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Expert Corporate Governance Service (ECGS)
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NXP Semiconductors - AGM 17 June 2019

In general, NXP Semiconductors ("NXP") is in compliance with the Dutch regulations relating to the organisation and procedures of the Annual General Meeting.

Under ITEMS 3a-3h, it is proposed to (re-)elect the board of directors.

In view of concerns over aggregate time commitments, ECGS recommends to vote OPPOSE to the re-election of: Mr. Josef Kaeser (ITEM 3d), Ms. Lena Olving (ITEM 3e), Ms. Julie Southern (ITEM 3g) and Mr. Karl-Henrik Sundström (ITEM 3j).

Under ITEM 5, the board of directors seeks approval of a LT incentive plan and the directors' fees. ECGS is categorically NOT in favour of this proposal for the following reasons: (i) first and foremost, it considers the maximum awards under the plan excessive and outrageous (the CEO was granted performance shares of almost USD 55 million in 2018, corresponding to approximately 4000% of annual base salary); (ii) the sole performance criterion attached to the LTIP is relative TSR and the peer group for benchmarking the Company's performance under the LT incentive plan is not disclosed; and (iii) contrary to provision 3.3.2 of the Dutch Corporate Governance Code, members of the board of directors receive share-based compensation.

In view of the above, ECGS strongly recommends to vote OPPOSE.

Under ITEM 6, the board of directors seeks authorisation to repurchase own shares. Since ECGS does not approve of the magnitude of the authority requested (up to 50% of share capital), it recommends to vote OPPOSE.

Finally, under ITEM 7, the board of directors seeks authority to reduce the Company’s share capital by cancellation of part of its holding of treasury shares. Although a reduction of share capital by cancellation of shares is a technical issue that does not negatively impact shareholder interests, ECGS considers the magnitude of the requested authorisation (up to 50% of Company’s share capital) excessive. Therefore, ECGS recommends to vote OPPOSE.

Underlying
NXP SEMICONDUCTORS NV

NXP Semiconductors is a holding company. Through its subsidiaries, Co. is engaged as a global semiconductor company and a long-standing supplier in the industry. Co. provides High-Performance Mixed-Signal and Standard Product solutions. Co.'s product solutions are used in automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. Co. engages with original equipment manufacturers (OEM) and sell products in all major geographic regions.

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Proxinvest
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