In item 2, the Board proposes to distribute a total dividend of €0.328 per share on 2019 results. Total dividend distribution amounts to €3'334 million, and it is not fully covered by consolidated net earnings or free cash flow. In view of the recent events relating to Covid-19, ECGS is in favour of postponing decisions on the dividend, reductions or suspensions that would allow companies to avoid liquidity risks or not generate risk for their survival. Furthermore, we note that dividend distributions were not fully covered by generation of cash in the last 4 years. Also considering that the potential impact of the Covid-19 induced crisis is not yet known, we recommend opposition.

In item 6, the AGM is called to appoint the members of the Board of Directors on slates of nominees submitted by shareholders holding at least 0.5% of the share capital. Two slates of nominees have been submitted, respectively by the Ministry of Economy (23.6% of the share capital) and a group of institutional investors (2.2%).

One of the institutional investors that submitted the slate of nominees is Generali Investments, which is a client of ECGS partners Proxinvest and Frontis Governance. It is important to note that these partners do not provide consulting services to Generali. Voting advice is provided primarily as a source of information at general meetings.

We recommend shareholders to vote for the slate submitted by the institutional investors (sub-item 6.2), because all nominees in the slate are independent from the Company and its shareholders.

In item 10.1, shareholders are called to a binding vote on the remuneration policy. The quality of disclosure is at the highest levels in Italy (all performance conditions are disclosed and targets are quantified). However, we strongly regret that the Board resolved to further increase the CEO's base salary, substantially above the median in the European Utilities sector, with an inflationary effect on his total remuneration, which may amount up to €8'056'000 at maximum levels of performance (approximately 280% of the median CEO's remuneration at European peers). Therefore, we recommend opposition.