Report
Expert Corporate Governance Service (ECGS)
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Exor -AGM 29 May 2019

In item 2.e, the Board proposes to distribute a dividend of € 0.43 per share on 2018 results, corresponding to a pay-out ratio of 7.4%. ECGS notes that the Company's pay-out compares very unfavourably with 15 other listed European holding companies pay-out (weighted average of 44.0%). We also note that the free cash flow (€ 2'732 million) is ample and sufficient for re-investments. The parent company also has available retained earnings and reserves of € 5.5 billion as of 31 December 2018 to accommodate a more generous dividend. We therefore urge the Company to review its dividend policy to be more in line with peers. Accordingly, we recommend shareholders to oppose this resolution at this time.

In item 4.a, the Board proposes to discharge the Chairman-CEO of his responsibilities for their management of the Company in 2018. We have concerns over the Company's corporate governance, as it does not respect the "one share rone vote" principle: all shareholders that have registered their shares for at least 5 years are entitled to receive 4 additional voting rights per share (9 additional voting rights after 10 years). Concerns also arise over the combination of the Chair and CEO positions and the executive variable remuneration, as all the incentive plans active at the Company do not depend on any performance conditions. Also taking into account that shareholders do not have the right to regularly vote on the remuneration policy, we recommend opposition.

In item 5, we also recommend that shareholders oppose the authorization to purchase treasury shares. The terms of the authorization are in line with our voting policy limits (maximum 10% of the share capital and price of repurchase not exceeding 110% of the market price). However, treasury shares may be used to cover stock option plans not linked to any performance conditions (the Stock Option Plan 2008-2019 and the Stock Option Plan 2016), which is contrary to our guidelines.

Underlying
Exor NV

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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