Sol | 2016

Etica Sgr attended SOL Spa’s shareholders’ meeting for the first time on May 12th, in Monza. SOL Spa is an Italian company specializing in the production, research and sale of industrial and medical gases.

Etica Sgr expressed its appreciation of SOL’s efforts to publish its 2015 Sustainability Report – the seventh edition – before the date of the shareholders’ meeting, allowing shareholders to make more detailed observations. In terms of corporate social responsibility, Etica Sgr asked SOL to establish a specific committee to oversee sustainability issues as they relate to business operations and stakeholder relations, as well as a Nominating Committee and an Audit and Risk Committee, in line with both national and international best practices.

Etica Sgr is aware of SOL’s commitment to managing its environmental policy so as to reduce its environmental impact; at the same time, however, Etica Sgr asked SOL to consider participating in the CDP’s climate change initiative. It also called attention to the issue of decarbonization and the importance of diversifying the company’s energy mix, so that energy production and procurement are more closely linked to renewable sources. In addition, Etica Sgr proposed the introduction of environmental indicators as well as health and safety indicators in the evaluation of suppliers.

As for voting, Etica voted in favor of approving the company’s financial statements and dividend distribution proposal; nonetheless, Etica Sgr made it known that it would have preferred a separate vote for each of these topics.

In reference to SOL’s Remuneration Policy, while Etica Sgr appreciated the fact that it was presented in a very clear fashion, the first part of the document contained mostly qualitative information, and the presentation only referred to the amounts of the two General Managers’ short-term variable pay. Furthermore, several important elements were missing, such as the following: the target value for MBO-based pay; the stipulation of an upper ceiling for MBO-based pay; clawback provisions for annual bonuses; peer group analysis of similarly-sized businesses; the introduction of ESG parameters in determining bonuses; and indication of the CEO-to-worker pay ratio as it relates to the company’s Managing Director and the median pay of its full-time employees. For all of these reasons, Etica Sgr voted against approval of the Remuneration Policy. Etica Sgr also voted against the fourth agenda item concerning the determination of Board Member compensation for the fiscal year 2016, as there was inconsistency in the time frames: the compensation is valid for one year, while Board Members serve a term of three years.

As for the election of SOL’s Board of Directors, Etica Sgr voted in favor of the only list of candidates presented by the majority shareholder. Etica Sgr was pleased with the fact that the composition of the new board has equal representation of men and women, and that 40% of members are independent directors.


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