Report
Expert Corporate Governance Service (ECGS)
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proxy report 18/07/2018

In item 4.b, the Board proposes to appoint Ms. Pilar López Álvarez, Chairwoman of Microsoft Spain, as independent non-executive Director. The appointment of Ms. López Álvarez will improve the independence (from 44% to 56%) and the gender diversity (from 22% to 33%). Also taking into account her professional background and aggregate time commitments, we recommend that shareholders approve her appointment for the statutory term of 4 years.


In item 5, shareholders are called to a binding vote on the remuneration policy to be adopted in the 2019-2021 period. The variable remuneration components are adequately structured to align the interests of the executives with those of the shareholders in the long term, but we have serious concerns over the excessive weight of discretionary assessments on the annual bonus (30%). We also find as excessive the base salary of the CEO (€ 3'250'000), significantly exceeding the median at Spanish large companies and Retail European sector, and which is used to calculate variable remuneration components and severance payments. Therefore, we recommend opposition. For the same reasons, we recommend that shareholders oppose the Annual Report on Directors' Remuneration (advisory vote in item 7).

Underlying
Inditex S.A.

Industria de Diseno Textil Inditex is the parent company of a group engaged in apparel and footwear manufacturing and retailing. The Group is made up of fashion retail chains, textile manufacturing, purchasing and fabric treating companies, logistics and construction companies which are responsible for store refits and manufacturing structure. Products include men's, women's and children's wear collections, footwear, and women's lingerie which are sold through the Group's retail store chains of: Zara, Kiddy's Class, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, and Oysho and Zara Home.

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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