Incentive system

Enel’s remuneration policy for 2019, which was adopted by the Board of Directors acting on a proposal of the Nomination and Compensation Committee and received considerable approval from the shareholders on the occasion of the Shareholders’ Meeting of May 16, 2019, was formulated on the basis of national and international best practice, the guidance provided by the favorable vote of the Shareholders’ Meeting of May 24, 2018 on the remuneration policy for 2018 as well as the results of the engagement activity on corporate governance issues pursued by the Company between December 2018 and February 2019 with the leading proxy advisors and Enel’s institutional investors. In line with the recommendations of the Corporate Governance Code for listed companies, Enel’s remuneration policy for 2019 is designed to attract, motivate and retain personnel possessing the professional skills most suitable to successfully managing the Company, incentivizing achievement of our strategic objectives and ensuring sustainable growth. It is also structured so as to align the interests of management with the priority objective of creating sustainable value for shareholders in the medium/long term and promoting the Enel mission and our corporate values.

The 2019 remuneration policy adopted for the Chief Executive Officer and General Manager and key management personnel envisages:

  • a fixed component;
  • a short-term variable component (MBO) that will be paid out on the basis of achievement of specific performance objectives. Namely:
    • for the CEO, short-term objectives have been set for the following components:
      • consolidated net ordinary income;
      • funds from operations/consolidated net financial debt;
      • group opex;
      • workplace safety;
    • for key management personnel, objective annual goals connected with their business area have been set, differentiated by the functions and responsibilities assigned to them;
  • a long-term variable component linked to participation in specific long-term incentive plans. In particular, for 2019 long-term variable remuneration is linked to participation in the Long-Term Incentive Plan 2019 (“2019 LTI Plan”), which establishes three-year performance targets for the following:
    • Enel’s average TSR (Total Shareholder Return) compared with the average TSR for the EUROSTOXX Utilities - EMU index for the 2019-2021 period;
    • ROACE (Return on Average Capital Employed), cumulative for 2019-2021;
    • CO2 emissions of Enel Group generation plants in 2021.

The 2019 LTI Plan establishes that any bonus accrued is represented by an equity component, which can be supplemented – depending on the level of achievement of the various targets – by a cash component. More specifically, the Plan envisages that 100% of the basic bonus of the Chief Executive Officer and General Manager and 50% of the basic bonus of key management personnel will be paid in Enel shares previously acquired by the Company.
The disbursement of a significant portion of long-term variable remuneration (70% of the total) is deferred to the second year following the three-year performance period covered by the 2019 LTI Plan.
The establishment of a target in the 2019 LTI Plan for CO2 emissions (grams per kWh equivalent produced by the Group in 2021) and a target in the short-term variable remuneration system of the Chief Executive Officer and General Manager linked to workplace safety is designed to promote the implementation of a sustainable business model. A detailed description of the remuneration policy for 2019 and of remuneration paid in 2018 is provided in Enel’s 2019 Remuneration Report available on the Company’s website (


Long-Term Incentive (LTI) Plan

(1)If performance targets are achieved.


Enel share-based incentive plan

On May 16, 2019, the Ordinary Shareholders’ Meeting of Enel SpA (“Enel” or the “Company”) approved the Long- Term Incentive Plan for 2019 (“2019 LTI Plan” or “Plan”) for the management of Enel and/or its subsidiaries pursuant to Article 2359 of the Italian Civil Code, granting the Board of Directors all the necessary powers to implement the Plan.
The beneficiaries of the Plan – whose characteristics are described in detail in the information document prepared pursuant to Article 84-bis of the CONSOB Regulation issued with Resolution no. 11971 of May 14, 1999, which is available to the public in the section of Enel’s website ( dedicated to the Shareholders’ Meeting of May 16, 2019 – are the Chief Executive Officer/General Manager of Enel and the managers of the Enel Group who occupy key positions directly responsible for corporate performance or considered of strategic interest. It provides for the award to the beneficiaries of an incentive consisting of a stock component and a cash component.
This incentive – determined, at the time of the award, on a base value calculated in relation to the fixed remuneration of the individual beneficiary – may vary depending on the degree of achievement of each of the three-year performance targets by the Plan, ranging from zero up to a maximum of 280% or 180% of the base value in the case, respectively, of the Chief Executive Officer/General Manager or the other beneficiaries. The 2019 LTI Plan also provides that, of the total incentive effectively vested, the bonus will be fully paid in shares in the amount of (i) up to 100% of the base value for the Chief Executive Officer/General Manager and (ii) up to 50% of the base value for the other beneficiaries.
The actual award of the bonus under the 2019 LTI Plan is subject to the achievement of specific performance targets during the 2019-2021 period (the so-called performance period). If these targets are achieved – and depending on the level of achievement – 30% of the stock and cash components of the incentive will be paid to the beneficiaries in 2022 and the remaining 70% in 2023.
In accordance with the resolution of the Board of Directors of September 19, 2019 – which in implementation of the authorization granted by the Shareholders’ Meeting of May 16, 2019 and in compliance with the related terms, approved the start of a share buyback program to support the 2019 LTI Plan in the maximum amount of €10.5 million and a maximum number of 2.5 million shares – between September 23, 2019 and December 2, 2019, the Company purchased a total of 1,549,152 treasury shares (equal to about 0.015% of share capital) at a weighted average price of €6.7779 per share with a total value of €10,499,998.93. In granting the shares under the Plan, 1,538,547 shares were awarded, although actual disbursement to the beneficiaries remains subordinate to the level of achievement of the performance targets.
The cost of the Plan is determined with reference to the fair value of the equity instruments assigned during the year and is recognized over the duration of the vesting period in equity reserves. Considering the market price of the Enel share on the grant date (i.e., November 12, 2019), equal to €6.983, the fair value of the equity instruments on that date, taking account of the number of shares granted, is equal to €10,743,674.
The fair value of the financial instruments pertaining to the year, determined on the basis of the market price of the stock at the end of the period, is equal to €350,987.

Read more: