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Expert Corporate Governance Service (ECGS)
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Proxy Rapport 21/06/2018

Item 4: Since there is no vote on Management Board members' remuneration in Austria, we take this opportunity to voice our concerns regarding the remuneration system currently in place at Raiffeisen Bank International AG which we consider has several shortcomings: The targets for the short-term incentive (STI) have not been adequately disclosed. Likewise, there is no disclosure provided on maximum amounts. Since financial year 2014, there is no long-term incentive (LTI) in place. Benefits in kind and pension provisions are not disclosed separately but included in the fixed and other remuneration respectively. Although we consider the absolute amounts paid to the Management Board members as still acceptable, we urge the Supervisory Board to review the remuneration system and bring it in line with international standards. In line with our guidelines we would in principle recommend opposing the discharge of the Chairmen of the Supervisory Board's Personnel Committee, Dr. Walter Rothensteiner (until 22 June 2017) and Mag. Erwin Hameseder (since 22 June 2017), in financial year 2017. As the discharge is proposed in a bundled resolution, however, we recommend shareholders to oppose the discharge of the Supervisory Board as a whole.

Item 5.1: We recommend to oppose the proposed increase in remuneration of the Supervisory Board as we assess the absolute amount of remuneration under the amended system as above market practice and consider the increase as not acceptable.

Item 6: KPMG Austria, Vienna, is proposed as auditor for the current financial year. Ratio of non-audit/audit fees was 38.48% during the year under review and 57.89% over a three-year aggregate period which exceeds our guidelines. Furthermore, we note that KPMG has audited the Company since at least the financial year 2005 (no earlier data available) which exceeds our maximum acceptable term of office. We therefore recommend opposing the re-election of KPMG as auditor.

Item 9: The Boards request approval to acquire the Company's own shares within legal boundaries (5% of share capital within 30 months) for trading purposes. The maximum consideration for the repurchased shares might be up to twice the closing price on the Vienna Stock Exchange on the last trading day preceding the acquisition which exceeds our guidelines. We therefore recommend opposing this proposal.

Underlying
Raiffeisen Bank International

Raiffeisen Bank International is a universal bank focusing on corporate and retail customers in Central and Eastern Europe (CEE) and on corporate customers in Austria. In CEE, Co. consists of a network of banks, leasing companies and financial service providers. In Austria, Co. is involved in corporate finance and export and trade finance banks. Co. provides services to customers in 2,800 branch offices. In the retail banking business, Co.'s product and service portfolio comprises inter alia credit services (mortgages, credit cards and personal loans), as well as payment transaction and current account package services. As of Dec 31 2014, Co.'s total assets amounted to Euro121.6 million

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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