, (therefore, also for the transactions of “lesser significance” and not only the transactions of “greater significance” as prescribed by Consob).
The Company has then envisaged the adoption of a remuneration policy to allocate the remunerations to Directors and Executives with strategic business responsibilities, including the policies relating to agreements for consensual termination of the employment relationship which make it possible to exempt these decisions from the ordinary procedure provided that (i) the definition of the remuneration policy involved a committee composed exclusively of non-executive Directors the majority of whom were Independent Directors (the reader is referred to the “Remuneration Committee” section; (ii) the policy was submitted to the advisory vote of the Shareholders’ Meeting; (iii) the remuneration assigned is consistent with this policy (in this regard, the reader is referred to the Remuneration Policy section). Lastly, the Company adopted the Consob recommendation to envisage reviewing the Procedure at least every three years.
The Board has deemed that the advisory committees set up within the Board of Directors meet the characteristics and requirements envisaged by the Consob Regulations and those established by the Procedure submitted to the Board’s examination, and accordingly, has conferred the powers of the Committee for Transactions with Related Parties envisaged, in accordance with the cited Procedure, to the Committee for Internal Control, Risks and Corporate Governance, with the sole exception of the responsibilities concerning the remuneration of Directors and Executives with strategic business responsibilities, which are assigned to the Remuneration Committee.
The reader is referred to the Procedure published on the Pirelli Internet website for further information.
INSTITUTIONS AND COMMITTEES
