What emerges from the minutes of the shareholders’ meeting of 29 April of the company that publishes Il Sole 24 Ore. The post by Gianni Dragoni del Sole taken from his blog Powers Weak
Seven of the ten shareholders who attended the Sole 24 Ore shareholders’ meeting rejected the report on the remuneration paid to the top management of the publishing group in 2019. One abstained. Two voted in favor: Confindustria which is the majority shareholder with 61.5% of the capital and Banor Sicav, a minority shareholder investor with 1.8%, but with a seat on the board of directors of the Sun.
This was enough to approve the report on remuneration by a very large majority, 99.826% of the capital represented at the shareholders’ meeting (equal to 63.36% of the total capital), since the opponents owned only 0.11% of the capital, equal to 0.174% of the actions taken. The outcome of the vote on the “remuneration policy” was similar: there were eight opposing shareholders (no abstentions), but also in this case only with 0.174% of the share capital. ASSEMBLY WITH CLOSED DOORS
The outcome of the votes is reconstructed in the minutes of the meeting of 29 April, made public at the end of May. The assembly took place behind closed doors. Like many other listed companies, Il Sole 24 Ore also used the rule of the Cura Italia decree which allows until 30 June to prevent the physical participation of shareholders in the assembly, to avoid gatherings. Thus, however, the possibility for shareholders to discuss the hottest issues is also limited. CONTRACTED VOTES
The votes against remuneration were not only those of journalists-employees-shareholders, who for years had disagreed on the policy of salaries for top executives while there are cuts further down. Two financial investors also voted against: Ensign Peak Advisors Inc. (with 42,869 shares, 0.066% stake) and iShares VII Plc (27,531 shares, 0.04% stake). CUTS TO EMPLOYEES
The report on remuneration has aroused criticism because, while restructuring plans are underway for graphic designers and polygraphs with layoffs and early retirement and there is a solidarity contract for journalists until June 30, moreover further cuts have been requested by the company for the next few months, the top management of the publishing company of the economic and regulatory newspaper (as well as of the Radiocor agency, of Radio24 and other newspapers) have returned to collect bonuses, that is, a prize for the results achieved in 2019 . ‘CEO
Chief Executive Officer Giuseppe Cerbone, in office since 1 August 2018, has a fixed salary of 546,798.47 euros gross per year. But last year he made more money. The remuneration report says that “the remuneration received by the chief executive officer, Mr. Giuseppe Cerbone, in the year 2019 was equal to € 636,798.47 gross “. This is because the board of directors, chaired by Edoardo Garrone, awarded him a prize, a bonus of 90,000 euros. THE FIGURES OF THE BUDGET
According to official balance sheet figures, the group’s economic results improved in 2019, but remain negative. The crisis, which affects many publishing groups, is not over. Consolidated revenues decreased by 6% to € 198.7 million, EBITDA net of the impact of the new accounting policies (IFRS 16) and non-recurring income and expenses worsened, and decreased from 9.5 to 5, 2 millions. The operating result (Ebit) net of IFRS 16 and non-recurring items is at a loss (-2.8 million) compared to +0.5 million in 2018. The net result is in the red, -1.2 million, even if the loss is less than -6 million in 2018. RENUNCIATION
The report on remuneration, approved by the board of directors on March 26, 2020, indicates that the CEO “Giuseppe Cerbone in 2019 voluntarily renounced all variable remuneration until 31 December 2019 (for an amount, in line with the 2018 Policy, up to 20% of the fixed component (…)), with the exclusion of any plans of long-term incentives (so-called LTI), in order not to affect the costs of the company, also in consideration of the persistence of solidarity agreements and in a market scenario not favorable to publishing, while reaffirming the validity of the variable component of remuneration “. THE PRIZE OF 90,000 EUROS
After the waiver of the variable, there was a reward for Cerbone. The report continues: “That said, the Nomination and Remuneration Committee (…) deemed the Chief Executive Officer deserving of treatment that would remunerate his commitment (…) and in particular with reference to the outcome of the strategic nature of completing the spin-off of Business School 24 Spa, preparing and submitting to the board of directors a proposal for guidelines for the allocation of an extraordinary bonus in favor of the chief executive officer. (…) providing in particular that upon the completion of the demerger process of Business School 24 Spa, a bonus of 90,000 euros would be assigned and attributed to the CEO (…) “. On December 19, the board of directors approved the allocation of the bonus,THE “MAXIMUM CONTRARITY” OF THE CDR
From this explanation, also read in the assembly by President Garrone to reply to the criticisms of the editorial committee of the newspaper, which intervened to express “maximum opposition” to the bonus, defined as “legitimate in legal terms” but “inappropriate in substance”, we understand that to the CEO a bonus was recognized because, in addition to the merits _ according to the board of directors _ for having advantageously renegotiated the sales contract of the training business unit, stipulated by the previous one to Franco Moscetti (sale of the residual 49% stake for 21.5 million, including the repurchase of the “Events branch”, not envisaged in the original contract), renounced the variable remuneration that could have reached 20% of the fixed salary, that is to 110,000 euros. The result is that with the “renunciation” of a maximum variable of 110. 000 euros for the year Cerbone got a bonus of 90,000. The report does not explain whether the CEO del Sole 24 Ore would have been entitled to variable remuneration, given that the economic results are in the red and the company continues to make cuts in employee costs.THE PRIZE FOR STRATEGIC MANAGERS
But the bonus was not only taken by Cerbone. From the report we learn that some “executives with strategic responsibilities” also received a bonus totaling 180,000 euros gross. At the beginning of 2019 these executives were 5, but two – the former personnel director Domenico Galasso and the former head of the lawyer Salvatore Lo Giudice – were “resigned”. They left the group on January 25, 2019 and, according to reports within the company, they did not get the bonus, which is usually awarded at the end of the year. ONE BONUS FOR THREE
During 2019 the “strategic” therefore remained in three: the Corporate and CFO general manager, Paolo Fietta, the System 24 general manager and Radio 24 business unit director, Federico Silvestri (from Ansa, like Cerbone who hired him) , the Deputy General Manager Publishing & Digital, Karen Nahum, a former employee of the group who was hired by Cerbone as an executive. According to internal sources, these three are the beneficiaries of the bonus for a total of € 180,000. The report does not explain how the sum is divided, nor for what results the prize was given. Nahum also has a personal position as a director of another listed company, Anima Holding, from which she received 60,000 euros in compensation in 2019. THE SALARY OF MANAGERS
The bonus is added to the fixed salary of strategic executives which, in the aggregate (there are no individual amounts), amounted to 724,992 euros gross in 2019. This figure includes the pay of almost a month each for the two executives released on January 25th, the rest and the paychecks of the three “strategists” who also received the bonus. The report does not show that bonuses were paid to the resigning. In total, therefore, the “strategic” received € 904,992.38 gross, a sum substantially to be divided between Fietta, Silvestri and Nahum, in addition to the January “month” of Galasso (who moved to Alitalia) and Lo Giudice (to Inwit, a group Telecom). DOSSIER TO BONOMI
The report does not say whether bonuses were paid in the newsroom. In May, the company asked the Cdr del Sole 24 Ore to cut journalists’ paychecks by 25% for the second half of 2020. The request was rejected immediately. The assembly of journalists has proclaimed a state of agitation and among the possible protest measures entrusted to the CDR there is a ten-day strike package. There is also all this in the Sole 24 Ore dossier which, as usual, is on the table of the new president of Confindustria, Carlo Bonomi.
