UniCredit – AGM 09 April 2020
In item 3, the Board of Directors proposes to distribute a dividend of €0.63 per share on 2019 results (+133% as compared with last year's dividend). Although the proposed dividend distribution is in accordance with its guidelines, ECGS notes that UniCredit's target to significantly increasing the remuneration of shareholders (up to €8 billion in the 2020-2023 period, through a combination of cash dividends and share buy-backs) will be partially achieved through 8'000 job cuts, which will contribute for €1 billion. In our opinion, increasing shareholder remuneration by reducing employment is contrary to the Sustainable Development Goals, and in particular Goal 10 ("reduced inequality"), as also highlighted by Oxam's research "The G7's Deadly Sins" of August 2019.
In item 8, shareholders are called to a binding vote on the Bank's remuneration policy for the CEO and other executives with strategic responsibilities. The quality of disclosure is at the highest levels in Italy (all terms and performance conditions are disclosed and long-term targets are quantified), the amounts are reasonable 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 5-year performance share plan). Therefore, we recommend approval.
In item 10, the Board of Directors proposes to approve the 2020-2023 incentive plan, which will replace the expired 2017-2019 LTIP. The incentive will be entirely paid in shares and will depend on the level of achievement of disclosed targets in the 2020-2023 period (non-rolling plan). The CEO's incentive is capped at 200% of his fixed remuneration, and he is not entitled to receive other variable remuneration components. The payment of the incentive will be deferred over a 5-year period (i.e., from 2024 to 2028). All the terms and performance conditions are disclosed and quantified, and we welcome the improvements compared with previous incentive schemes (longer vesting and deferral periods). Therefore, we recommend approval.
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