Report
Expert Corporate Governance Service (ECGS)
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Jerónimo Martins, SGPS, S.A. - AGM 25 June 2020

The AGM was initially called on April 16, and postponed to June 25. The Agenda
remained the same, and the only change to proposed resolutions refers to the allocation
of net results (item 2). In light of the uncertainties related to the Covid-19 pandemic, the
Board resolved to reduce by 40% the dividend distribution originally proposed at the
cancelled AGM of April (€0.345 per share). Total dividend distribution will amount to
€130 million, corresponding to a pay-out of 33.4% on reported net income, which is
below the Company's policy to distribute from 40% to 50% of consolidated net
earnings. The proposed reduction in the dividend distribution proposed in April is in line
with ECGS' recommendation to postpone, reduce or suspend dividend payments, to
allow companies to avoid liquidity risks. Thus, we recommend shareholders to vote
FOR.
In item 4, shareholders are called to an advisory vote on the remuneration report. We
have serious concerns over the variable remuneration structure, because it exclusively
depends on annual results, with no deferred components or long-term incentive plans.
Furthermore, concerns may arise over the very high percentage of annual bonus
depending on a qualitative assessment of the Board (50%). Therefore, we recommend
opposition.

Underlying
Jeronimo Martins SGPS S.A.

Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

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Analysts
Expert Corporate Governance Service (ECGS)

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