MILAN — Sergio Marchionne's heirs are poised to receive as much as $90 million in Ferrari stock units based in part on the company's performance since the executive's death in July.
The heirs will inherit his stock incentive plan for the years 2016 to 2020, as shown in the 2018 remuneration report published this year by the maker of exotic autos. The beneficiaries could receive up to 675,000 Ferrari shares, currently worth €81 million ($90 million), under the company's equity incentive plan, if the stock outperforms luxury peers.
Marchionne and his wife, Orlandina, had two sons, Alessio Giacomo, born in 1989, and Jonathan Tyler, born in 1994. It has been reported in Italy that Sergio separated from Orlandina after he joined Fiat in 2004. But it is not publicly known whether the two divorced.
Ferrari's treatment of Marchionne's heirs is different from that of Fiat Chrysler Automobiles and CNH Industrial, the two other companies controlled by the Agnelli family and led by the charismatic executive who died July 25. FCA's and CNH Industrial's long-term equity incentive plans for Marchionne were approved in 2015 and 2014, and both ended Dec. 31, 2018. Neither company's 2018 report mentions Marchionne's heirs.
"Such a provision is clearly legal but very unusual in this form," said Francesco Rotondi, founder and partner of Italian law firm LabLaw. "The transfer to a manager's heirs of certain rights to incentive compensation is quite common among corporations when the incentives have already vested; in other cases, managers are often granted the right to a share in the performance of the company after they left. The contract between Ferrari and Mr. Marchionne, though, as described by the company's 2018 Remuneration Report, appears to envisage a sort of takeover by heirs of the manager's position in the incentive program."
A Ferrari spokesperson said, "No compensation was paid by Ferrari or any of its subsidiaries to Mr. Marchionne, who was beneficiary of the long-term incentive plan only" but declined to comment on the reasoning behind the structure of Marchionne's compensation.