Expert Corporate Governance Service (ECGS)
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Ferrari April 12th, 2019

We have serious concerns over Ferrari's corporate governance, as it does not respect  the "one vote - one share" principle, the Chairman holds executive powers and is also the Chairman of the Committee responsible for issuing proposals for appointments, and we have concerns over the poor functioning of the Board, which met only 3 times in 2018. Therefore, we recommend that shareholders oppose the discharge of Board members (item 2.f) and the appointment of the executive Chairman Mr. John Elkann (item 3.a).

In item 5, we recommend opposing the authorization to purchase treasury shares, due to serious concerns over the performance share plans adopted by the Company.

In item 7.a, we recommend that shareholders oppose the granting of performance shares to the CEO under the 2016-2020 incentive plan. The CEO was appointed in July 2018 and performance shares will vest in 2019, thanks to results mostly achieved in a period when Mr. Camilleri was not Group CEO. Furthermore, the vesting of 33% of shares will not depend on any performance conditions, and in our opinion the granting of shares is more similar to a "welcome bonus" than a long-term incentive.

In item 7.b, we also recommend that shareholders oppose the 2019-2021 incentive plan, as 27% of the incentive does not depend on performance conditions (restricted shares) and the maximum amount of the CEO's incentive is excessive in our opinion (€ 17.7 million at current share's price, equivalent to approximately 35.4 times his base salary).



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