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Expert Corporate Governance Service (ECGS)
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Prudential PLC - AGM 16 May 2019

Demerger of M&GPrudential 

On 14 March 2018, the Company announced its intention to demerge M&GPrudential, the international savings and investments business formed by the merger of asset manager M&G and Prudential's UK and Europe insurance operations. The demerger will result in two separately listed companies. Should the demerger go ahead, shareholders will retain their shares in the Company and also receive shares in M&GPrudential. The Company aims to complete it by the end of 2019.  Several executives have left the Board in anticipation of the demerger, though they will continue on the executive committee. Please see the attached report for further details.

 Item 2: Approve the Remuneration Report

The remuneration structure is unsatisfactory. The size of the bonus and benefits are considered excessive.  The bonus payout does not clearly link pay with performance and there is a possibility for accelerated vesting of the LTI.  In addition, the Company operates various LTIPs under which awards without performance conditions can be made. Recruitment awards were paid during the year.  The quantum is excessive.  We recommend shareholders oppose.

 Item 15: Appoint the Auditors.

The auditor's tenure exceeds our tenure limit of 10 years.  KPMG have served as the Companyns auditors since 1999. While last year the Company said that it would begin an audit tender process in 2019 to select the auditor for the 2022 financial year, they now intend to begin the tender process in 2020 to select the auditor for the 2023 financial year.  We strongly recommend the rotation of the auditors as they have now served a twenty-year term.

Underlying
Prudential PLC

Prudential is a parent holding company. Co., together with its subsidiaries, is an international financial services group with its principal operations in Asia, the U.S. and the U.K. In Asia, Co. has operations in Hong Kong, Indonesia, Malaysia, Singapore and other markets. In the U.S., Co.'s principal subsidiary is Jackson National Life Insurance Company. In the U.K., Co. operates through its subsidiaries, primarily The Prudential Assurance Company Limited and M&G Investment Management Limited. Co. provides a range of retail financial products and services and asset management services throughout these territories.

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