In item 10, the Board of Directors proposes to approve a long-term incentive plan for the 2020-2025 period (three cycles of a 3-year vesting period each): 50% of the CEO's incentive shall be paid in cash and 50% in shares (30% in shares for other beneficiaries). The CEO's 2020-2023 incentive is capped at 144% of the base salary and will depend on reduction of energy intensity (40%), relative TSR (30%) and financial and operational indicators in line with the new Strategic Plan, to be approved in the coming months (30%). The Board will have the power to increase or decrease the final incentive by up to 20% based on a qualitative assessment of individual performance. We regret that the financial and operational indicators to be used for the 2020-2023 cycle of the Plan have not been defined yet. However, we understand that it is due to the necessity to link the incentive with the new Strategic Plan to be approved by the Board. In our opinion, the incentive plan is adequately structured to align the interests of executives with the creation of sustainable value in the long term, and it is also aligned with the Company's disclosed strategy to reduce its net carbon emissions to zero by 2050. Therefore, we recommend approval.

In item 11, shareholders are called to an advisory vote on the remuneration policy. All remuneration components and performance metrics are disclosed, including an ex-post disclosure of the achievement of targets. The CEO's variable remuneration is capped at 288% of his base salary (120% the annual bonus, 144% the 2020-2023 incentive and 24% under the "Share Purchase Plan"), which is in line with the ECGS' voting policy limit of 300%. Also, the maximum percentage of variable remuneration depending on qualitative assessments is in accordance with ECGS guidelines (20%). However, we have serious concerns over the non-executive remuneration, and in particular with the fixed fee paid to the Chairman, which is more than twice the median of the base salary of highest paid executives at Spanish and European peers, even more so as he no longer holds executive powers. We also consider the severance payments made to the former Corporate Secretary as significantly above market practice in Spain. Therefore, we recommend opposition.