On January 16, 2014, following up on the decision by the World Motor Sport Council that confirmed Pirelli as sole supplier of tyres to the FIA Formula One World Championship, Pirelli announced that it had renewed that agreement with FIA. The duration of the agreement is three years, beginning with the 2014 season.
Pirelli will continue to define the tyre specifications and manage all aspects of their development, in close collaboration with FIA and the teams, and within the parameters established by the FIA Formula One Sporting and Technical Regulations.
On data February 28, 2014 Pirelli & C. S.p.A. and Bekaert announced that they had signed an agreement for sale of 100% of the Pirelli steel cord activities to Bekaert for an enterprise value of about euro 255 million. The sale of the steel cord business enables Pirelli to withdraw from a business which is too small to be competitive, and to focus on the premium tyre segment, which has higher profit margins. As part of the sale and purchase agreement, a long-term agreement was also made for long-term supply and joint development of products to boost R&D activities and guarantee that the transition to the new agreement will be consistent with the companies' respective growth and development plans.
The closing of the deal, which is subject to regulatory approval, is expected to take place in the second half of the year and affects all five of the Pirelli steel cord plants located in Italy, Turkey, Romania, China and Brazil.
On February 28, 2014 Pirelli & C. S.p.A. announced that effective December 31, 2013, it had closed the medium- long term management cash incentive plan – Long Term Incentive (LTI) – adopted in 2012 in support of the 2012-2014 three-year objectives without any pay-out, either full or pro-rated, of the three-year incentive. The Company announced that it had adopted a new plan – also applicable to all of management (about 330 participants) – related to the targets for the period 2014-2016 contained in the business plan presented on November 6, 2013. Consistently with the variable compensation mechanisms adopted internationally, the three-year LTI plan is also based on the performance of Pirelli stock (“TSR”) and makes it possible to align the interests of management with those of shareholders. Just like previous plans, the 2014-2016 plan is entirely self-funded, insofar as the related expenses are included in the financial figures of the business plan. Participants in the LTI Plan 2014-2016 include, inter alia, the Chairman and Chief Executive Officer of Pirelli & C., Marco Tronchetti Provera, the Deputy Chairman, Alberto Pirelli (as senior manager), the General Manager Operations, Gregorio Borgo, the key managers Maurizio Boiocchi (Chief Technical Officer), Maurizio Sala (Chief Planning and Controlling Officer), Francesco Tanzi (Chief Financial Officer and Financial Reporting Manager) and Christian Vasino (Chief Human Resources Officer).