2017 remuneration report - saipem · remuneration report letter from the chairman of the...

2017Remuneration Report

Approved by the Board of Directors

on March 16, 2017

MissionWe approach each challenge with innovative, reliable and secure solutions to meet the needs of our clients. Throughmulticultural working groups we are able to provide sustainable development for our company and for thecommunities in which we operate.

ValuesInnovation; health, safety and environment; multiculturalism; passion; integrity.

Countries in which Saipem operatesEUROPEAustria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Italy, Luxembourg, Malta, Netherlands, Norway, Poland,Portugal, Principality of Monaco, Romania, Spain, Sweden, Switzerland, Turkey, United Kingdom

AMERICASArgentina, Bolivia, Brazil, Canada, Chile, Colombia, Ecuador, Mexico, Panama, Peru, Suriname, United States,Venezuela

CISAzerbaijan, Georgia, Kazakhstan, Russia, Turkmenistan, Ukraine

AFRICAAlgeria, Angola, Congo, Egypt, Gabon, Ghana, Ivory Coast, Libya, Morocco, Mozambique, Namibia, Nigeria, Uganda

MIDDLE EASTIraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

FAR EAST AND OCEANIAAustralia, China, India, Indonesia, Malaysia, Singapore, South Korea, Taiwan, Thailand

2017Remuneration Report

Letter from the Chairman of the Compensation and Nomination Committee 2Foreword 3Overview 4

2017 Remuneration Policy 42016 Remuneration Report (Section I) - Results of vote at Shareholders’ Meeting 5Pay-mix 6

Section I - 2017 Remuneration Policy 8Governance of the remuneration process 8

Bodies and persons involved 8Saipem Compensation and Nomination Committee 82017 Remuneration Policy approval process 11

Aims and general principles of the Remuneration Policy 11Aims 11General principles 11

2017 Remuneration Policy Guidelines 13Chairman of the Board of Directors and non-executive Directors 14CEO 14Senior Managers with strategic responsibilities 18

Section II - Remuneration and other information 21Implementation of 2016 remuneration policies 21

Fixed remuneration 21Remuneration for service on Board Committees 21Variable incentives 21Indemnities for termination of office or termination or employment 23Benefits 23Payment against the Board of Directors’ option for implementation of the non-competition agreement 23

Remuneration paid in 2016 24Table 1 - Compensation paid to Directors, Statutory Auditors 24and Senior Managers with strategic responsibilitiesTable 3A - Incentive plans based on financial instruments other than stock options payable to Directors 26and to Senior Managers with strategic responsibilitiesTable 3B - Monetary Incentive Plan for Directors and Senior Managers with strategic responsibilities 27

Shares held 28Table 4 - Shares held by Directors and Senior Managers with strategic responsibilities 28

Annex pursuant to Article 84-bis of the Consob Issuers Regulation 28- Implementation for 2016 of the share-based Long-Term Incentive Plan 2016-2018

Table 1 of scheme 7 from Annex 3A of Regulation No. 11971/1999 28

The Report is published in the ‘Governance’ section of Saipem’s website (www.saipem.com)

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Dear Shareholders,

I am very pleased to present Saipem’sRemuneration Report for 2017 also on behalfof the Remuneration and NominationCommittee and the Board of Directors.Saipem’s distinctive values are innovation,sustainability, integrity and multiculturalism.These are represented by a team of peoplewho unite passion with work, ensuring fairnessand transparency in all spheres of activity,including through a control and monitoringsystem that embraces the highestinternational standards and guidelines.The Saipem Remuneration Policy is thefundamental tool to attract, retain andmotivate people who reflect these highstandards and principles. Here in Saipem, weconsider human capital our main competitivevalue. The Committee proposes to orient itsdecisions in line with the Company’s strategicand operational requirements.In line with the past year we consider theconstant and transparent dialogue withshareholders and investors a key element ofour way of working. Through theRemuneration Report, we intend to raise theawareness of our shareholders on theprinciples of the remuneration policy and theprogrammes through which it is structuredand how these programmes have the ultimategoal of creating sustainable shareholder valueover the long term and to promote thecompany’s mission and values.The results of the shareholders voting on thefirst section of the 2016 RemunerationReport, fully analysed by the Committee,confirmed a growing appreciation of theplanned policies. Pursuing continuousimprovement, this Remuneration Reportshows greater clarity, synthesis and effectivedisclosure, including new schematic elementsand graphics, oriented towards increasedtransparency.During 2016, the Committee discussed andapproved the Regulations implementing thegeneral principle of clawback in order to followthe recommendations made in the CorporateGovernance Code for listed companies in July2015 and to define the terms, procedures,roles and corporate functions involved in theapplication of the clause inserted in the

incentive plans, short and long term, of theentire management.2016 saw the completion of the activitiesincluded in the annual programme and thelaunch of preliminary investigations aimed atdefining the following: the proposed 2017Remuneration Policy, the voting policies forthe main proxy advisors and institutionalinvestors and reference salary benchmarks,the assessments of the implementation of the2016 Remuneration Policy, as required by theCorporate Governance Code. The constantdialogue with shareholders and investorsallows us in fact to improve the effectivenessof our remuneration systems.Additionally, in 2016 the new medium- tolong-term incentive system was implementedfor the first time and is based on sharesapproved by the Shareholders April 29, 2016.Proposals for 2017 Remuneration PolicyGuidelines, approved by the Board ofDirectors on March 16, 2017 and described inSection I of this Report, do not showsubstantial changes compared to theRemuneration Policy implemented in 2016because we strongly believe that a coherentand consistent remuneration policy ensuresbusiness continuity to the Company.

Special thanks to Directors FedericoFerro-Luzzi and Francesco Antonio Ferruccifor their significant contribution to the work ofthe Committee together with a heartfeltappreciation for the role played by thestructures of Saipem and its people.Confident that this Report that I submit givestestimony to the Committee’s determinationto pursue an effective and transparentdialogue with shareholders and investors, withthe goal of receiving guidance and feedbackand maximising consensus on policiespresented at the annual meeting, I also thankyou, on behalf of the other members of theCommittee, for the support you will give topolicies planned for 2017.

March 16, 2017

The Chairman of the Compensationand Nomination Committee

Letter from the Chairman of theCompensation and Nomination Committee

SAIPEM Remuneration Report / Letter from the Chairman of the Compensation and Nomination Committee

Maria Elena Cappello

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The Saipem Remuneration Policy wasapproved by the Board of Directors on March16, 2017 on the proposal of theCompensation and Nomination Committee,made up entirely of non-executive andindependent Directors, and was defined inaccordance with the Governance modeladopted by the Company and with theguidance on remuneration of the CorporateGovernance Code for listed companiespromoted by Borsa Italiana (subsequently the‘Corporate Governance Code’), which Saipemcomplies with, in the latest version approvedin July 20151.In keeping with the guidelines set out in theCompany’s Strategic Plan, this policypromotes alignment of the interests ofmanagement with the priority objective of

value creation for the Company’sshareholders in the medium to long term.This Report was prepared, in compliance withcurrent regulatory and legislative obligations2,in consideration of analysis and furtherresearch regarding the results of shareholdervoting, feedback received from shareholdersand the primary proxy advisers on the 2016Saipem Report, as well as the results of theengagement activities with the proxy advisorsand market practices of leading listedcompanies.The Compensation and NominationCommittee also took account of the relevantlegislative and corporate governanceframework, with the aim of assuring thebroadest clarity, completeness and usabilityof the information provided.

Foreword

SAIPEM Remuneration Report / Foreword

(1) For additional information on the terms of Saipem’s adoption of the Corporate Governance Code, see the section ‘Governance’ on the Companywebsite (http://www.saipem.com) and the document ‘Corporate Governance and Shareholding Structure Report 2016’.(2) Article 123-ter of Legislative Decree No. 58/1998 and Article 84-quater of the Consob Issuers Regulation (No. 11971 as amended).

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This 2017 Remuneration Report defines andillustrates the following:- in Section I, the Policy adopted by Saipem

SpA (‘Saipem’ or the ‘Company’) for 2017for the remuneration of Company Directorsand Senior Managers with strategicresponsibilities3, indicating the general aimspursued, the bodies involved and theprocedures applied for the adoption andimplementation of the Policy. The generalprinciples and the Guidelines defined in thefirst section of this Report are also appliedfor the purposes of determining theremuneration policies of companies directlyor indirectly controlled by Saipem;

- in Section II, the remuneration paid in 2016to the Directors, Statutory Auditors andSenior Managers with strategicresponsibilities of Saipem.

The two sections of the Report are precededby a summary of the main information in orderto supply the market and investors with aneasy-to-read framework for understandingthe key elements of the 2017 Policy.Lastly, the Report illustrates the shares heldby Saipem Directors, Auditors and SeniorManagers with strategic responsibilities andcontains information regarding theimplementation of the 2016 share-basedLong-Term Incentive Plan envisaged in linewith current rules4.The Report was submitted to Borsa Italianaand was made available to the public at theCompany’s registered office and posted inthe ‘Governance’ section of Saipem’s websitetwenty-one days before the Shareholders’Meeting called to approve the 2016 FinancialStatements and to pass a non-bindingresolution in favour or against Section I of theReport, in accordance with the applicablelegislation5.Information related to financialinstrument-based remuneration planscurrently in force is available in the‘Governance’ section of Saipem’s website6.

2017 Remuneration Policy

The Saipem Remuneration Policy, illustrated indetail in the first section of this Report, has theaim of (i) attracting, motivating and retaining

high profile professional and managementpersonnel; (ii) providing incentives for theachievement of strategic objectives andsustainable growth of the business;(iii) aligning the interests of management withthe priority objective of creating sustainablevalue for shareholders in the long term; and(iv) promoting the company mission andvalues.

The Saipem Board of Directors was appointedby the Shareholders’ Meeting on April 30,2015, for a term of three years. The Board’sterm of office thus expires on the date of theShareholders’ Meeting called to approve thefinancial statements as at and for the yearended December 31, 2017.The 2017 Remuneration Policy, illustrated indetail in Section I of this Report, prescribesthe following:- for non-executive Directors, the 2017

Remuneration Policy Guidelines reflect theresolutions taken by the Board of Directorson May 25, 2015 and do not envisage anychanges with respect to the Policyapproved in the previous year;

- for non-executive Directors who will bemembers of Board Committees, the 2017Remuneration Policy Guidelines envisagethe definition of remunerationcommensurate with the complexity of therole and the commitment required in linewith market benchmarks, reflect theresolution taken by the Board of Directorson June 15, 2015 and do not envisage anychanges with respect to the Policyapproved in the previous year;

- for the Chairman, the 2017 RemunerationPolicy Guidelines envisage the maintenanceof the same remuneration approved by theBoard of Directors on June 15, 2015 in linewith market benchmarks;

- for the CEO, the 2017 Remuneration PolicyGuidelines envisage the maintenance of thesame remuneration approved by the Boardof Directors on June 15, 2015, in line withmarket benchmarks. Variable remunerationis also envisaged to reward performancetargets achieved over an annual timehorizon, associated with the targets set forthe previous year plus Long-TermIncentives (LTI) consistently with the

Overview

SAIPEM Remuneration Report / Overview

(3) The term ‘Senior Managers with strategic responsibilities’, as defined in Article 65, paragraph 1-quater of the Consob Issuers Regulation, refers to personswith direct or indirect planning, coordination and control responsibilities. Senior Managers with strategic responsibilities of Saipem, other than Directors andStatutory Auditors, are defined as those Senior Managers serving on the Advisory Committee and, at any rate, who are direct reports of the CEO.(4) Article 114-bis of the Consolidated Finance Act and Article 84-bis of the Consob Issuers Regulation.(5) Article 123-ter, paragraph 6 of Legislative Decree No. 58/1998.(6) Website: http://www.saipem.com/sites/SAIPEM_it_IT/area/GOVERNANCE-saipem-governance.page


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resolution taken by the Board of Directorson June 15, 2015 and June 27, 2016;

- for Senior Managers with strategicresponsibilities, the 2017 Guidelinesenvisage the same payment instruments asdefined in 2016.

The table at the following page (‘2017Remuneration Policy’) describes the mainelements of the 2017 Guidelines resolved forremuneration of the CEO and SeniorManagers with strategic responsibilities(SMSR).

2016 Remuneration Report(Section I) - Results of voteat Shareholders’ Meeting

The Shareholders’ Meeting of April 29, 2016,according to the provisions of currentregulations (Article 123-ter (6) of LegislativeDecree No. 58/1998), expressed aconsultative vote on Section 1 of the 2016Remuneration Report, by a favourable vote of98.6% of participants. There has been aprogressive reduction of votes against since2012.

Results of voting

79.66%

19.40%

92.02%

96.36% 97.95% 98.60%

0.27% 0.20% 0.70%

2.70% 0.90%

7.71%

1.35% 0.94% 1.20%

2013

2014

2015

2016

2012

F0r against abstain


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Pay-mix

The 2017 Remuneration Policy Guidelines setpay-mixes in line with managerial roles, with agreater weight given to the variablecomponent (in particular the long-termcomponent) for positions that have a greaterinfluence on company results, as shown in thepay-mix chart shown below, which wascalculated considering minimum andmaximum result level payouts for short andlong-term incentives.

2017 remuneration policy

Component

Fixed

remuneration

Annual

variable

incentives

Long-Term

Incentive

shared based

(2016-2018 Plan)

Benefits

Severance

Payment

and Minimum

Term

Agreement

Aimsand characteristics

Values skills, experience

and the contribution

demanded by the role

assigned.

Promote the achievement

of annual budget

objectives.

All managerial resources

are included in the Plan.

Promote the alignment of

management with the

interests of shareholders

and the sustainability of

value creation in the long

term.

All managerial resources

are included in the Plan.

These supplement the

compensation package in a

logic of total reward

through benefits in kind,

mainly of a health and

social security nature.

Recipients: all managerial

resources.

Severance pay to protect

the company from

potential competition risks.

Retention and protection

tools for the Group’s

know-how.

Conditions for implementation

Benchmarking of manager compensation consistent to Saipem

characteristics and assigned roles.

2017 CEO objectives: Free Cash Flow - weight 35%; Adjusted EBITDA

- weight 30%; Fit For the Future - weight 25%’ HSE and Sustainability

- weight 10%.

SMSR objectives: broken down on the basis of objectives assigned to

top management, in relation to the area of responsibility for the role

covered.

Incentives paid based on the results achieved in the previous year

and evaluated on a performance scale of 70 to 130 points1 with

minimum threshold to receive the incentive set at 85 points for

individual performance.

Award: free allocation of ordinary Saipem SpA shares for the

achievement of performance conditions, differentiated by

management role.

Performance conditions: TSR (weight 50%) measured at the end of

the three-year period in terms of positioning in relation to a peer

group. Net Financial Position (weight 50%) measured in terms of the

three-year period in question.

Three-year vesting period + lock-up period of 2 years for the Chief

Executive Officer-CEO.

Three-year vesting period + Co-investment of a further 2 years for

strategic resources only.

Conditions set out in the national collective bargaining contract and

in supplementary company agreements applicable to resources with

managerial qualifications.

CEO: early termination indemnities: early termination of the current

mandate, excluding dismissal for just cause, and resignation not

caused by essential reduction of mandates; non-competition

agreement: activated at the discretion of the Board through option

rights2, provides a non-compete obligation for the period of one year

after termination of the mandate.

SMSR: severance pay: agreed to upon consensual termination of

employment; severance payment: cases of change of control which

result in termination of employment due to resignation or dismissal

and/or demotion; non-competition agreements: activated upon

termination of the employment relationship.

Minimum Term Agreement to protect know-how .

Amount

CEO: €900,000 per year.

SMSR: compensation determined on the basis

of the role assigned with possible adjustments

in relation to competitive positioning targets

(average market values).

CEO: target incentive level corresponding to

60% of fixed remuneration (minimum 51% and

maximum 78%).

SMSR: target incentive levels differentiated

based on the role assigned, up to a maximum of

40% of fixed remuneration.

CEO: maximum incentive level equal to 153% of

fixed remuneration, unchanged compared to

that provided by previous plans.

SMSR: maximum differentiated incentive level

for the management role up to a maximum of

100% of fixed remuneration, unchanged

compared to that provided by previous plans, in

addition to a further 25% in equities at the end

of the Co-investment period (Share Retention).

The maximum value at the end of the vesting

period shall not exceed four times the value of

the shares at the moment of their allocation.

- Supplementary pension;

- Supplementary healthcare;

- Supplementary death and disability insurance

coverage;

- Company car for business and personal use.

CEO: early termination indemnities: amounts to

€1,800,000; non-competition agreement:

amounts to 1,800,000.

SMSR: severance pay: established by the

collective labour agreement and internal

policies. Accessory instruments: severance

payment: maximum of two years’ fixed

remuneration; non-competition agreement: 12

months’ pay for every year of the agreement;

Minimum Term Agreement: 12 months’ pay for

every year of the clause.

(1) Below the minimum threshold (70 points) the performance is considered equal to zero.

(2) Provided for under the non-compete option reserved to the Board of Directors is a sum of €450,000.

Pay-mix CEO (*)

47%

24%

27%

35%

29%38%

Long-term variablecomponent

Short-term variablecomponent

Fixed remuneration

Min Max

(*) Pay-mixes shown above do not take in consideration fluctuation of share price.


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Page

Pages 14-15;

17-18

Pages 15; 17-18

Pages 15, 18

Pages 17, 20

Pages 17, 19

Risk mitigation factors

Adjustments are in line with market references from internationally recognised providers.

Forecasts of different performance goals, predetermined, measurable and complementary,

indicative of the company’s annual performance, which is itself a condition of payout of the individual

incentive.

Existence of the maximum established incentive levels.

Existence of a clawback mechanism that allows for the return of variable components of

remuneration in cases of manifestly incorrect or maliciously altered data and violation of laws and

regulations, the Code of Ethics or industry regulations.

Forecasts of two performance targets, predetermined, measurable ex post at the end of the three

years, and complementary, indicative of the company’s performance, and the ability of the latter to

pursue economic and financial performance in the medium-long term and generate share

performance levels, as well as creating value higher than those of major international competitors,

providing greater alignment to the interests of shareholders in the medium to long term.

Deferral of a significant portion of the shares matured by two years past the date of verification of

achievement of the performance target level.

Definition of a maximum value of shares definitely assignable: the maximum value at the end of the

vesting period shall not exceed four times the value of the shares at the moment of their allocation.

Existence of a clawback mechanism that allows the return of definitively allocated shares (or non-

award of deferral shares) in cases of manifestly incorrect or maliciously altered data and violation

of laws and regulations, the Code of Ethics or industry regulations.

Ex-ante determination of the maximum number of months to be paid.

Activation of the non-competition agreement for the CEO as a result of evaluation by the Board of

Directors.

Existence of penalties for violating the non-competition agreement.

Scheduling

Annual adjustments as part of the annual salary

review.

Payout in the year in which the annual objective

left was attained.

Allocation: annual.

Vesting period: three years.

Co-investment period/lock-up: additional two

years.

Subject to periodic reviews in cases of role

reassignment.

Activated upon termination of the employment

relationship.

Pay-mix senior managers with strategicresponsibilities (*)

59%

14%

21%

44%

27%35%



Fixed remuneration

Min Max

(*) Pay-mixes shown above do not take in consideration fluctuation of share price.

Pay-mix other senior managers (*)

60%

19%

11%

74%

21%15%



Fixed remuneration

Min Max

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Governanceof the remuneration process

Bodies and persons involved

The Policy on remuneration of members ofthe Saipem Board of Directors was defined in

accordance with the regulatory provisions andthe Saipem by-laws and Governance model,according to which the following boards andentities are involved: Shareholders’ Meeting,Board of Directors and Compensation andNomination Committee.

Section I - 2017 Remuneration Policy

SAIPEM Remuneration Report / Section I - 2017 Remuneration Policy

BODY ROLE AND DUTIES

Bodies and persons involved

Establishes the remuneration of the members of the Board of Directors when they are

appointed, for the whole of their term of o�ce.

Shareholders’ Meeting

Supports the Board of Directors in a consultative and advisory capacity with regard to

remuneration.

Compensation and Nomination

Committee

1. Establishes the remuneration for Directors assigned special functions (Chairman and

CEO) and for service on Board Committees, having consulted the Statutory Auditors.

2. De�nes performance targets and approves the results for performance plans used to

establish the variable remuneration of the CEO.

3. Approves the general criteria for the remuneration of Senior Managers with strategic

responsibilities.

4. De�nes the remuneration of the Internal Audit Manager in accordance with the

Company’s Remuneration policy and having consulted the Audit and Risk Committee and

the Board of Statutory Auditors.

Board of Directors

NAME ROLE

Compensation and Nomination Committee

ChairmanMaria Elena Cappello

MemberFederico Ferro-Luzzi

MemberFrancesco Antonio Ferrucci

No. meetings in 2016: 16; average duration: 2 hours and 18 minutes; average

member attendance: 98%.

Saipem Compensationand Nomination Committee

Membership and appointmentThe Compensation Committee, which as ofFebruary 13, 2012, was renamed the‘Compensation and Nomination Committee’,was established for the first time by the Boardof Directors in 1999. Committee membershipand appointments, its tasks and its operatingprocedures are regulated by a specific set ofrules, which were approved by the Board ofDirectors and published on the Companywebsite.In accordance with the recommendations setout in the new version of the CorporateGovernance Code, the Committee iscomposed of three non-executive,independent Directors. In accordance with theCorporate Governance Code (Article 6.P.3),the Regulations also require that at least onemember of the Committee has adequateknowledge and experience on financial andremuneration matters evaluated by the Boardat the time of appointment.


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With effect from April 30, 2015 the Committeehas been made up of the followingnon-executive Directors, all independentaccording to law and the Corporate GovernanceCode: Maria Elena Cappello, FedericoFerro-Luzzi, Francesco Antonio Ferrucci.The Executive Vice President of HumanResources, Organisation and Services forPersonnel, or, in his/her place, the Senior VicePresident of Corporate Human Resources,acts as Secretary of the Committee.

Role of the CommitteeThe Committee has the following proposaland consulting functions in relation to theBoard of Directors, in compliance with therecommendations contained in the CorporateGovernance Code (Article 6.P.4 and Article6.C.5):- submits to the Board of Directors’ approval

the Remuneration Report and, in particular,the Remuneration Policy of executiveDirectors, of Directors vested with particularpowers and of Senior Managers with strategicresponsibilities, as provided for by the law;

- periodically checking the adequacy, theoverall consistency and the implementationof the Policy adopted and formulatingproposals in this regard;

- makes proposals regarding the variousforms of remuneration and pay of theChairman and CEO;

- making proposals regarding thecompensation of the non-executive

Directors appointed to the Committeesformed by the Board;

- proposing general criteria for theremuneration of Senior Managers withstrategic responsibilities, annual andlong-term incentive plans, includingshare-based incentive plans and thedefinition of the performance objectives andthe approval of results of performance plansused to establish the variable remunerationof Directors vested with executive/specialpowers, taking into account the indicationsprovided in this regard by the CEO;

- monitors the implementation of resolutionstaken by the Board with regard to remuneration;

- reports to the Board of Directors every sixmonths on the work it has carried out. As partof its functions, the Committee may also beasked to provide opinions regardingtransactions with related parties in accordancewith the relevant Company procedure.

Methods of implementationThe Committee meets as often as necessaryto perform its duties, normally on the datesscheduled on the yearly calendar of meetingsapproved by the Committee itself.The Committee is quorate when at least themajority of its members in office are presentand decides with the absolute majority of thosein attendance. The Chairman of the Committeeconvenes and presides over the meetings. Tofulfil its duties, the Committee has the right toaccess the necessary Company information

Activities

January

February

March

April

May

JuneJuly

August

September

October

November

December

JANUARY - MARCH• Periodical evaluation

of the Policies adopted

in the previous year

• De�nition of the

Remuneration Policy

• Analysis of results and de�nition

of objectives for variable

incentive plans

• Preparation of Remuneration

Report

OCTOBER - DECEMBER • Monitoring of regulatory framework

development and voting policies

APRIL - JUNE • Presentation

of the Remuneration Report

to the Shareholders’ Meeting

JULY - SEPTEMBER• Implementation of the Long-Term

Incentive Plan (LTI)

• Analysis of results of voting

on the Remuneration Policy

at Shareholders’ Meetings


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and departments and to avail of externaladvisors who do not find themselves insituations that could compromise theimpartiality of their opinion, within the limits ofthe budget approved by the Board of Directors.On a yearly basis, the Committee drafts abudget that it submits to the Board of Directorssimultaneously with the annual report.The Chairman of the Board of Statutory Auditors,or a Statutory Auditor designated by theChairman, attends Committee meetings.Furthermore, other Statutory Auditors may alsoparticipate when the Board is dealing with mattersfor which the Board of Directors is obliged in itsresolution to take account of the opinion of theBoard of Statutory Auditors. At the request of theCommittee Chairman, other persons may alsoparticipate in order to provide information andmake assessments within their field ofcompetence in relation to individual agenda items.No executive Director can take part inCommittee meetings where proposals arebeing made to the Board of Directorsconcerning his/her remuneration.

Activities of the Compensationand Nomination CommitteeThe Compensation and NominationCommittee carries out its activities accordingto an annual programme which consists of thefollowing phases:- periodically checking the adequacy, the

overall consistency and the implementationof the Policy adopted in the previous year in

relation to the results achieved and thecompensation/benchmarks supplied byspecialised providers;

- definition of Policy proposals for thefollowing year and of proposals regardingthe performance targets connected withshort and long-term incentive plans;

- definition of proposals regarding theimplementation of the short and long-termvariable incentive plans in place, based onan analysis of the results achieved and theperformance objectives set under the plans;

- preparation of the Remuneration Report tobe submitted to the Shareholders’ Meetingsubject to the approval of the Board ofDirectors;

- examination of the results of voting at theShareholders’ Meeting of the Policyapproved by the Board;

- monitoring of the development of theregulatory framework and the votingpolicies of the leading proxy advisers, aspart of the preliminary investigationsenvisaged to support Policy proposals forthe following year.

Activities carried out and plannedIn 2016, the Compensation Committee (in itsprevious and current mandates) convened ona total of sixteen occasions, with a memberattendance of 98%.As regards the single remuneration issues, theCommittee focused its activities on thefollowing topics in particular.

Main issues covered in 2016

Month Subjects

January 1. Formulation of Saipem 2016 indicators for the 2016 Short-Term Incentive Plan.

2. Remuneration Policy: evaluation of 2015 implementation and proposal for 2016.

3. Definition of the metrics of the New Management Incentive System.

February 1. New Management Incentive System: new system and Consob Information document.

March 1. Review of Saipem 2015 results and definition of 2016 performance objectives for long term plans.

2. Remuneration package of the CEO.

3. Analysis of 2016 Remuneration Report (Sections I and II).

April 1. Preparation of the 2016 Shareholders’ Meeting.

May 1. Proposal for amendement of CEO contract.

June 1. Evaluation of the proposal for appointment and remuneration of the Manager responsible for drafting the Company

Accounting Reports.

2. Long-Term Incentive Plan - Approval of the 2016 Allocation Rules.

3. Proposal for amendement of CEO contract.

4. Clawback clauses - Approval of Implementation Regulations.

July 1. Review of 2015 results in relation to the Long-Term Monetary Incentive Plan for critical managerial resources.

2. 2016-2018 Long-Term Incentive Plan: 2016 allocation for CEO and calculation of number of shares to be allocated.

3. Remuneration positioning of the Internal Audit Manager.

September 1. Evaluation of remuneration proposal of members of Audit & Compliance Committee for Cluster A Companies.

2. Analysis of the voting results of the 2016 Shareholders’ Meeting season.

November 1. Proposed Saipem 2017 indicators for short and long-term incentive plans.

2. Approval of the 2017 Budget of the Compensation and Nomination Committee.


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The Committee plans to hold at least 9meetings in 2017. At the date of approval ofthis Report, the first 5 meetings had beenheld, specifically covering: (i) evaluation of theremuneration policies implemented in 2016for defining policy proposals for 2017;(ii) review of the 2016 results and definition of2017 performance objectives associated withvariable incentive plans; (iii) variableremuneration of the CEO and SeniorManagers with strategic responsibilities;(iv) the 2017 Remuneration Report (Sections Iand II).The Committee reports through its Chairmanto the Board of Directors on a half-yearlybasis, as well as to the Shareholders’ Meetingconvened to approve the annual financialstatements, on the performance of its duties,in accordance with its own Committee rules,with the recommendations of the CorporateGovernance Code and with the aim ofestablishing a channel for dialogue withshareholders and investors.

2017 Remuneration Policyapproval process

In conducting its assigned tasks theCommittee defined the structure and contentof the Remuneration Policy for the purposesof preparing this Report, specifically at themeetings of February 23 and March 9, 2017,consistently with the more recentrecommendations of the CorporateGovernance Code.In reaching its conclusions, the Committeetook account of the results of periodicalassessment of adequacy, overall consistencyand concrete application of the PolicyGuidelines for 2016, as well as the resolutionspassed by the relevant Company bodies inrelation to remuneration.The Saipem 2017 Remuneration Policy for theCEO and other Senior Managers withstrategic responsibilities was approved by theBoard of Directors on March 16, 2017 at theproposal of the Compensation andNomination Committee, together with thisReport.For the purposes of preparing this Report, theCommittee used remuneration benchmarksdeveloped by international independentconsulting firms for the preliminaryinvestigations aimed at preparing theproposals for the 2017 Remuneration Policy.Implementation of the remuneration policiesdefined in accordance with the guidelinesprovided by the Board of Directors is done bythe competent company bodies, with thesupport of the relevant company functions.

Aims and general principlesof the Remuneration Policy

Aims

The Saipem Remuneration Policy is defined inaccordance with the Governance modeladopted by the Company and therecommendations included in the CorporateGovernance Code, with the aim of attractingand retaining highly skilled professional andmanagerial resources and aligning theinterests of management with the priorityobjective of value creation for shareholders inthe medium to long term.The Saipem Remuneration Policy contributesto the achievement of the Company’s missionand strategies by:- promoting actions and conduct consistent

with the Company’s values and culture(integrity, innovation, sustainability) and withthe principles of diversity, equalopportunities, the maximisation andleveraging of knowledge and skills ofpersonnel, fairness, and non-discriminationas outlined in the Code of Ethics and theLeadership Model;

- recognising and rewarding responsibilitiesassigned, the results achieved and thequality of the professional contributionmade, taking into account the specificcontext and remuneration benchmarks;

- definition of performance-based incentivesystems linked to the attainment of a seriesof financial/profit, business developmentand operating targets set with a view toachieving sustainable growth in line with theCompany’s Strategic Plan and withresponsibilities assigned.

General principles

In line with the above aims, the remunerationpaid to the Directors and the Senior Managerswith strategic responsibilities is defined inaccordance with the following principles andcriteria.

Remuneration of non-executive DirectorsRemuneration of non-executive Directorscommensurate with the commitment requiredfor participating in Board Committeesestablished according to the By-laws, withdifferentiation between the remunerationprescribed for the Chairman compared to themembers of each committee, in considerationof the role of coordination of business andconnection with the corporate boards andbusiness functions.Unless otherwise resolved by theShareholders’ Meeting, non-executiveDirectors are excluded from variable incentiveschemes, including share-based incentiveplans.


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Remuneration of the CEOand the Senior Managerswith strategic responsibilitiesRemuneration structure for the CEO and theSenior Managers with strategicresponsibilities, an adequately balanced mix ofa fixed component commensurate withpowers and/or responsibilities assigned and avariable component with a maximum limitdesigned to link remuneration to effectivelyachieved targets.

Consistency with market benchmarksOverall consistency of remunerationcompared with applicable marketbenchmarks for similar positions or roles of asimilar level of responsibility and complexitywithin a panel of companies comparable withSaipem, using specific benchmarks createdwith the support of internationally recognisedproviders.

Variable remunerationVariable remuneration of executive rolesstrongly influencing Company results,characterised by a significant incidence oflong-term incentive components through anadequate differentiation of incentives in a timeframe of at least three years, in accordancewith the long-term nature of the businesspursued.

Predetermined, measurableand complementary objectivesObjectives associated with variableremuneration which are predetermined,measurable and complementary and alsorepresent the priorities for the Company’sperformance as a whole, according to thestrategic plan and the expectations ofshareholders and stakeholders, promotingstrong orientation towards the results.These objectives are defined in order toensure: (i) evaluation of individual andbusiness annual performance, based on abalanced score card defined in relation tospecific objectives in the area of responsibilityand in line with the objectives assigned;(ii) definition of a long-term incentive planaccording to methods which enableevaluation of company performance both inabsolute terms, with reference to the capacityto pursue the medium- and long-termeconomic-financial performance, and inrelative terms in relation to a peer group, withreference to the capacity to generate shareperformance and create value greater thanthose of the main international competitors,and to guarantee greater alignment with theinterests of shareholders in the medium- andlong-term.

Consistency with effectively achievedtargetsIncentives linked with variable remunerationpaid following a careful verification of results

effectively achieved, assessing performancetargets assigned net of the effects ofexogenous variables, with a view to enhancingthe effective business performance derivingfrom management action.

Benefits in line with market benchmarksBenefits (with a preference given to pensionand insurance benefits) in line with marketremuneration benchmarks and compliant withlocal regulations to supplement and enhancethe remuneration package, reflecting rolesand responsibilities assigned.

Clawback clauses to coverthe risk of errorsand for significant violationsThe adoption, via specific Regulationapproved by the Board of Directors, on theproposal of the Compensation andNomination Committee, of clawbackmechanisms which enable previously paidvariable remuneration components to bereturned, or shares to not be definitivelyallocated during the vesting period or torequire the return of the value of sharesalready allocated and to withdraw this amountfrom payments due to the beneficiaries,where they were accrued based on figuressubsequently found to be clearly incorrect, orthe return of all bonuses (or shares/value) forthe year (or years) for which there was wilfulalteration of the data used for the review ofresults for achieving the right to the incentiveand/or the commission of severe andintentional violations of laws and/orregulations, the Code of Ethics or companyrules which are relevant or have an impact onthe employment relationship, affecting theassociated relationship of trust, withoutaffecting any permitted legal action to protectthe Company’s interests.

Conditions, methods and termsof application of the clawback principleThe Rules prescribe revocation of theassignment of shares or recovery of themonetary value of the stock or variablemonetary incentives within the maximum termof 3 years from the associated payout orallocation, where the incentives are found tohave been calculated based on figuresregarding results achieved and/orperformance targets realised, subsequentlyfound to be incorrect.The Rules also envisage recovery actions tobe applied within the maximum term of 5years from the associated payout orallocation, against individuals who are found tobe responsible for altering, through malice orgross misconduct, the figures used for thereview of the results in relation to targetsassigned for the achievement of the right tothe incentive, and/or for violations of lawsand/or regulations, the Code of Ethics orcompany rules which are relevant or have an


13

impact on the employment relationship, andare such as to diminish the associatedrelationship of trust.In such cases, following verificationsperformed by the company boards andfunctions of vigilance and control, wherethere are found to be errors that have animpact on the final results, the company may,following adjustment of the figures, order thecompetent boards and company functions torecalculate the incentives, with potential totalor partial recovery of incentives due based onresults effectively achieved. Errors that donot impact the final determination of theincentive sum are to be considered of noimportance.

Severance indemnitiesand non-competition clauseswithin the set limitsand to protect interestsAny additional severance indemnities andnon-competition clauses, for roles featuringgreater competition risks, defined within acertain amount or a certain number of yearsor months of remuneration, in line with theremuneration received.

2017 Remuneration PolicyGuidelines

The 2017 Remuneration Policy Guidelinesprovide for focusing the attention on thedefinition of 2017 objectives in line with theCompany’s strategic plan, in light of the newchallenges of the market and the neworganisational structure, and confirm the moregeneral policy adopted in the previous year.For non-executive Directors the 2017Guidelines reflect the resolutions taken by theBoard of Directors on May 25, 2015 and June15, 2015, following the renewal of thecompany bodies, based on the shareholders’meeting deliberations of April 30, 2015, andon the principle of continuity of theremuneration structure with that defined forthe previous mandate, and do not thereforeenvisage significant changes over theprevious year. For the CEO and the otherSenior Managers with strategicresponsibilities, the 2017 Guidelines confirmthe structure of the remuneration packageenvisaged in 2016, which introduced theshare-based Long-Term Incentive Plan (LTI).For further information on the characteristicsof the Plan, please refer to the section‘Long-Term Variable Incentive Plans’ of thisReport.

REMUNERATION COMPONENTs

FIXED COMPONENT

Fixed remuneration

SHORT-TERMVARIABLECOMPONENT

Annual variable

incentives

LONG-TERMVARIABLECOMPONENT

Share-based

Long-Term Variable

Incentivisation

BENEFITS

Non-monetary

bene�ts

ACCESSORYINSTRUMENTS

Severance Payment;

Minimum Term

Agreement;

Non-competition

agreement


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Chairman of the Boardof Directors and non-executiveDirectors

Remuneration for the Chairman of the Boardof Directors and for non-executive Directorsreflects the resolutions taken by the Board ofDirectors on May 25, 2015 and June 15,2015.

Remuneration for the Chairmanof the Board of DirectorsThe Policy Guidelines for the Chairman of theBoard of Directors reflect the resolutionspassed by the Board of Directors on June 15,2015, which defined a fixed remuneration, inconsideration of the greater powersattributed, of €278,000, inclusive of €60,000remuneration for the office of Directorresolved by the Shareholders Meeting of April30, 2015, in line with the reference marketbenchmarks, to which is added theremuneration of €20,000 for the role ofChairman of the Corporate GovernanceCommittee and Scenarios.

Remuneration of non-executive DirectorsThe Shareholders’ Meeting of April 30, 2015set gross annual remuneration fornon-executive Directors at €60,000.

Additional remunerationfor service on Board CommitteesAn additional annual remuneration willcontinue to be paid out to non-executiveDirectors for service on Board Committees.The fees, resolved by the Board of Directors

on May 25, 2015 are determined as follows:- €30,000 for the Chairman of the Audit and

Risk and €24,000 for other the members;- €20,000 for the Chairman of the

Compensation and Nomination Committeeand €15,000 for other members;

- €20,000 for the Chairman of the CorporateGovernance Committee and Scenarios7 and€15,000 for other members.

Payment in the event of office expiryor termination of employmentFor the Chairman and non-executiveDirectors, no payments are provided for in theevent of expiry of term of office or earlytermination.

BenefitsThere are no benefits for the Chairman andfor non-executive Directors.

CEO

For the CEO the 2017 remuneration structurereflects the resolutions taken by the Board ofDirectors on June 15, 2015 and June 27,2016. In relation to the mandates assigned, itincorporates the remuneration resolved bythe Shareholders’ Meeting for the Directors,and the remuneration potentially due forparticipation on the Boards of Directors ofsubsidiary or invested companies.

Fixed remunerationIn line with the resolutions of 2016, the grossfixed remuneration of the CEO is set at

(7) The Corporate Governance Committee and Scenarios was established for the first time in 2015 by the Board of Directors, with the role of supportingthe Board of Directors within the framework of preliminary investigation functions, for proposing and consulting on evaluations and decisions relating to theCompany’s and Group’s corporate governance, business social responsibility and in examining scenarios for the development of the strategic plan.

Chairman

Non-executiveDirectors

CEO

SeniorManagerswith strategicresponsibilities

remunerationDATa providers

Korn Ferry HayGroup

Korn Ferry HayGroup

Korn Ferry HayGroup

Willis TowersWatson

RAtIONALE

Analogous roles in Italian andEuropean listed companiescomparable to Saipem in termsof turnover, capitalisation andbusiness.

Analogous roles in companiescomparable by level ofcomplexity and responsibility inthe leading European companiescomparable to Saipem in termsof turnover, capitalisation andbusiness.

Italian companiesAutogrill, PrysmianLeonardo, Snam, Terna.

Italian companiesAtlantia, Autogrill,Prysmian, Leonardo,Luxottica, Snam, TIM,Terna.

Italian companiesLeonardo, Telecom Italia,Luxottica, Prysmian,Atlantia.

European companiesAmec, Balfour, Beatty,Bilfinger, Hoctief.

European companiesAlstom, Amec, BalfourBeatty, Bilfinger, Colas,Eiffage, Hoctief, Technip.

European companiesBilfinger, Technip,Hochtief, Amec,Colas, Balfour Beatty,Alstom, Eiffage, Petrofac,SBM Offshore, WoodGroup.

Role PEER GROUP

Roles with the same level of responsibility and managerial complexity in Italian andEuropean industrial groups comparable with Saipem in terms of turnover and capitalisationin various commodity sectors with a prevalence of companies operating in projectmanagement and construction of large works and infrastructure.


15

€900,000 per year. The sum was set by theBoard of Directors at the proposal of theCompensation and Nomination Committee.

Annual variable incentivesThe annual variable incentive plan isassociated with achievement of the Saipemperformance results for the previous year andeach is measured according to a 70-130performance scale, in relation to the weightingassigned to them (a performance below 70

points is considered zero). The minimumindividual performance level for incentivepay-out purposes is 85 points.The Plan will be determined based on resultsachieved by Saipem in the previous year,measured on a performance scale consistingof a minimum level performance (85 points), atarget level performance (100 points) and amaximum level performance (130 points),corresponding respectively to 51%, 60% and78% of fixed remuneration.

PERFORMANCE VS. EXPECTED TARGET Incentive(% OF THE FIXED REMUNERATION)

Minimum (85) 51%

Target (100) 60%

Maximum (130) 78%

2017 Targets for the 2018 Annual variable incentive plan

ECONOMIC-FINANCIALTARGETS

Free cash �ow

(weighting: 35%)

ECONOMIC-FINANCIALTARGETS

Adjusted EBITDA (1)

(weighting: 30%)

STRATEGICOBJECTIVES

Fit For the Future (2)

(weighting: 25%)

1. Fixed monetary costs

(weighting: 20%)

2. Fit For the Future 2.0

(weighting: 5%)

SUSTAINABILITYOBJECTIVES

Sustainability and HSE (3)

(weighting: 10%)

1. TRI (weighting: 5%)

2. We Want Zero

(weighting: 2.5%)

3. Global Compact

(weighting: 2.5%)

(1) The adjustment is referred only to reorganisation.

(2) Fit For the Future 2.0 provides for three objectives: an objective linked to �xed monetary costs (weighting: 20%) and two objectives linked to ‘Fit For the Future 2.0’ programme

(weighting: 5%). Within this programme, that aims at de�ning Saipem new industrial and organisational model to obtain more organisational agility and competitiveness, the two

objectives refer to the issue of Division organisational structure and matrix of authorisation.

(3) The Sustainability and HSE objective focuses on the issues of health and safety, divided between the following indicators:

- the Total Recordable Injury Frequency Rate;

- the ‘We Want Zero’ objective, which provides for fatal injury prevention programmes for continually reducing the injury rate and achieving the target of zero;

- the objective relating to the ‘Global Compact’. Guaranteeing respect of human and labour rights all along the supply chain, is a consolidated indicator relating to the involvement of

vendors of goods, materials and services in Human & Labour Rights (HLR) issues, according to the three speci�c actions of auditing, training and feedback.

The 2017 targets resolved by the Board ofDirectors on January 27, 2017 for the annualvariable incentive plan are in line with the

business model and strategic guidelines andare divided into the following:


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Long-term variable incentivesThe Share-based Long-Term Incentive Plan2016-2018 (approved by the Board ofDirectors on March 16, 2016 and by theShareholders’ Meeting on April 29, 2016),which includes all managerial resources,which includes all managerial resources, withthree awards beginning in July 2016,encompasses the free allocation of ordinarySaipem shares (performance shares) against

the achievement of two performanceconditions, the first in relation to a businessobjective (measured over the three-yearvesting period), and the second linked to theperformance of the Saipem share, bothmeasured at the end of the three-year periodof reference. The Plan requires that theperformance conditions be measured on thebasis of the following parameters:- Total Shareholder Return (TSR)8 of the

Saipem share, with a weighting of 50%,measured on a three-year basis in terms ofpositioning relative to the peer groupconsisting of the main internationalcompanies operating in the same sector asSaipem. The TSR is measured in relation tothe following peer group: Subsea 7, Petrofac,Hyundai E&C, McDermott International,Samsung Engineering Co, Aker Solutions,Technip, Tecnicas Reunidas, NobleCorporation, Ensco, Nabors Industries.The plan requires that a part of the awardfor the performance condition measured interms of Saipem’s TSR be at least equal tothe median performance of the peer groupas illustrated in the table;

- Net Financial Position (NFP): target whichmeasures medium- to long-termeconomic-financial performance of Saipemat the end of the reference three-yearperiod, with a 50% weighting.

The performance conditions operateindependently of each other. This means that,in the presence of an adequate performance

in at least one of the two objectives, a part ofthe award will mature regardless of theperformance achieved in the other objective.The achievement of the maximum result levelfor each performance condition leads to thepayment of 100% of the shares promised,while on achievement of a threshold result,50% of the shares assigned for the TSR and30% for the NFP will mature. In the event ofperformances below the threshold level, noshares will be issued.The maximum level of incentive attributed bythe Plan for the CEO is defined in relation tofixed remuneration, consistent with theprinciples laid down in the Guidelines, and isequal to 153% of fixed remuneration, leavingunchanged the maximum incentivepercentages contained in the previouslong-term monetary incentive plans.The maximum value at the end of the vestingperiod cannot be any more than four times

Market-based indicator: Total Shareholder Return

Performance in line with or greater than median Performance less than median

Position in ranking 1 2 3 4 5 6 7 8 9 10 11 12

Maturation 100% 100% 100% 100% 75% 50% 0% 0% 0% 0% 0% 0%

0

50%

70%

90%

110%

40%

60%

20%

10%

30%

80%

100%

Thresholdlevel

Maximumlevel

netfinancialposition

BUSINESS-BASED INDICATOR:Net financial position

(8) Total Shareholder Return (TSR) of the Saipem share, with a weighting of 50%, measured on a three-year basis in terms of positioning relative to the peergroup consisting of the main international companies operating in the same sector as Saipem. The Total Shareholder Return (TSR) of Saipem and its peersis calculated over a time period of 3 years, using the average of the closing values of the share price during the period between December 2016 andJanuary 2017 and the average of the closing share price during the period between December 2019 and January 2020.

0

0.5

1.0

1.5

2.0

2013 2015 2016 20142009 2012 2011

-59.6%

2010

Historic trend of TOTAL RECORDABLEINJURY FREQUENCY RATE

From 2009 to date, the Injury Frequency Index has reduced by 59.6%.


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Clawback clauseAll short- and long-term variable incentivesinclude a clawback clause enabling therecovery of variable remunerationcomponents found to have been paid out inerror or as the result of intentional misconductby beneficiaries, in accordance with theconditions, methods and terms of applicationdescribed in the ‘Aims and general principlesof the Remuneration Policy’ section of thisReport. (page 12).

Accessory remuneration instrumentsThe following payments are envisaged for theCEO, in line with the relevant practices and theprovisions of the Recommendation of theEuropean Commission No. 385 of April 30,2009, and to protect the company frompotential competition risks:a) Indemnities for termination of office or

termination of employment.- For early termination, not for just cause,

of the 2015-2017 mandate, also in thecase of resignations caused by essentialreduction of mandates, the payment isenvisaged of an all-inclusive lump sumaccording to Article 2383 (3) of the ItalianCivil Code, of an amount correspondingto two years of the total fixed grossremuneration (a total of €1,800,000).It should be noted that, in the event ofresignation from the post of CEO, whenthis is not justified by essential reductionof mandates, said resignation must becommunicated to the Board of Directorswith 4 months’ notice or, alternatively, theCEO must pay an indemnity of €300,000.

b) Non-competition agreement.- Non-competition agreement, to protect

the company’s interests, in consideration

of the high management profile ofinternational standing in the Oil & GasServices industry and the networks ofinstitutional and business relationshipsbuilt globally by the CEO.The non-competition clause can beactivated by the Board of Directorsfollowing evaluation and using an optionagainst a specific payment (of a grossamount of €450,000 to be paid in 3 annualinstalments). It envisages the payment ofan amount against the commitment takenon by the CEO not to carry out anyactivities in competition with Saipemoperations, in terms of its company objectand in the primary international markets,for the 12 months following thetermination of the mandate. This payment,approved by the Board of Directors onMarch 15, 2015, amounts to €1,800,000.Any breach of the non-competitionagreement will lead to non payment (orthe restitution on the part of the payee,where the violation has come to Saipem’sknowledge subsequent to payment), aswell as the obligation to pay the damagesconsensually and conventionallydetermined in an amount equal to doublethe payment agreed, without prejudice toSaipem’s faculty to request fulfilment ofthe agreement in a specific form.

BenefitsThe CEO is granted insurance cover againstthe risk of death and permanent disability andmembership of the supplementary healthcarefund (FISDE), as well as use of a Company carfor business and personal use andreimbursement of expenses for a Rome-Milanjourney once per week, if needed.

PERFORMANCE AND VESTING PERIOD LOCK-UP PERIOD

ILT FOR CHIEF EXECUTIVE OFFICER - TIMELINE

Total Shareholders Return and Net Financial Position

Year T T+1 T+2 T+3 T+4 T+5

Allocation

of free shares

Definitive

allocation of 75%

of matured shares

Definitive

allocation of 25%

of matured shares

the value of the shares at the moment of theirallocation.If the mandate is not renewed it is envisagedthat the definitive amount of shares beallocated at the end of the associated vestingperiod, according to the performanceconditions of the Plan.With a view to aligning the Company’s

interests with those of its shareholders overthe long term, and of ensuring thesustainability of the results obtained, the Planalso requires that 25% of the shares maturedby virtue of the achievement of the abovementioned results are to be locked up for aperiod of two years, during which the CEOcannot dispose of them.


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Senior Managerswith strategic responsibilities

Fixed remunerationFixed remuneration of SMSR is set based onroles and responsibilities assigned, taking intoaccount average levels of remuneration atother major Italian and internationalcompanies for roles of a similar level ofmanagerial responsibility and complexity, andmay be adjusted periodically in the frameworkof the annual salary review process which iscarried out for all managers.Taking into account the relevant context andcurrent market trends, the 2017 Guidelineswill employ selective criteria designed toensure adequate levels of competitivenessand motivation.In particular the proposed actions will involve:(i) the possibility of making adjustments toalign fixed remuneration with the marketmedian for resources that are particularlystrategic for the achievement of Companyresults, for those who have increased theperimeter of their responsibility or the level ofcoverage of their role, or who have highlycritical skills with a high impact on business;(ii) the possibility of awarding very selective,special one-off bonus payments (up to amaximum of 25% of fixed remuneration) forexcellent performances on key projects ortargeted at recovering competitiveness, andin consideration of retention purposes andperformances of excellent quality.

Annual variable incentivesThe Annual variable incentive plan envisages aremuneration calculated with reference toSaipem and individual performance results ofthe previous year and measured according toa 70-130 performance scale (below 70 pointsthe performance of each target is deemed tobe zero), with a minimum individual incentivethreshold of 85 points, below which no bonusis payable, in line with that previouslydescribed for the CEO. The target levelincentive (performance = 100) and maximumlevel performance (performance = 130) entailpayouts that vary in accordance with the roleof the beneficiary, up to a maximum of 40%and 52% of fixed remuneration, respectively.The performance objectives of other SMSRare calculated on the basis of the objectivesassigned to Top Management and focus oneconomic-financial performance, operations,internal efficiency, sustainability (especiallyhealth and safety, environmental protection,stakeholder relations), as well as in relation tothe manager’s area of responsibility for therole covered, in accordance with theCompany Performance Plan.

Long-term variable incentivesSenior Managers with strategicresponsibilities, in line with that defined for theCEO, participate in the long-term incentive

plan defined by the Board of Directors onMarch 16, 2016 and approved by theShareholders’ Meeting on April 29, 2016.The Long-Term Incentive Plan (LTI)2016-2018, which includes all managerialresources, with three awards beginning in July2016, encompasses the free allocation ofordinary Saipem shares (performance shares)against the achievement of two performanceconditions, the first in relation to a businessobjective measured over the three-yearvesting period, and the second linked to theperformance of the Saipem share in thethree-year period of reference. The Planrequires that the performance conditions bemeasured on the basis of the followingparameters:- Total Shareholder Return (TSR) of the

Saipem share, with a weighting of 50%,measured on a three-year basis in terms ofpositioning relative to the peer groupconsisting of the main internationalcompanies operating in the same sector asSaipem;

- Net Financial Position (NFP): target whichmeasures medium- to long-termeconomic-financial performance of Saipemat the end of the reference three-yearperiod, with a 50% weighting.

The TSR is measured in relation to thefollowing peer group: Subsea 7, Petrofac,Hyundai E&C, McDermott International,Samsung Engineering Co, Aker Solutions,Technip, Tecnicas Reunidas, NobleCorporation, Ensco, Nabors Industries.The plan requires that a part of the award forthe performance condition measured in termsof Saipem’s TSR be at least equal to themedian performance of the peer group asillustrated in relation to the CEO.The performance conditions operateindependently of each other. This means that,in the presence of an adequate performancein at least one of the two objectives, a part ofthe award will mature regardless of theperformance achieved in the other objective.The achievement of the maximum result levelfor each performance condition leads to thepayment of 100% of the shares, while onachievement of a threshold result, 50% of theshares assigned for the TSR and 30% for theNFP will mature. In the event of performancesbelow the threshold level, no shares will beissued.The maximum levels of incentive attributed bythe Plan are defined in relation to the positioncovered and to fixed remuneration, consistentwith the principles laid down in the Guidelines,and are equal to 100% of fixed remuneration,leaving unchanged the maximum incentivepercentages contained in the previouslong-term incentive plans. The maximum valueat the end of the vesting period cannot be anymore than four times the value of the sharesat the moment of their allocation.The Plan further provides that 25% of the


19

+100%Additional shares

(retention share)

Shares invested

(Co-investment)

Shares invested

(Co-investment)

Equivalent to 25%

of shares matured

from the base plan

T3

Matured at the end

of the two-year

investment period

T5

Co-investment plan

PERFORMANCE AND VESTING PERIOD CO-INVESTMENT PERIOD

Year T T+1 T+2 T+3 T+4 T+5

Allocation

of free shares

Definitive

allocation of 75%

of matured shares

Definitive

allocation of 25%

of matured shares

and retention shares

ILT FOR SENIOR MANAGERS WITH STRATEGIC RESPONSIBILITIES - TIMELINE

Total Shareholders Return and Net Financial Position

shares matured at the end of the three-yearvesting period by virtue of the degree ofachievement of the above mentionedperformance conditions will be invested in aco-investment plan for a two-year periodduring which the beneficiaries cannot in anyway dispose of the part of matured shares,and at the end of which the beneficiaries willreceive one additional share for each shareinvested. The co-investment aims tostrengthen further the alignment of interestsbetween management and shareholders overthe long-term and to act as leverage for theretention of management.The Plan includes clauses designed toencourage retention whereby, in the event oftermination of the employment contract bymutual consent or loss of control by Saipemof the company where the beneficiary of theplan is employed during the vesting period,the beneficiary conserves the right to theincentive, which is reduced on a pro-rata basisin relation to the time elapsed between theaward of the base incentive and the

provided by the National CollectiveLabour Agreement for Senior Managersin the event of voluntary redundancy orearly retirement. These criteria takeaccount of the actual and pensionableage of the Senior Manager at the time thecontract is terminated and his/her annualremuneration. In addition, severancepayments up to a maximum of two years’fixed remuneration for a Change ofControl resulting in resignation ortermination and/or demotion may beestablished on the basis of individualtermination indemnity agreements.

b) Minimum Term Agreement.- Minimum Term Agreement may be

prescribed to protect the know-how withthe aim of guaranteeing continuity inachieving the business objectives for amaximum period of 12 months ofremuneration.

occurrence of the event. In the event ofunilateral termination of employment, nopayment is made.

Clawback clauseThe clawback clause is envisaged for SeniorManagers with strategic responsibilities, andhas the conditions, methods and terms ofapplication described in the ‘Aims and generalprinciples of the Remuneration Policy’ sectionon page 12 of this Report.

Accessory remuneration instrumentsa) Indemnities for termination of office or

termination of employment.- SMSR, like all Saipem Senior Managers,

receive the termination indemnityestablished in the National CollectiveLabour Agreement, as well as anysupplementary indemnities that may beagreed on an individual basis upontermination in accordance with criteriaset by Saipem and whose maximumamounts are established taking intoaccount the entitlements already


20

c) Non-competition agreements.- Specific remuneration may be envisaged

for cases where the need is found toenter into non-competition agreementsfor a maximum amount of 12 months ofremuneration per year of the agreement.

BenefitsIn continuity with the remuneration policiesimplemented in 2016 and in accordance with

the relevant collective labour agreementestablished at national level andsupplementary agreements reached atcompany level for Saipem Senior Managers,Senior Managers with strategic responsibilitiesare granted membership of the supplementarypension fund FOPDIRE9 and theSupplementary Healthcare Fund FISDE10,death and disability insurance coverage and acompany car for business and personal use.

(9) Closed pension fund operating on a defined contribution, individual account basis, www.fopdire.it.(10) Healthcare fund providing reimbursement of medical expenses for working and retired Senior Managers and their family members, www.fisde-eni.it.

21

Section II - Remunerationand other information

SAIPEM Remuneration Report / Section II - Remuneration and other information

Implementation of 2016remuneration policies

This section of the report provides adescription of the remuneration policiesimplemented in 2016 for the Chairman of theBoard of Directors, non-executive Directors,the CEO and Senior Managers with strategicresponsibilities.Implementation of the 2016 RemunerationPolicy, according to what has been verified bythe Compensation and NominationCommittee on the periodic evaluationenvisaged by the Corporate GovernanceCode, was found to be in line with the 2016Remuneration Policy approved by the Boardof Directors on March 16, 2016, according tothe provisions of the resolutions taken by theBoard of Directors on May 25, 2015, June 15,2015 and June 27, 2016, regarding theremuneration of non-executive Directorsparticipating in Board Committees and thedefinition of the remuneration of the Chairmanand the CEO. Based on the evaluationexpressed by the Committee, the 2016 Policyis in line with the market benchmarks.

Fixed remuneration

DirectorsThe Chairman was paid the remuneration forthe office approved by the Board of Directorson June 15.This remuneration includes that for the officeof Director approved by the Shareholders’Meeting of April 30, 2015. The Chairman wasalso paid the remuneration for the post ofChairman of the Corporate GovernanceCommittee and Scenarios.Non-executive Directors were paid the fixedremuneration approved by the Shareholders’Meeting of April 30, 2015.The CEO was paid the remuneration approvedby the Board of Directors on June 15, 2015.This remuneration includes that for the officeof Director approved by the Shareholders’Meeting of April 30, 2015.

Senior Managerswith strategic responsibilitiesFor Senior managers with strategicresponsibilities, as part of the annual salaryreview envisaged for all managers, in 2016adjustments were made to the fixedremuneration for positions whose perimeterof responsibility has increased or are placedbelow the average market benchmarks.

During 2016 special one-off bonus payments(up to a maximum amount of 25% of theindividual fixed remuneration) were also paid,associated with achieving particularlysignificant results or projects during the yearor through having contributed to operationsassociated with the demerger from Eni andimprovement of the Company’s financialstability, also through debt refinancingtransactions, for a total amount of € 329,000.The sums for fixed remuneration and, asregards employment salaries, for indemnitiescovered under the national contract for seniormanagers and under supplementary companyagreements, are specified in the relevant itemof Table No. 1 of the chapter ‘Remunerationpaid in 2016’.

Remuneration for serviceon Board Committees

Non-executive Directors were paid theadditional remuneration due for service onBoard Committees, according to theresolution of the Board of Directors datedMay 25, 2015, according to the criteria ofdifferentiation between the Chairman andother members.Remuneration for service on BoardCommittees is shown in Table No. 1 of thesection ‘Remuneration paid in 2016’.

Variable incentives

Annual variable incentivesThe Saipem results for 2015, evaluated andapproved by the Board of Directors on theproposal of the Compensation andNomination Committee at the Meeting onMarch 16, 2016, led to the calculation of aperformance score less than the setminimum threshold. In accordance with the2016 Remuneration Policy Guidelines, theperformance score achieved did not activatethe annual monetary incentive system for theCEO and for the Senior Managers withstrategic responsibilities, apart from for thoseroles belonging to control functions havingtheir own autonomy and independence fromthe corporate results.The incentives awarded to the SeniorManagers with strategic responsibilities areindicated under the item ‘Non-equity variableremuneration/bonuses and other incentives’in Table No. 1, and detailed in Table No. 3 ofthe section ‘Remuneration paid in 2016’.

table 1

Deferred Monetary Incentives (DMI) Performance during vesting period % incentive

2013 2014 2015

EBITDA ≥ Max level 170% 170% 170%

Budget ≤ EBITDA ≤ Max level 130% 130% 130%23%

Threshold ≤ EBITDA ≤ Budget 70% 70% 70%

EBITDA ≤ Threshold 0% 0% 0%

Long-term variable incentivesUp to 2015, the Saipem long-term variablecomponent consisted of two separateincentive plans:- Deferred Monetary Incentive Plan (DMI)

including all managerial resources, linked tothe performance of the Company measuredin terms of EBITDA11. The incentive actuallypaid out at the end of the three-year vestingperiod is calculated on the basis of theaverage annual EBITDA results obtained inthe vesting period, as a percentage rangingfrom 0 to 170% of the value assigned.The annual performance is assessedaccording to a scale between 70% and170% (below the minimum threshold of70% the performance is considered equalto zero).

- Long-Term Monetary Incentive Plan (LMIT)for critical management, linked until 2013 toAdjusted Net Profit + Depreciation& Amortisation achieved by the Company inproportion to its primary internationalcompetitors and, starting from 2014, to theperformance of the share price achieved bythe Company in proportion to its primaryinternational competitors (measured byTotal Shareholder Return weighting 60%)and profitability of invested capital(measured by the ROACE indicatorweighting 40%). The amount to be paid outat the end of the three-year vesting periodis calculated as a percentage of the amountallocated, based on the results achievedduring the three-year vesting period.

The annual performance is assessedaccording to a scale between 70% and130% (below the minimum threshold of70% the performance is considered equalto zero).

In 2016, a new share-based Long-TermIncentive (LTI) Plan was introduced to replacethe previous DMI and LMIT plans, whichinvolves free allocation of ordinary shares inthe Company against the achievement ofperformance conditions, measured via abusiness objective (Net Financial Position,weighting 50%) and an objective relating tothe trend of the Saipem share price (TotalShareholder Return in proportion to itsprimary international competitors, weighting50%), both measured over a period of 3 years,maintaining the maximum incentivepercentages envisaged by the previous 2long-term plans unchanged.

Deferred Monetary IncentiveIn 2016, the deferred monetary incentiveallocated in 2013 to critical managerialresources accrued. On March 16, 2016, onthe proposal of the Compensation andNomination Committee, the Board ofDirectors decided on a 3-year average factorof 23% to be applied to the incentive base forcalculating the 2013 allocation, based on theSaipem EBITDA for the period 2013-2015.Table 1 shows the performances achievedduring the vesting period as used todetermine the percentage of the award paidout to SMSR.

The incentives awarded to the SeniorManagers with strategic responsibilities areindicated under the item ‘Bonuses from prioryears payable/paid out’ in Table No. 3B of thesection ‘Remuneration paid in 2016’.

Long-Term Monetary IncentiveIn 2016, the long-term monetary incentiveallocated in 2013 to managerial resources

accrued. On July 27, 2016, on the proposal ofthe Compensation and NominationCommittee, the Board of Directors decided ona 3-year average factor of 33% to be appliedto the incentive base for calculating theallocation, based on the final Saipem NetAdjusted Profit + D&A for the period2013-2015. Table 2 shows the performancesachieved during the vesting period as used to

(11) Earnings before interest, tax, depreciation and amortisation.

0%


22


23

determine the percentage of the incentivepaid out to Senior Managers with strategicresponsibilities.

table 2

Long-Term Monetary Incentive (LTMI) Performance during vesting period % incentive

Positioning in the peer group (*) 2013 2014 2015

1° 130% 130% 130%

2° 115% 115% 115%

3° 100% 100% 70%

4° 85% 85% 85% 33%

5° 70% 70% 70%

6° 0% 0% 0%

7° 0% 0% 0%

(*) Positioning in the peer group based on Saipem Net Adjusted Profit + Depreciation & Amortisation results.

The incentives awarded to the SeniorManagers with strategic responsibilities areindicated under the item ‘Bonuses from prioryears payable/paid out’ in Table No. 3B of thesection ‘Remuneration paid in 2016’.

Share-based Long-Term IncentiveIn accordance with the 2016 RemunerationPolicy Guidelines and the contractualconditions relating to the 2015-2017mandate associated with the post of CEOapproved by the Board of Directors on June27, 2016, the Board of Directors decided atthe meeting of July 27, 2016 on 3,653,489ordinary shares in Saipem SpA as the numberof shares subject to the 2016 allocation to theCEO. This forms part of the 2016-2018share-based Long-Term Incentive Plan,according to the criteria and methods definedby the Board of Directors on March 16, 2016and approved by the Shareholders’ Meeting ofApril 29, 2016.For Senior Managers with strategicresponsibilities the 2016 allocation was madein an amount of shares of 10,274,645, withinthe sphere of the maximum incentive levelsattributed by the Plan for Saipemmanagement, defined in relation to theposition held and the fixed remuneration oraverage remuneration of the relevantmanagement band.The shares subject to the allocation to theCEO and the Senior Managers with strategicresponsibilities are reported in Table No. 1 ofscheme 7 of Annex 3A of Regulation No.11971/1999, according to the requirementsof Article 84-bis (Annex 3A, scheme 7) of theConsob Issuers Regulation, with theassociated detail in Table 3A of the section‘Remuneration paid in 2016’.

Indemnities for terminationof office or terminationor employment

During 2016 no indemnities for termination ofoffice were deliberated and/or paid toDirectors and other Senior Managers withstrategic responsibilities.

Benefits

Table No. 1 of the chapter ‘Remuneration paidin 2016’ shows the taxable value of benefitspaid in 2016, in particular with reference to thefollowing benefits: (i) annual contribution to thesupplementary pension fund FOPDIRE;(ii) annual contribution to the supplementaryhealthcare fund FISDE; (iii) assignment of acompany car for business and personal use(the value stated is exclusive of thecontribution paid by the assignee); (iv) amountpayable for the weekly return flights betweenMilan and Rome.

Payment against the Boardof Directors’ optionfor implementation of thenon-competition agreement

In line with the 2016 Remuneration PolicyGuidelines, the CEO was paid the secondtranche, in the amount of €150,000 gross, ofthe €450,000 gross to be paid in three annualinstalments beginning 2015, provided forunder the non-compete option reserved tothe Board of Directors for implementation ofthe non-competition agreement with theCEO.


24

(12) There is no current legal requirement for disclosure on an individual basis.

Remuneration paid in 2016

Table 1 - Compensation paidto Directors, Statutory Auditorsand Senior Managerswith strategic responsibilities

The following table shows remuneration paidto Directors and Statutory Auditors, who arelisted by name, and remuneration paid toother Senior Managers with strategicresponsibilities12, which is shown on anaggregated basis. Separate indication issupplied for remuneration received fromsubsidiaries and/or associated companies,not including those renounced or paid into theCompany. All persons who held theabove-mentioned positions during thefinancial year are included in the table, even ifthey only held the position for part of the year.In particular:- the column ‘Fixed remuneration’ shows

fixed emoluments and remuneration foremployed work due for the year.The amounts shown are gross beforedeductions for social security and taxpayable by the employee. They do notinclude attendance fees, as these are notprovided for. The footnote provides detailsof remuneration, as well as a separateindication of any allowances and otherentitlements related to employment;

- the column ‘Remuneration for service onBoard Committees’ shows compensationpertaining to the year paid to Directors forparticipation in Committees created by theBoard. The footnote provides a separate

indication of remuneration for eachCommittee on which the Director sits;

- the item ‘Bonuses and other incentives’ inthe column ‘Variable non-equityremuneration’ shows incentives paid duringthe year as a result of rights maturingfollowing checking and approval ofperformance results by the relevantCompany Bodies as detailed in Table No.3B, ‘Monetary incentives paid to Directorsand SMSR’; the column ‘Profit sharing’ isempty because there are no profit sharingschemes in place;

- the column ‘Non-monetary benefits’ showsthe taxable value of fringe benefits paid;

- the column ‘Other remuneration’ shows anyother compensation paid pertaining to theyear and relating to other servicesperformed;

- the column ‘Total’ shows the total of thepreceding items;

- the column ‘Fair value of equityremuneration’ shows the fair value for theyear of stock grant plans in place asestimated in accordance with InternationalFinancial Reporting Standards which requirecosts to be distributed over the vestingperiod, as further detailed in Table No. 3A,‘Incentive plans based on financialinstruments other than stock optionspayable to Directors and to the SeniorManagers with strategic responsibilities’;

- the column ‘Indemnities for termination ofoffice or termination of employment’ showindemnities accrued, including indemnitiesnot yet paid, in relation to termination ofoffice or employment.


25

Table 1. Amounts paid to members of management and control bodiesand to Senior Managers with strategic responsibilities

(€ thousand)

Non-equity variableremuneration

Board of Directors

Colombo Paolo Andrea Chairman (1) 01.01-12.31 04.18 278 (a) 20 (b) 298

Cao Stefano Chief Executive Officer (CEO) (2) 01.01-12.31 04.18 900 (a) 29 (b) 929 140

Cappello Maria Elena Director (3) 01.01-12.31 04.18 60 (a) 20 (b) 80

Ferrucci Francesco Antonio Director (4) 01.01-12.31 04.18 60 (a) 30 (b) 90

Mazzarella Flavia Director (5) 01.01-12.31 04.18 60 (a) 24 (b) 84

Siragusa Stefano Director (6) 01.01-01.21 3 (a) 1 (b) 4

Pattofatto Leone Director (7) 01.21-12.31 57 (a) 14 (b) 71

Guzzetti Guido Director (8) 01.01-12.31 04.18 60 (a) 33 (b) 93

Picchi Nicla Director (9) 01.01-12.31 04.18 60 (a) 30 (b) 90

Ferro-Luzzi Federico Director (10) 01.01-12.31 04.18 60 (a) 15 (b) 75

Board of Statutory Auditors

Busso Mario Chairman (11) 01.01-12.31 04.17 70 (a) 70

Invernizzi Massimo Statutory Auditor (12) 01.01-12.31 04.17 50 (a) 50

De Martino Giulia Statutory Auditor (13) 01.01-12.31 04.17 50 (a) 50

Senior Managers

with strategic responsibilities (**) (14) 4,139 (a) 984 (b) 146 (c) 5,268 409

5,908 187 984 175 7,252 549

(*) Term of office of Directors appointed by Shareholders’ Meeting on April 30, 2015 expires at Shareholders’ Meeting convened to approve the financial statements at December 31, 2017.(**) All Senior Managers serving on the Advisory Committee, and at any rate all direct reports of the CEO (14 Senior Managers)(1) Paolo Andrea Colombo - Chairman

(a) The sum corresponds to the fixed remuneration set by the Board of Directors’ Meeting of June 15, 2015 at €278,000, which includes the remuneration for the office of Director setby the Board of Directors’ Meeting of April 30, 2015 (€60,000).(b) The sum corresponds to the remuneration for the role of Chairman of the Corporate Governance Committee and Scenarios (€20,000).

(2) Stefano Cao - Chief Executive Officer (CEO)(a) The amount corresponds to the fixed remuneration approved by the Board on June 15, 2015 (€900,000) which incorporates the base remuneration as CEO set by the Shareholders’Meeting (€60,000), added to which is the amount of €150,000 paid as the 2nd annual tranche of the non-competition option prescribed for the CEO for a total amount of €450,000.(b) The amount includes the value of the car benefit, the supplementary healthcare fund contributions paid by the company and the amount payable for the weekly return flights betweenMilan and Rome.

(3) Maria Elena Cappello - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for the role of Chairman of the Compensation and Nomination Committee (€20,000).

(4) Francesco Antonio Ferrucci - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for participation in the Compensation and Nomination Committee (€15,000) and in the Corporate Governance Committee and Scenarios(€15,000).

(5) Flavia Mazzarella - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for participation in the Audit and Risk Committee (€24,000).

(6) Stefano Siragusa - Director(a) The sum corresponds to the pro-rata portion of the fixed remuneration set by the Board of Directors’ Meeting on April 30, 2015 (€60,000).(b) The sum corresponds to the pro-rata portion of the remuneration for participation in the Corporate Governance Committee and Scenarios (€15,000).

(7) Leone Pattofatto - Director(a) The sum corresponds to the pro-rata portion of the fixed remuneration set by the Board of Directors’ Meeting on April 30, 2015 (€60,000).(b) The sum corresponds to the pro-rata portion of the remuneration for participation in the Corporate Governance Committee and Scenarios (€15,000).

(8) Guido Guzzetti - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for participation in the Audit and Risk Committee (€24,000) and to the remuneration for participation in the Corporate Governance Committeeand Scenarios (€15,000).

(9) Nicla Picchi - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for the role of Chairman of the Audit and Risk Committee (€30,000).

(10) Federico Ferro-Luzzi - Director(a) The sum corresponds to the fixed Board meeting fees.(b) The sum corresponds to remuneration for participation in the Compensation and Nomination Committee (€15,000).

(11) Mario Busso - Chairman of the Board of Statutory Auditors(a) The sum corresponds to the fixed Board meeting fees.

(12) Massimo Invernizzi - Statutory Auditor(a) The sum corresponds to the fixed Board meeting fees.

(13) Giulia De Martino - Statutory Auditor(a) The sum corresponds to the fixed Board meeting fees.

(14) Senior Managers with strategic responsibilities(a) To the sum of €4,139,000 for gross annual remuneration can be added allowances for assignments in Italy and overseas that are in line with the national contract for Senior Managersand with supplementary company agreements, and entitlements related to employment, for a total amount of €216,000.(b) The amount includes the payment of €69,500 for the 2016 annual monetary incentive linked to the 2015 performance, the payment of €305,000 relating to the deferred monetaryincentives awarded in 2013, the payment of €280,000 relating to the long-term incentives awarded in 2013 and the payment of an extraordinary bonus in the amount of €329,000.(c) The amount includes the value of the car benefit, the supplementary healthcare fund and supplementary pension fund contributions payable by the Company and the payment of thebonus for the 25th year of service at the Company.

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26

Table 3A - Incentive plans basedon financial instrumentsother than stock optionspayable to Directorsand to Senior Managers withstrategic responsibilities

The following table shows long-term variableincentives based on financial Instrumentsother than stock options payable to the CEOand, as an aggregated figure, to SMSR.In particular:- the column ‘Number and type of financial

instruments’ indicates the number of freeshares allocated during the year, inimplementation of the share-basedlong-term incentive plans;

- the column ‘Fair value at date of award’shows the total fair value of stock grantplans in place at the date of allocation;

- the column ‘Vesting period’ shows thevesting period for long-term monetaryincentives awarded during the year;

- the column ‘Fair value for the year’ showsthe fair value of stock grant plans in placeas estimated in accordance withInternational Financial Reporting Standardswhich require costs to be distributed overthe vesting period.

The total of the column ‘Financial instrumentspertaining to the year - Fair value’ correspondswith the amount indicated in Table No. 1.

Table 3A: Incentive plans based on financial instruments other than stock options payable to Directors and to Senior Managers with strategic responsibilities

(€ thousand) Financial instruments allocated during the year

Stefano Cao Chief Executive Officer (CEO) 2016 Long-term

Incentive Plan

BoD, July 27, 2016 3,653,489 1,005 three-year (2) 07.27.2016 0.4396 140

Senior Managers 2016 Long-term

with strategic Incentive Plan

responsibilities (1) BoD, July 27, 2016 10,274,645 3,493 three-year (3) 07.27.2016 0.4396 409

Total 4,498 549

(1) All Senior Managers serving on the Advisory Committee, and at any rate all direct reports of the CEO (14 Senior Managers).

(2) The Plan requires that 25% of the shares matured at the end of the vesting period are to be locked up for a period of two years.

(3) The Plan also calls for the strategic resources to invest 25% of the matured shares at the end of the vesting period for a further two-year period (co-investment period), after

which beneficiaries will receive an additional free share for every share invested.

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and t

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instr

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t date

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aw

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Vesti

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date

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on a

llocati

on

Fin

ancia

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ents

pert

ain

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o t

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ear

- Fair

valu

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27

Table 3B - Monetary IncentivePlan for Directorsand Senior Managerswith strategic responsibilities

The following table shows the short andlong-term variable monetary incentivespayable to the CEO and (as an aggregatedfigure) to SMSR. All persons who held theabove-mentioned positions during thereporting period are included in the table,even if they only held such office for a part ofthe year. In particular:- the column ‘Annual bonus - to be paid

out/paid out’ shows the short-term variableincentive paid out on the basis ofperformance, as evaluated by thecompetent company bodies in relation tothe targets set for the previous year;

- the column ‘Bonuses from previous years - no longer payable’ shows long-termincentives which can no longer be paid outon due to the performance recorded duringthe vesting period or to portions ofincentives which have been cancelled in

connection with events relating to theemployment contract pursuant to the PlanRules;

- the column ‘Bonuses from previous years -to be paid out/paid out’ shows long-termvariable incentives paid out on during theyear that were earned due to theperformance recorded during the vestingperiod or to portions of incentives whichwere paid out on in connection with eventsrelating to the employment contractpursuant to the Plan Rules;

- the column ‘Bonuses from previous years- still deferred’ shows incentives awarded inprevious years as part of long-termincentives that have not yet vested;

- the column ‘Other bonuses’ showsincentives paid out on an extraordinaryone-off basis in relation to the achievementof particularly important results or projectsduring the year.

The total of the columns ‘Annual bonus - to bepaid out/paid out’, and ‘Other bonuses’corresponds to the figure show in column‘Bonuses and other incentives’ of Table No. 1.

Table 3B - Monetary Incentive Plan for Directors and Senior Managers with strategic responsibilities

(€ thousand) Annual bonus Bonuses from previous years

Senior Managers 2016 Annual Monetary

with strategic Incentive Plan

responsibilities (1) BoD, March 16, 2016 70

2015 Deferred Monetary Incentive Plan

BoD, July 28, 2015 664

2015 Long-term Monetary Incentive Plan

BoD, October 12, 2015 1,202


BoD, March 17, 2014 97


BoD, October 28, 2014 1,115


BoD, July 30, 2013; BoD, March 16, 2016 327 (2) 305 (3)


BoD, October 28, 2013; BoD, July 27, 2016 720 (4) 280 (5)

Total 70 1,047 585 3,078 329


(2) Pro-rata amount of the deferred monetary incentive awarded in 2013 and no longer payable following the finalisation of the EBITDA performance during the three-year

reference period 2013-2015.

(3) Payout of deferred monetary incentive awarded in 2013, based on EBITDA performance during the three-year reference period 2013-2015.

(4) Pro-rata amount of the long-term monetary incentive awarded in 2013 and no longer payable following the finalisation of the Net Adjusted Profit + Depreciation & Amortisation

performance during the three-year reference period 2013-2015.

(5) Payout of long-term monetary incentive awarded in 2013, based on Net Adjusted Profit + Depreciation & Amortisation performance during the three-year reference period

2013-2015.

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paid

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Sti

ll defe

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bonuses


28

Shares held

Table 4 - Shares held byDirectors and Senior Managerswith strategic responsibilities

Pursuant to Article 84-quater, paragraph 4, ofthe Consob Issuers Regulation, the followingtable shows shares held in Saipem SpA by theDirectors, Statutory Auditors and other SMSR,as well as by their spouses, where not legallyseparated, and by their minor children, either

directly or through subsidiary companies,fiduciaries or third parties, as per theShareholders Register, communicationsreceived or other information received fromthe persons concerned.The table includes all persons that held officefor whole or a part of the year.The number of shares (all of which are‘ordinary’) is indicated on an individual basisfor Directors and Statutory Auditors and on anaggregated basis for SMSR. All shares areheld as personal property.

Board of Directors

Paolo Andrea Colombo Chairman Saipem SpA - 290,000 - 290,000

Stefano Cao Chief Executive Officer (CEO) Saipem SpA 285 290,000 - 290,285

Federico Ferro-Luzzi Director Saipem SpA - 40,500 40,500 -

Other Senior Managers

with strategic responsibilities (1) Saipem SpA 56,100 341,000 - 397,100

(1) All Senior Managers serving on the Executive Committee, and at any rate all direct reports of the CEO (14 Senior Managers). The number of shares held at the end of the

previous financial year takes into account those also held by Senior Managers who became strategic during 2016.

Nam

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Num

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of

share

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at

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ear

Num

ber

of

share

s p

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Num

ber

of

share

s s

old

Num

ber

of

share

s h

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at

end o

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year

With reference to the 2016-2018share-based Long-Term Incentive Planapproved by the Shareholders’ Meeting onApril 29, 2016, in conformity with theconditions and objectives illustrated in theInformation Document available on the

Internet site www.saipem.com, the followingtable provides the details of the 2016allocation for the Plan, pursuant to Article84-bis (Annex 3A, scheme 7) of the ConsobIssuers Regulation.

Annex pursuant to Article 84-bis of the Consob Issuers Regulation- Implementation for 2016 of the share-basedLong-Term Incentive Plan 2016-2018

Table 1 of scheme 7 from Annex 3A of Regulation No. 11971/1999

Scheme 1 - Financial instruments other than stock options

Section 2 - Newly allocated financial instruments based on the decision of the body

responsible for implementing the shareholders’ resolution

Stefano Cao Chief Executive Officer (CEO) April 29, 2016 stock grants 3,653,489 BoD 07.27.2016 n.a. 0.4396 3 years (2)

CpR 07.20.2016

Senior Managers April 29, 2016 stock grants 10,274,645 BoD 07.27.2016 n.a. 0.4396 3 years (3)

with strategic responsibilities (1) CpR 07.20.2016

Other Senior Managers April 29, 2016 stock grants 47,106,968 BoD 07.27.2016 n.a. 0.4396 3 years (3)

CpR 07.20.2016


(2) The Plan requires that 25% of the shares matured at the end of the vesting period are to be locked up for a period of two years.

(3) The Plan also calls for the strategic resources to invest 25% of the matured shares at the end of the vesting period for a further two-year period (co-investment period), after

which beneficiaries will receive an additional free share for every share invested.

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Headquarters: San Donato Milanese (Milan) - Italy

Via Martiri di Cefalonia, 67

Branches:

Cortemaggiore (Piacenza) - Italy

Via Enrico Mattei, 20

Information for Shareholders

Saipem SpA, Via Martiri di Cefalonia, 67

20097 San Donato Milanese (Milan) - Italy

Relations with institutional investors

and financial analysts

Fax +39-0244254295

e-mail: [email protected]

Publications

Relazione finanziaria annuale (in Italian)

Annual Report (in English)

Interim Consolidated Report as of June 30

(in Italian and English)

Saipem Sustainability (in English)

Also available on Saipem’s website:

www.saipem.com

Website: www.saipem.com

Operator: +39-024421

Layout and supervision: Studio Joly Srl - Rome - Italy

Printing: Stilgraf Srl - Viadana (Mantua) - Italy

Società per Azioni

Share Capital €2,191,384,693 fully paid up

Tax identification number and Milan Companies’ Register

No. 00825790157

saipem spaVia Martiri di Cefalonia, 6720097 San Donato Milanese (Milan)Italy

saipem.com

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