ITALY Law and Practice Contributed by: Francesco Di Carlo and Filippo Raynaud, FIVERS Studio Legale e Tributario
3.10 Payments to Directors/Officers In an SRL and in a non-listed SPA the remuneration of directors and officers is generally determined by the shareholders, unless established in the by-laws, and is disclosed within the annual financial statements, on an aggregate basis. Failure to comply with the appli - cable approval requirements may result in the relevant remuneration being challenged and may give rise to restitution claims and directors’ liability, particularly where payments have been made without the required corporate approval or in breach of the company’s by- laws. Each listed SPA must issue a “remuneration report”, providing a comprehensive description of any remu - neration paid to each director and member of the board of statutory auditors, and in aggregate for other key personnel. Following the 2026 reform of the UFC, the remuneration policy must include, at least, the company’s policy with respect to directors, general managers, members of the control bodies, unless oth - erwise provided in the by-laws, strategic managers. The by-laws may also provide that the shareholders resolution on the remuneration policy is non-binding, the shareholders decision shall be made available to the public; furthermore, if the outcome of the share - holders meeting vote is negative, the company shall submit a new policy to shareholders no later than the next annual shareholders’ meeting approving the financial statement. The remuneration policy is sub - mitted to the shareholders’ meeting pursuant to the so called “say on pay” mechanism. In addition to the consequences outlined above with respect to SPAs generally, failures by listed companies to comply with the approval, procedural and disclosure requirements relating to remuneration policies and reports may also give rise to administrative sanctions under the UFC and the relevant Consob implementing regulations. Specific approval and disclosure requirements on directors’ remuneration apply to companies operat - ing in regulated businesses pursuant to sector laws (eg, banks, insurance companies and financial inter - mediaries).
as, in case of insolvency, by the officer responsible for the relevant insolvency proceeding. Parent Companies Where a company – either an SPA or SRL – controls and exercises direction and co-ordination over anoth - er company and there is a breach of the “principles of proper corporate and business management”, the directors of the parent company may be liable jointly with the parent company itself vis-à-vis: • the participants in the controlled entity, for any damages to the profitability and value of the par - ticipation; and • the creditors of the controlled entity, as to the capacity of the company to pay its debts). 3.9 Other Claims/Enforcement Against Directors/Officers In addition to the cases indicated above under 3.8 Breach of Directors’ Duties , in case of a breach of corporate governance requirements a director may also be subject to: • administrative fines, for breaches of specific cor - porate governance- related administrative obliga - tions (eg, omissions in the registration of corporate resolutions in the Companies’ Registry); and • criminal liability, for specific corporate-governance related criminal offences (eg, false communications to the public, fraudulent influence on the share - holder meeting). Criminal and administrative liability is generally non- waivable. On the other hand, civil liability for damages of a director vis-à-vis the company and shareholders may be mitigated through an insurance policy (so called “Directors and Officers” Insurance Policy). The shareholders may also decide to grant a waiver to the directors for any potential liability (eg, through a vote of the shareholder meeting), in relation to event and circumstances that occurred beforehand (whereas a pre-emptive discharge of liability is not admissible).
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