Italy pushes to limit executive pay in listed state-run firms

·2-min read
FILE PHOTO: Italian Economy Minister Giorgetti at news conference in Rome

By Giuseppe Fonte

ROME (Reuters) - Italy's Treasury aims to limit the annual pay and golden handshakes of top bosses in listed state-controlled firms, a draft proposal seen by Reuters showed on Thursday.

Prime Minister Giorgia Meloni's right-wing government plans to include the commitment in broader legislation on welfare and labour measures approved this week, but still to be officially published.

Top managers' multi-million euro salaries and handsome bonuses have come into focus at a time when Italian families are struggling with an inflation rate that neared 9% in April, well above the euro zone average.

The gap between average hourly wages and consumer price inflation rate (CPI) increased in 2022 to 7.6 percentage points, the widest since 2001 when Italy adopted the EU-harmonised CPI index, data from statistics bureau ISTAT showed.

According to the government draft, the Treasury will work to "contain management costs" when shareholders vote on remuneration policies at state-controlled listed companies.

Rome also intends to prioritise variable components linked to company or individual performance rather than basic salaries, while also limiting payments due when contracts end or are curtailed.

The provision applies to appointments made after the legislation comes into force, the draft showed.

It is not clear if it will have an immediate impact on major state-run firms such as energy groups Eni and Enel, and defence group Leonardo, whose shareholders all meet next week to renew their boards.

Eni and Enel shareholders gather on May 10, while Leonardo's meet on May 8/9.

Bailed-out bank Monte dei Paschi di Siena (MPS) is not expected to be affected by the legislation, as its chief executive Luigi Lovaglio and chairman Nicola Maione were appointed last month.

Monte dei Paschi already applies curbs to executives' pay as a bank that was bailed out by the state in 2017.

Under terms agreed with European Union authorities, the total remuneration of any MPS executive may not exceed 10 times the average salary of its employees in 2022.

(Additional reporting by Gavin Jones; Editing by Gavin Jones and Christina Fincher)