EUR 508.94 For Business Accounts Only

Proxy Report - 12/04/2018

In item 3.b, the AGM is called to appoint the Board of Directors on slates of nominees submitted by shareholders holding, even jointly, at least 0.5% of the share capital. Two slates of nominees have been submitted, respectively by the outgoing Board of Directors (sub-item 3.b.1: 15 nominees, including the non-executive Chairman, the CEO and 8 independent nominees as per our guidelines) and a group of institutional investors jointly holding 1.6% (sub-item 3.b.2, including 2 independent nominees).

One of the institutional investors that submitted the slate of nominees is Generali Investments, which is a client of ECGS partners Proxinvest and Frontis Governance. It is important to note that these partners do not provide consulting services to Generali. Voting advice is provided primarily as a source of information at general meetings. All slates include an adequate balance of independence, skills and experience to contribute effectively to the Board of the Bank. Due to the composition of the slates and the election mechanism, the voting result will not have any effects on the composition of the Board after the AGM (13 Directors will be drawn from the Board's slate and 2 Directors from the slate of the institutional investors). However, in our opinion a vote for the slate submitted by the Board may be perceived as a reward for the improvements made in the last years (improved independence and overall composition, transparent selection procedures), and an incentive to continue on this path and keep improving UniCredit's corporate governance. Hence, we recommend that shareholders vote for the slate submitted by the Board of Directors (sub-item 3.b.1).

In item 6, shareholders are called to a binding vote on the Bank's remuneration policy. The quality of disclosure is at the highest levels in Italy, as all performance conditions are disclosed, long-term targets are quantified and the Company disclosed the level of achievement of short-term targets. The amounts are reasonable (after the 40% decrease in the CEO and non-executive Chairman's fixed remuneration in 2017) and the executive variable remuneration is effectively structured to align the interests of executives and shareholders in the long term (the CEO's variable remuneration is exclusively based on a 3-year performance share plan). Therefore, we recommend approval.