Expert Corporate Governance Service (ECGS)
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CNH Industrial April 12, 2019

We have serious concerns over the CNH Industrial's corporate governance, as it does not respect the "one share rone vote" principle: all shareholders that have registered their shares for more than 3 years are entitled to receive an additional voting right. The major shareholder Exor (41.7% of votes with 26.9% of shares) holds 92.6% of special voting shares. Concerns also arise over the composition of the Board, as the Chairperson holds executive powers, the Senior Non-Executive Director is not independent as per our guidelines, having collected more than 12 years of association with the Group, and there is not a majority of independent members (33% as per our guidelines and 67% according to the Company, which does not consider previous positions at Group companies in the tenure of Directors).

Due to the above mentioned concerns, we recommend that shareholders oppose the discharge of Board members (item 2.e), the re-appointment of the executive Chairwoman (item 3.a) and non-independent non-executive Directors Mr. Léo Houle (item 3.c), Mr. John Lanaway (item 3.d) and Mr. Jacques Theurillat (item 3.g). Due to our concerns over the Board composition, we also recommend that shareholders oppose the appointment of Mr. Alessandro Nasi (item 3.h), who is a member of the Agnelli family (controlling shareholder of Exor) and is a former executive of the Company (from 2005 to January 2019).

Cnh Industrial

CNH Industrial is a holding company. Through its subsidiaries, Co. is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for those vehicles and engines for marine and power generation applications. Co. divides its business activities into three operating segments: Agricultural Equipment, Construction Equipment, Commercial Vehicles, Powertrain, and Financial Services.


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