Expert Corporate Governance Service (ECGS)
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Fiat Chrysler Automobiles April 12th, 2019

We have serious concerns over FCA's corporate governance, as it does not respect the "one share - one vote" principle, the Board does not have a majority of independent members (58% according to the Company but 42% as per our guidelines), and the controlling shareholder and executive Chairman chairs the Committee responsible for selecting nominees to the Board. Furthermore, since 2017 FCA has been involved in lawsuits concerning alleged violations with respect to the emissions control technology employed by the Company in the US. For all of the above mentioned concerns, we recommend that shareholders oppose the discharge of Board members (item 2.f).

Due to our serious concerns over the composition of the Board, we recommend that shareholders oppose the re-appointment of the executive Chairman Mr. John Elkann (item 3.a), the appointment of the CFO as executive Director in item 3.c (we also note that his appointment will replace an independent Director), and the re-appointment of representatives of the largest shareholder Exor (42% of votes with 29% of shares) Mr. Andrea Agnelli (item 4.c) and Mr. Tiberto Brandolini d'Adda (item 4.d).

We also recommend that shareholders oppose the re-appointment of non-executive Directors Mr. John Abbott (item 4.b) and Mr. Ermenegildo Zegna (item 4.i). Even though they are deemed independent by the Company, they are executives at business partners of subsidiaries and affiliates of FCA Group. Finally, we recommend opposing the re-appointment of the independent Director Ms. Valerie Mars (item 4.f), as we have concerns over her aggregate time commitments.

In items 6.1 and 6.2, we recommend opposing the authorization to increase the share capital by maximum 20% (10% under a general authority and 10% in connection with M&A transactions), as the power to eliminate pre-emptive rights exceeds the ECGS' voting policy limit of 10%. In item 6.3 we also recommend opposing the issue of special voting shares.

Fiat Chrysler Automobiles NV

Fiat Chrysler Automobiles is a holding company. Through its subsidiaries, Co. is an international automotive group engaged in designing, engineering, manufacturing, distributing and selling vehicles, components and production systems. Co. has operations in approx. 40 countries and sells its vehicles directly or through distributors and dealers in more than 140 countries. Co. designs, engineers, manufactures, distributes and sells vehicles for the mass market under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands and the SRT performance vehicle designation.


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