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Expert Corporate Governance Service (ECGS)
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CaixaBank – AGM 2 April 2020

In item 7, the Board asks for the authorization to increase the share capital by up to maximum 50%, with the power to exclude pre-emptive rights in connection with up to 20%. This limit shall not apply to capital increases that the Board may approve to meet the conversion of convertible bonds. The power to exclude pre-emptive rights to up to 20% of the issued share capital increase exceeds the ECGS' voting policy limit of 10%. Hence, we recommend opposition. 

In item 8, the Board asks for the authorization to acquire treasury shares representing, together with the treasury shares already held, no more than 10% of the issued share capital. The maximum price for repurchase will be up to 15% above the market price, which is above the ECGS' voting policy limit of 10%. Hence, we recommend opposition. 

In item 9, shareholders are called to a binding vote on the 2020-2022 Directors' remuneration policy. The overall variable remuneration is reasonable (the bonus is capped at 38% and the long-term incentive at only 7% of the CEO's fixed remuneration). However, we note that the CEO's fixed remuneration (€2,261,200) significantly exceeds the median at large European banks (€1,331,085) and at large Spanish companies (€1,197,000). We also strongly regret that 50% of the executive Directors' bonus is based on undisclosed individual conditions, and that most of the variable remuneration (84%) depends on annual results. Therefore, we recommend opposition. 

Due to the lack of disclosure of short-term performance conditions, and our concerns on the variable remuneration structure, depending more on annual than long-term results, we also recommend shareholders to oppose the advisory vote on the Annual Remuneration Report in item 14. 

Underlying
CaixaBank SA

Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.

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Expert Corporate Governance Service (ECGS)

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