Zignago Vetro S p A : Remuneration Policy and Report 2023

Remuneration Policy and Report

in accordance with Article 123-ter of the CFA and 84-quater of the Issuers'

Regulation

Issuer: Zignago Vetro S.p.A.

Website:www. zignagovetro.com

Date of approval of Report: March 14, 2024

GLOSSARY ............................................................................................................................................... 3

SECTION I ................................................................................................................................................. 4

2. Appointments and Remuneration Committee .................................................................................... 5

• 3. Policies and objectives ....................................................................................................................... 7

• 4. Director Remuneration ..................................................................................................................... 12

• 5. Committee Remuneration ................................................................................................................. 13

• 6. Remuneration policy for Independent Directors .............................................................................. 13

• 7. Remuneration policy for Executive Directors .................................................................................. 13

• 8. Remuneration policy for Senior Executives ..................................................................................... 14

• 9. Malus and Clawback ........................................................................................................................ 15

• 10. Non-monetary benefits ................................................................................................................. 16

• 11. Clause for the maintenance in portfolio of financial instruments ................................................. 16

• 12. Effects of the termination of the relationship on the rights assigned within the framework of the

incentive plans based on financial instruments ........................................................................................ 16

13. Remuneration for members of the Board of Statutory Auditors .................................................. 16

14. Exceptional circumstances ........................................................................................................... 17

SECTION II ............................................................................................................................................. 18

FIRST PART ............................................................................................................................................ 18

The values of compensation, per item, as per the Compensation Policy approved during the reporting

year are as follows: ................................................................................................................................... 18

• 1. BOARD OF DIRECTORS REMUNERATION .............................................................................. 18

• 2. ANNUAL CHANGE IN REMUNERATION AND PERFORMANCE ......................................... 23

• 3. BOARD OF STATUTORY AUDITORS' REMUNERATION ...................................................... 24

• 4. SENIOR EXECUTIVES REMUNERATION ................................................................................. 24

• 5. FURTHER INFORMATION ........................................................................................................... 25

SECOND PART ....................................................................................................................................... 26

TABLE 1: Remuneration of the Board of Directors, Board of Statutory Auditors, General Managers

and Senior Executives .............................................................................................................................. 26

SCHEDULE 7-ter: Information on Holdings of the Board of Directors and Statutory Auditors, General

Managers and Senior Executives .............................................................................................................. 27

TABLE 2/A: Shareholdings of the Board of Directors, Board of Statutory Auditors and General

Managers: Zignago Vetro S.p.A ............................................................................................................... 27

TABLE 2/B: Shareholdings of other company Senior Executives ....................................................... 28

Table 3: Stock options granted to the members of the Board of Directors, General Managers and

other Senior Executives ............................................................................................................................ 29

Table 4: Financial instrument-based incentive plans, other than stock options, in favour of members

of the Board of Directors, General Managers and other Senior Executives ............................................. 30

GLOSSARY

Shareholders' Meeting: the Shareholders' Meeting of the Issuer.

Italian Stock Exchange: Borsa Italiana S.p.A.

Code/Corporate Governance Code: the Corporate Governance Code of listed companies approved in January 2020 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria, available to the public on the Borsa Italiana websitewww.borsaitaliana.it.

Civil code: the Italian Civil Code.

Board of Statutory Auditors: the Board of Statutory Auditors of the Issuer.

Appointments and Remuneration Committee: the committee for remuneration and appointments established within the Board of Directors of the Issuer.

Board or Board of Directors: the Board of Directors of the Issuer.

Issuer or Zignago Vetro or the Company: Zignago Vetro S.p.A.

Year: financial year 2023, to which the Report refers, therefore the year ending December 31, 2023.

Issuers` Regulation: the Issuers' Regulation issued by Consob resolution No. 11971 of 1999 (as subsequently amended), concerning the governance of the issuer.

Report: this Remuneration Policy and Report, prepared in accordance with Article 123-ter of the CFA and 84-quater of the Issuers' Regulation.

By-Laws: the By-Laws of the Company in force at the date of the Report.

CFA: Legislative Decree No. 58 of February 24, 1998 and subsequent amendments and supplements.

SECTION I

1.

Introduction

The Company draws up and applies a general remuneration policy which attracts, motivates and retains individuals possessing the professional standards required to achieve Group targets.

The policy was developed on the basis of a clear and transparent process and in which the Shareholders'

Meeting, the Board of Directors, the Board of Statutory Auditors and the Appointments and Remuneration

Committee all play a central role.

a)Shareholders' MeetingOn remuneration, and as per Article 17.9 of the By-Laws, upon the appointment of Directors the Shareholders' Meeting determines the compensation to be paid to those Directors for the period of their mandate, including by establishing a total amount determined in accordance with Article 2389, paragraph 3, of the Civil Code. Pursuant to Article 123-ter, paragraph 3-bis of the CFA, the Shareholders' Meeting resolves on the first section of the Report, which describes the Remuneration Policy for members of the Board of Directors, General Managers, and other Senior Executives as defined by the Board of Directors (on the proposal of the Appointments and Remuneration Committee). It also expresses a non-binding advisory opinion on the second section of the Report, which provides an adequate illustration of each of the items making up remuneration and analytically describes the compensation paid in 2023.

Lastly, the Shareholders' Meeting resolves on any compensation plans based on shares or other financial instruments for members of the Board of Directors, employees and consultants, including Senior Executives, pursuant to Article 114-bis of the CFA.

b)Board of Directors

As regards remuneration, the Board of Directors:

• • establishes internally an Appointments and Remuneration Committee;

• • defines and re-evaluates, where necessary, and on the proposal of the Appointments and Remuneration

Committee, the remuneration policy for Directors and Senior Executives;

• • determines the remuneration of Senior Directors, after consulting the Board of Statutory Auditors and on the proposal of the Appointments and Remuneration Committee;

• • approves the Report, which is prepared in accordance with Article 123-ter of the CFA;

• • prepares, with the support of the Appointments and Remuneration Committee, any compensation plans based on shares, options or other financial instruments, and submits these for the approval of the Shareholders' Meeting in accordance with Article 114-bis of the CFA;

• • implements any compensation plans based on shares or other financial instruments, with the assistance of the Appointments and Remuneration Committee by proxy of the Shareholders' Meeting.

  c)

  Board of Statutory Auditors

As regards remuneration, the Board of Statutory Auditors plays a consultative role. It formulates its opinion where required by current legislation, and expresses its opinion on proposals for the remuneration of Directors holding special offices as per Article 2389, paragraph 3 of the Civil Code and Article 17.10 of the By-Laws.

d)Appointments and Remuneration CommitteeThe remuneration policies for Senior Directors, both concerning the fixed part and the variable part, are proposed annually by the Appointments and Remuneration Committee and submitted for the approval of the Board of Directors of the Company, following approval by the Board of Statutory Auditors. For further information on the role of the Appointments and Remuneration Committee, see the following paragraph.

2.

Appointments and Remuneration Committee

Composition

The Remuneration Committee was appointed with Board motion of March 22, 2007.

The Company, also in consideration of the results of the self-assessment process, decided not to set up an Appointments Committee, instead preferring to assign these functions to the Remuneration Committee, which therefore on March 15, 2018 changed its name to the "Appointments and Remuneration Committee".

The Board of Directors' meeting of April 29, 2022 re-elected the members of the Appointments and Remuneration Committee, whose mandate expired, in the persons of Mr. Franco Moscetti (Non-Executive and Independent Director), Ms. Daniela Manzoni (Non-Executive and Independent Director), and Mr. Stefano Marzotto (Non-Executive Director). The Board, at the time of the appointment, evaluated and considered adequate the financial and accounting qualifications of the members of the Appointments and Remuneration Committee.

Duties

As regards appointments, the Appointments and Remuneration Committee plays a consultative role in identifying Directors of appropriate professional standing and expertise, above all on appointment of the Board of Directors, in order to improve the efficiency and functioning of the Board. It also has an investigative and consultative role with regards to matters presenting an increased risk of conflicts of interest.

On the other hand, in the field of remuneration it has the task of:

• - assisting the Board of Directors in developing remuneration policy;

• - draw up proposals for the Board of Directors in relation to the remuneration of Executive Directors and

  Senior Executives, in addition to the fixing of the performance targets related to the variable component of this remuneration;

• - making proposals to the Board of Directors regarding the revision of the remuneration policy where, for example, the criteria adopted for the remuneration of Executive Directors are no longer current and sufficiently incentive-based;

• - monitoring the application of the decisions of the Board of Directors concerning the remuneration policy and actual achievement of performance targets; and

• - periodically evaluating the adequacy, the overall compliance and the application of the remuneration policy, including the criteria adopted, of Executive Directors and Senior Executives, also using information provided by the Chief Executive Officers, and drawing up for the Board of Directors general recommendations in this regard.

In the carrying out of its functions, the Appointments and Remuneration Committee has full access to the information and to the corporate functions necessary for the carrying out of its remit and does not require the use of external consultants, as availing of the support of internal structures.

In 2023 the Appointments and Remuneration Committee met on three occasions and the relative minutes were duly kept.

3.

Policies and objectives

The Company's remuneration policy reflects the criteria set out in the CFA and the Issuers' Regulation. It is largely in line with the policy approved by the Shareholders' Meeting on May 4, 2023. Specifically:

i. it contributes to the Company's strategy, since a considerable part of the remuneration of relevant company figures, and in particular Executives, is variable and linked to the achievement of specific annual targets (MBO), both in terms of the Company's financial performance and personal performance. This type of compensation represents between 30% and 40% of total remuneration. For Senior Executives, this MBO system is linked to Group performance targets, while for others it is based on the targets of the company in which they work.

Economic-financial performance targets represent between 30% and 50% of the incentive pay for relevant non-executive figures (middle managers and office staff), and 80% for Executives, while, therefore, personal targets vary between 20% and 70%. This wide scale is justified by the need to more accurately align incentives with each role. This considers, above all, the ability of the role to directly affect the Company's financial-economic performance, prioritising this over other areas which, while important for corporate improvement, may not have an immediate effect on results.

These targets are formally set at the beginning of each financial year and are regularly monitored and recorded at the end of the period, determining whether or not they have been achieved, and consequently their effect on variable remuneration.

Of the aforementioned targets, those concerning the Company's economic-financial performance are specifically linked to turnover, EBIT and ROI; those of a personal nature, on the other hand, are determined on a case-by-case basis in relation to the specific role and/or position held by the individual. To ensure the achievement of strategic targets, therefore, personal targets relate to the successful implementation of new plants, improvements in industrial performance, commercial development of new areas and customers, and streamlining organisational structure. They also include, in general, the continuous improvement in elements of company production, the successful implementation of specific company projects of a strategic nature, the optimisation of the financial structure, and the improvement of company performance on key sustainability issues.

Zignago Vetro regularly draws up its strategic plan: the latest version was approved at the meeting of the Board of Directors held on June 21, 2022.

The resulting remuneration policy for the aforementioned corporate figures is fully consistent with the targets set out in the aforementioned document;

ii. it contributes to the pursuit of long-term interests, since medium- to long-term strategic

development plans play a role in determining subsequent annual budgets, which give rise to a significant portion of the company and personnel performance targets set annually. For Executive Directors and Senior Executives, moreover, a large portion of incentive remuneration is not paid annually, but is instead linked to the achievement of precise medium- to long-term targets, specifically linked to growth in the Group's results and the value generated for shareholders. In continuity with the past, the Shareholders' Meeting held on July 28, 2022 approved a new medium-to-long term incentive plan, reserved for the Company's Chief Executive Officer and Senior Executives based on the free grant of rights to receive (again free of charge) shares of the Company called "2022-2024 Performance Shares Plan" subject to the achievement of specific economic and sustainability targets.

This part of the remuneration policy, therefore, has been specifically designed and set out to ensure maximum possible focus on achieving the medium- to long-term targets set by the Board of Directors;

iii. it contributes to the Company's sustainability, since part of the incentive pay for key company figures is linked to improvement in production and other sustainability issues. For all Group Executives, a significant portion of incentive pay has been linked to the continuous improvement of the Group's sustainability profile. In this regard, part of the short and medium-long-term variable remuneration is subject to the achievement of specific targets represented by the formal sustainability assessments assigned to the Group by specific rating companies (e.g. Ecovadis, Sustainalytics, Gaja etc.).

iv. it is determined taking into account the remuneration and working conditions of the Company's employees. Specifically, it takes appropriate account of the responsibilities involved, the complexity of the tasks carried out and the degree of professionalism required to adequately perform the role.

v. it stipulates that all Directors are entitled to remuneration determined upon their appointment by the Shareholders' Meeting. This establishes the gross amount due to each individual Director for the duration of the term of office. This gross annual remuneration is not based on the achievement of financial targets but on the commitment required of each Director in their respective roles;

vi. it stipulates that, in addition to the fixed compensation due to them as members of the Board of Directors and which is determined upon their appointment, Senior Directors are also entitled to further compensation comprising both fixed and variable components. These are appropriately balanced on the basis of the Company's strategic targets and the risk management policy, and take into account the sector in which the Issuer operates.

 The fixed component of this remuneration (whose quantification criteria are proposed by the Appointments and Remuneration Committee) should sufficiently remunerate the beneficiary in line with the level of their professional service where the variable component is not paid because the performance targets indicated by the Board of Directors are not met.

 The variable component is intended as an incentive, and consists of a payment based on the achievement of short-term and medium- to long-term financial and non-financial performance targets. The former include both quantitative economic and financial indicators concerning the Group, including turnover, EBIT and ROI, and other parameters, including non-quantitative ones.

Specifically, the short-term variable component (which for the new Chief Executive Officer is based on a reference annual, effective from 1 January 2024, value of Euro 150,000) is structured as follows: approximately 80% linked to quantitative economic and financial Group indicators.

This component is broken down as follows:

•  25% upon achievement of budgeted revenue;

•  30% upon achievement of budgeted EBIT;

•  25% upon achievement of budgeted ROI.

In case of results that are higher or lower than those set out in the Budget, a linear adjustment is made to the amount to be paid, rising to 150% of the base amount and potentially falling to zero.

- around 20% is linked to other parameters, including non-financial and personal ones. These include, for example, improvements in industrial performance, commercial development of new areas and customers, streamlining the organisational structure in general, the successful installation of new plants, continuous improvement in elements of company production, the successful implementation of specific company projects of a strategic nature, optimisation of the financial structure, and the pursuit of sustainability (ESG) targets.

- As regards short-term variable remuneration, the Appointments and Remuneration Committee proposed the formulas for the calculation of the variable portion of remuneration (MBO), to be allocated to the Executive Directors, setting out the respective allocation ratios and verifying the correct application of these remuneration ratios with regards to the results achieved in 2023.

The following tables presents the breakdown of the new Chief Executive Officer's annual remuneration package, presenting the characteristics and weight of the fixed, short-term variable, and long-term variable components.

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As regards the medium- to long-term variable component, the new 2022-2024 Performance Shares Plan

1 The overall number of rights to receive shares includes an additional assignment compared to what has already been assigned previously as DRS, calculated pro-rata for the year 2024 equal to 9,000 rights.

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Zignago Vetro S.p.A. published this content on 29 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2024 16:45:03 UTC.