Italy demands more disclosure on pay, succession planning

Stung by the boardroom revolt last year at one of the country's largest financial institutions, Italy's securities regulator has decided it's time to demand much greater disclosure of executive pay and also plans for the succession of people in key posts. Consob issued a related package of new measures:

• Termination: Companies will need to have in place, in advance, terms of any indemnities in effect in the case of terminations from the board. All issuers are required to disclose the existence and main characteristics of these plans annually.
  
• Pay: All issuers are "invited" to implement more fully the existing rules on disclosure of pay, including the different elements of "emoluments for the office" and "other remuneration".
  
• Succession: :Large-capitalisation companies should disclose what plans, if any, they have for the replacement of executive directors and of the people involved in setting up the plans.

" Past experience has shown that the lack of complete and detailed information on key elements related to board functioning and incentive systems could harm investors and the correct operation of the financial system, reducing the attractiveness of the Italian market both for investors and for companies," it said.

Source document: The executive summary, in English, gives an overview of the decision.