Report
Expert Corporate Governance Service (ECGS)
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Proxy Report - 10/03/2018

n item 4, we recommend to oppose the re-appointment of the Chairman-CEO Mr. Huertas Mejías, we have serious concerns over the excessive concentration of powers, also taking into account the lack of independent representation on the Board (40%).
In item 8, the Board proposes to amend the Regulations of the General Meeting by eliminating the power to approve the issue of non-convertible bonds. In our opinion, a mandatory shareholders' approval may prevent companies from excessive use, or any abuses, of debt instruments. Hence, we recommend opposition.
In items 9 and 10, we recommend to oppose the authorization to respectively issue convertible securities and to increase the share capital, because the maximum amount of shares to be issued without pre-emptive rights (up to 20% of the share capital) exceeds our voting policy limit (10%).
In item 11, the Board proposes to change the remuneration policy approved in 2016, by introducing the payment of attendance fees to the members of Board Committees. Pursuant to Spanish legislation, any changes to the 3-year remuneration policy shall be subject to a binding shareholders' approval. Although we agree that part of the non-executive Directors' compensation is linked to real attendance of meetings, we regret that no changes are proposed to the remuneration policy for executive Directors, despite the very high level of dissent of minority shareholders in 2016 (71.6% of against votes, excluding the shares of the controlling shareholder Fundación Mapfre). In particular, we regret that the Company has not disclosed the individual maximum amount of each variable remuneration component (on aggregate, the variable components are capped at 150% of the base salary in any year) and all relevant performance conditions. Furthermore, pension contributions are excessive (above 200% of the CEO's fixed remuneration in the last 3 years) and serious concerns may arise over the discretionary power of the Board in awarding severance payments, which are not included in the executive contract. Therefore, we recommend opposition. For the same reasons, we also recommend to oppose the Annual Remuneration Report (item 12 – advisory vote).

Underlying
Mapfre S.A.

Mapfre is an insurance company based in Spain. Co. is the parent company of a group engaged in the underwriting and provision of insurance in Spain and abroad. Insurance policies provided include: life, non-life, accident, home-owner, general and health. Through its subsidiaries, Co. is also engaged in the provision of reinsurance, the management of investment funds, pension funds and pension plans, real estate and related services. On the domestic market, Co.'s activities include managing investment funds, pension funds and pension plans, real estate and other service businesses.

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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As Managing Partner of Expert Corprate Governance Service Ltd (ECGS), Proxinvest has built a large network of corporate governance experts to support clients in corporate governance analysis worldwide. 

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Expert Corporate Governance Service (ECGS)

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