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UBI Banca April 12th, 2019

The EGM held on 19 October 2018 approved the transformation of UBI Banca's corporate governance, from the two-tier to the one-tier system. The changes will be effective after the AGM.

In item 2, the AGM is called to appoint the members of the Board of Directors and the Audit Committee, on slates of nominees submitted by shareholders holding, even jointly, at least 1.0% of the share capital. The Board will comprise 15 Directors, 5 of which will be members of the Audit Committee. Only one slate of nominees was submitted, by a group of shareholders cumulatively holding 10.3% of shares (sub-item 2.1). Even though concerns may arise over the time commitments of 2 nominee members of the Audit Committee, the slate includes a majority of independent members (53% as per our guidelines and 67% according to the Company's self-assessment). Also taking into account that we have not identified specific concerns over the professional background of the candidates, we recommend that shareholders vote in favour.

In item 3, shareholders are called to a binding vote on the Bank's remuneration policy. The level of disclosure is at the highest levels in Italy, as all performance conditions are disclosed and long-term targets are quantified. We regret that the total variable remuneration is more focused on short-term results (weighing 60%), but it is adequately structured to align the interests of the executives with the creation of sustainable value in the long term: the payment of 60% of the CEO's 2019 bonus will be deferred for 5 years (i.e. paid in 2025) and subject to "malus conditions". We also appreciate that UBI Banca set the maximum ratio between variable and fixed remuneration below the maximum of 200% allowed under CRD IV. Also taking into account that severance payments are in line with our guidelines of 2 years of base salary, we recommend approval.

Ubi Banca

Unione Di Banche Italiane provides banking and financial products and services to its customers. Co. is involved in the implementation of the Private & Corporate Unity project, the union of the private and corporate banking commercial networks designed to develop synergies between the two customer segments. This service model is able to address financial issues relating to families, businesses, and the relationship between personal and business finance in a unified manner. Commercial operations are primarily focused on existing customers, which are provided by the branch network.


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