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Expert Corporate Governance Service (ECGS)
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Proxy Report - 06/04/2018

In item 6, the Board proposes several changes to the remuneration policy. Pursuant to Spanish legislation, any amendments to the 3-year remuneration policy must be subject to a binding vote of shareholders. Main amendments are referred to changes in the benchmarking group used to set the fixed remuneration (11 disclosed European banks will be added to the group of 4 Spanish banks), the KPIs used to calculate the annual bonus (including "changes in troubled assets" and replacing "recurring operating expenses with "core efficiency ratio") and eliminating the possibility to pay interest or dividends accrued on performance shares before their vesting (as recommended by EBA's Guidelines). The overall variable remuneration amounts are reasonable, and we appreciate that CaixaBank set the maximum ratio between variable and fixed remuneration below the maximum of 200% allowed under CRD IV. However, we strongly regret that 50% of the executive Directors' bonus is based on undisclosed individual conditions, and the variable remuneration is not sufficiently linked to long-term results, as the long-term incentive is capped at 44% of the CEO's base salary on a 4-year performance period and the annual bonus is capped at 47% (the deferred component is subject to annual "malus conditions"). Therefore, we recommend opposition. For the same reasons, we recommend that shareholders oppose the 2017 Remuneration Report (advisory vote in item 10).

Underlying
CaixaBank

Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.

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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