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UNICREDIT S.P.A. (19/2018) Directors' Reports and other documents regarding the Ordinary and Extraordinary Shareholders' Meeting

Podstawa prawna: Inne uregulowania
Please find attached Directors' Reports and other documents published on UniCredit website on March 13, 2018, regarding the Ordinary and Extraordinary Shareholders' Meeting which will take place on April 12, 2018.

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  • Annex 2 to 2018 Group Compensation Policy
    2018 Compensation systems based on financial instruments for UniCredit Employees
    UniCredit Shareholders’ Meeting-April 2018


    2
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    3
    1. Introduction
    2. 2018 Group Incentive System
    2.1 Beneficiaries of the plan
    2.2 The reasons for the adoption of the plan
    2.3 The procedure for the adoption of the plan and the timeframe f or the
    assignment of the financial instruments
    2.4 The characteristics of the financial instruments assigned
    3. Execution of the “Group Compensation Systems”
    3.1 Beneficiaries of the plan
    3.2 The reasons for the adoption of the plan
    3.3 The procedure for the adoption of the plan and the timeframe for the
    assignment of the financial instruments
    3.4 The characteristics of the financial instruments assigned
    4. Execution of the “2016 Employee Share Ownership Plan of UniCredit Group”
    4.1 Beneficiaries of the plan
    4.2 The reasons for the adoption of the plan
    4.3 The procedure for the adoption of the plan and the timeframe f or the
    assignment of the financial instruments
    4.4 The characteristics of the financial instruments assigned
    Index
    UniCredit • Annex 2 to 2018 Group Compensation Policy


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    Pursuant to the provisions set forth in Article 114-bis of legislative decree no. 58 of February 24, 1998 as well as
    to the provisions for the issuers adopted by CONSOB under resolution no. 11971 of May 14, 1999 (the “Issuers
    Regulations”) regarding the information to be disclosed to the market in relation to the granting of awarding plans
    based on financial instruments, the Board of Directors of UniCredit (the Board of Directors) prepared this informative
    memorandum (“Informative Memorandum”) which will be reported to the Ordinary General Shareholders Meeting
    of UniCredit on April 12, 2018 which is called to resolve, inter alia, upon the approval for 2018 of the following new
    incentive plan:
    • “2018 Group Incentive System ” which provides for the allocation to a selected beneficiaries of Group employees
    that cover key positions of an incentive in cash and/or UniCredit free ordinary shares, over a multi-year period upon
    specific ways described hereafter and subject to the achievement of specific performance conditions.
    This Informative Memorandum-prepared in compliance with Scheme 7 of Annex 3A to the Issuers Regulation - has
    also been prepared for the purpose of giving information concerning the e xecution of the following plans already
    approved by the General Shareholders Meeting of April 20, 2017, April 14, 2016, May 13, 2015, May 13, 2014, May
    11, 2013:
    • “Group Compensation Systems” providing for the grant of free shares to a selected number of Group employees,
    according to the modality described below and subject to the achievement of specific performance conditions:
    - 2017 Group Incentive System
    - 2017-2019 LTI Plan
    - 2016 Group Incentive System
    - 2015 Group Incentive System
    - 2014 Group Incentive System
    - 2013 Group Incentive System
    • “2016 Share Ownership Plan for the Employees of UniCredit Group (“Let’s Share for 2017”) aiming at offering
    to employees of the Group the possibility to invest in UniCredit shares at favorable conditions.
    Pursuant to the definition set forth in Article 84-bis of the Issuers Regulation, the above mentioned incentive plans, in
    consideration of their beneficiaries, have the nature of “relevant plans”.
    1. Introduction
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    5
    In compliance with Bank of Italy provisions set forth in Circular 285, December 17, 2013 (Section Disposizioni di
    vigilanza per le Banche”)-7th update of November 18, 2014, First Part, Title IV, Chapter 2, implementing the Capital
    Requirements Directive 2013/36/EU (CRD 4) for the section concerning remuneration policies and in line with the
    guidelines issued by European Banking Authority (EBA), UniCredit defined compensation systems based on financial
    instruments in order to align shareholder and management interests, reward long term value creation, share price
    appreciation and motivate and retain key Group resources. For this purpose it has been proposed the adoption of
    the Plan “2018 Group Incentive System” (hereinafter also the “2018 System”), which provides for the allocation
    of an incentive-in cash and/or free UniCredit ordinary shares-to be granted in a multi-year period, subject to the
    achievement of specific performance objectives.
    2.1 Beneficiaries of the plan
    The employees of UniCredit and of its parent companies or subsidiaries that benefit from the 2018 Group Incentive
    System are about 1.100, including Group Executives and other selected roles whose activities have impacts on Bank’s
    risks as specified in section 2.1.2.
    On the basis of the criteria established by Shareholders Meeting, the Board of Directors will be delegated to identify
    the actual beneficiaries belonging to the categories described in this section 2.1.
    2.1.1 Indication of the name of beneficiaries who are members of the board of directors of
    UniCredit and of the companies directly or indirectly controlled by UniCredit
    Mr. Jean Pierre Mustier, CEO of UniCredit, is not among the beneficiaries of the 2018 Group Incentive System.
    It is worth mentioning that certain potential beneficiaries of the 2018 Group Incentive System, in addition to the
    exercise of the managing powers connected to their offices, held offices in Management Bodies of companies, directly
    or indirectly controlled by UniCredit. Since these individuals are amongst the beneficiaries of the 2018 Group Incentive
    System as employees of UniCredit Group, no information as to their name is provided hereto and reference shall be
    made to the information provided below.
    2.1.2 The categories of employees or collaborators of UniCredit and companies controlling or
    controlled by this issuer
    The employees of UniCredit and of its parent companies or subsidiaries that are defined as Identified Staff and benefit
    from the 2018 Group Incentive System are defined based on criteria provided by European Banking Authority (EBA)
    regulatory technical standards issued on 2014, as follows:
    • Chief Executive Officer (CEO) and General Manager (GM), Senior Executive Vice Presidents (SEVP), Executive Vice
    Presidents (EVP), Senior Vice Presidents (SVP), Board members of relevant and identified Group Legal Entities
    • Employees of the Group with total remuneration higher than Euro 500,000 in 2017
    • Employees included within 0.3% of staff with the highest remuneration at Group level
    • Employees whose remuneration is within the remuneration bracket of senior management and other risk takers at
    Group level
    • Other selected roles of the Group (defined also during possible future hiring processes)
    2. 2018 Group Incentive System
    UniCredit • Annex 2 to 2018 Group Compensation Policy


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    2.1.3 Individuals who benefit from the Plan belonging to the following groups:
    a) General Managers of UniCredit
    Mr. Gianni Franco Papa, General Manager of UniCredit, is not among the beneficiaries of the 2018 Group Incentive
    System.
    b) Other executives with strategic responsibilities of the financial instrument issuer (not classed as “small”, in
    accordance with Article 3, paragraph 1, letter f ) of Regulation no. 17221 of 12 March 2010), if they have, during
    the course of the year, received total compensation (obtained by adding the monetary compensation to the
    financial instrument-based compensation) in excess of the highest total compensation assigned to the members
    of the board of directors or management board, and to the general managers of the financial instrument issuer
    None of UniCredit Executives meets the description; therefore no information is provided in connection thereto.
    c) Natural persons controlling UniCredit, who are employee or collaborator of UniCredit
    No natural or legal individual controls UniCredit and, therefore, no information is provided in connection thereto.
    2.1.4 Description and numerical indication, broken down according to category:
    a) Executives with strategic responsibilities other than those specified under lett. b) of paragraph 2.1.3
    Amongst the beneficiaries of the 2018 Group Incentive System there are no. 8 Executives of UniCredit who have
    regular access to privileged information and are authorized to take resolutions capable of influencing the development
    and prospects of UniCredit:
    • the Co-Chief Operating Officer, Mr. Ranieri de Marchis and Mr. Francesco Giordano
    • the Group Chief Risk Officer, Mr. T. J. Lim
    • the Group Chief Lending Officer, Mr. Andrea Varese
    • the Head of Group Human Capital, Mr. Paolo Cornetta
    • the Group Compliance Officer, Mr. Carlo Appetiti
    • the Head of Group Legal, Mr. Gianpaolo Alessandro
    • the Head of Internal Audit, Mrs. Serenella De Candia
    b) In the case of “small” companies, in accordance with Article 3, paragraph 1, letter f ) of Regulation no.
    17221 of 12 March 2010, the indication for the aggregate of all ex ecutives with strategic responsibilities of the
    financial instrument issuer
    This provision is not applicable.
    c) Other categories of employees or collaborators for which different characteristics are envisaged for the plan
    (e.g. executives, middle management, employees etc.)
    There are no categories of employees to which different characteristics of the 2018 Group Incentive Systems apply.
    2.2 The reasons for the adoption of the plan
    2.2.1 The targets which the parties intend to reach through the adoption of the plan
    The 2018 Group Incentive System aims to attract, retain and motivate Group beneficiaries in compliance with national
    and international regulatory requirements with the aim to define - in the i nterest of all stakeholders - incentive
    systems in line with long term company strategies and goals, linked to Group results, adjusted in order to consider
    all risks, in coherence with capital and liquidity levels needed to cover the activities in place and, in any case, able to
    avoid misleading incentives that could drive to regulatory breaches or to assume excessive risks for the bank and the
    system in its whole.
    The 2018 Group Incentive System is compliant with Group compensation policy and with the most recent national and
    international regulatory requirements providing for:
    • allocation of a variable incentive based on available bonus pool, individual performance evaluation of the beneficiary,
    internal benchmark for specific roles/markets and bonus cap as set by the Ordinary Shareholder’s meeting;
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    7
    • definition of a balanced structure of upfront (done at the moment of performance evaluation) and deferred
    payments, in cash and in shares;
    • distributions of share payments with share retention periods (a retention period on upfront shares of 2 years and of 1
    year for deferred shares);
    • risk adjusted metrics in order to guarantee long-term sustainability with respect to company’s financial position and
    to ensure compliance with regulatory expectations;
    • a malus condition (Zero Factor) that will be applied in case specific thresholds (profitability, capital & liquidity)
    are not met both at Group and Country/Division levels. In particular, the Bonus Pool of 2018 will be zeroed, while
    previous systems deferrals could be reduced from 50% to 100% of their value, based on final effective results and
    dashboard assessments done by the Group Risk Management function.
    2.2.2 Principal factors of variation and performance indexes taken into account for the
    assignment of plans based on financial instruments
    Individual bonuses will be allocated managerially based on available bonus pool, individual performance evaluation of
    the beneficiary and internal benchmarking for specific roles/markets.
    Individual performance appraisal is based on specific goals, linked to the UniCredit “Five Fundamentals” of
    Competency Model: “Customers First”, “People Development”, “Cooperation and Synergies”, “Risk Management”,
    “Execution and Discipline” .
    Incentive payouts shall be made over a multi-year period, subject to continuous employment at each date of payment
    and as follows:
    • in 2019 the first installment of the overall incentive will be paid in cash and/or shares in absence of any individual
    values/compliance breach, considering also the gravity of any internal/external findings (i.e. Audit, Bank of Italy,
    Consob and/or analogous local authorities);
    • the remainder of the overall incentive will be paid in several installments in cash and/or UniCredit free ordinary
    shares during the period
    - 2020-2024 for Executive Vice President and above and other Identified staff with bonus equal or higher than Euro
    500,000;
    - 2020-2023 for Senior Vice President and other Identified staff with bonus lower than Euro 500,000.
    - each tranche will be subject to the application of the Zero Factor for the year of allocation and in absence of any
    individual/values compliance breach, considering also the gravity of any internal/external findings (i.e. Audit, Bank
    of Italy, Consob and/or analogous local authorities).
    2.2.3 The factors assumed as basis for the determination of the compensation based upon
    financial instruments, or the criteria for the determination of the aforesaid compensation
    In 2018 System the link between profitability, risk and reward is assured by linking directly bonus pools with company
    results (at Group and Country/Division level) cost of capital and risk profiles relevant for the Group as stated in the
    Group Risk Appetite Framework.
    At this stage, the 2018 Group Incentive System does not contain an exact indication of the value of free shares to be
    actually allocated to the beneficiaries, rather it merely fixes the maximum number of free shares to be issued with
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    8
    reference to the Plan. In any case, there is the indication of the criteria to be followed by the Board of Directors for the
    determination of the actual number of beneficiaries and the number of free shares to be granted in the resolutions
    that after the Annual Shareholders’ Meeting approval will execute the Plans.
    The 2018 Group Incentive System provides that in 2019 it will be formulated the promise to pay the incentive in
    cash and shares. The percentages of the payments in cash and shares are linked to the beneficiaries’ categories as
    described in the following points of this document. The final evaluation of sustainable performance parameters and
    risk-reward alignment will be reviewed by the Remuneration Committee and the Board of Directors of UniCredit.
    2.2.4 The reasons justifying the decision to assign compensation plans based on financial
    instruments not issued by UniCredit, such as financial instruments issued by its subsidiaries,
    its parent companies or third parties; in the event the aforesaid financial instruments are not
    negotiated on regulated markets, the issuer shall provide information as to the criteria adopted
    for the calculation of the value attributable to such financial instruments
    The 2018 Group Incentive System does not contemplate the allocation of similar financial instruments. Nevertheless
    it is forseen the possibility for the Countries to submit to the Holding Company non-binding opinion requests, in order
    to localize the System on the bases of the local law and regulatory requirements that could imply the adoption of
    financial instruments issued by the single company and different from UniCredit shares.
    2.2.5 The evaluations, with respect to the relevant tax and accounting implications, taken into
    account in the definition of the plans
    The 2018 Group Incentive System definition has not been influenced by significant tax or accounting consideration. In
    particular, the tax and social securities regime applied to the free shares allocated will be consistent with legislation in
    place in the countries where the beneficiary is fiscally resident.
    2.2.6 The indication as to whether the plan enjoys any support from the special fund for
    encouraging worker participation in the companies, as provided for under Article 4, paragraph
    112, of Law December, 24 2003 n. 350
    The 2018 Group Incentive System is not currently supported by the special fund for encouraging worker participation
    in the companies, as provided for under sect. 4, paragraph 112, of Law December 24, 2003 n. 350.
    2.3 The procedure for the adoption of the plan and the timeframe for the
    assignment of the financial instruments
    2.3.1 Powers delegated to the board of directors by the shareholders’ meeting for the
    implementation of the plan
    The best solution identified to execute the 2018 Group Incentive System is to delegate to the Board of Directors,
    pursuant to Article 2443 of the Civil Code, the faculty to increase share capital as described in the Director’s Report
    presented to the Extraordinary Shareholders’ Meeting called for on April 12, 2018 (in single call).
    In force of this delegation, the Board of Directors could resolve on one or more occasions for a maximum period of five
    years-to carry out a free capital increase, as allowed by Article 2349 of the Italian Civil Code, for a maximum nominal
    amount of 8,200,000 UniCredit ordinary shares, to be granted to the pre-selected employees of the Holding Company
    and of Group banks and companies. Such an increase in capital shall be carried out using the special reserve known as
    “Provisions Linked to the Medium Term Incentive System for Group Personnel” set up for this purpose and reinstated or
    increased each year or in accordance with other methods dictated by applicable laws and regulations.
    Related to Article 2443 of Civil Code that provides that the Directors can exercise the right to carry out a free capital
    increase for a maximum period of five years starting from the date when the Shareholders’ meeting resolution providing
    the delegation of power has been registered and therefore-regarding the date of the AGM resolution-until 2023, in order
    to assign last share installment provided for 2024 it will be necessary to submit to a future AGM approval a proposal
    aimed at integrating the delegation of power already provided to the Board of Directors so that the implementation of
    2018 System can be completed.
    The number of shares to be allocated in the respective installments (as described in § 2.4.1.) shall be defined in 2019,
    on the basis of the arithmetic mean of the official market closing price of UniCredit ordinary shares during the month
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    9
    preceding the Board resolution that evaluates 2018 performance achievements. The allocation of a maximum number
    of 9,000,000 UniCredit ordinary shares is proposed, representing about 0.40% of UniCredit share capital, of which
    maximum no. of 1,800,000 UniCredit ordinary shares devoted to the payment of so called “bonus buy-out”, of other
    variable remuneration and to the severance payments. In case the amount of the “Provisions Linked to the Medium Term
    Incentive System for Group Personnel” does not allow the issuance (full or partial) of UniCredit ordinary shares to serve
    the 2018 System, an equivalent amount in cash will be allocated to the beneficiaries, determined in base of arithmetic
    mean of the official market closing price of UniCredit ordinary shares during the month preceding the Board resolution
    that evaluates 2018 performance achievements.
    2.3.2 Indication of the individuals in charge of the management of the plan, their powers authority
    The Organizational Unit “Reward & Benefits” of the Holding is in charge for the management of the 2018 Group Incentive
    System.
    2.3.3 Procedures for the amendment of the plans, if any, also in connection with potential
    variation of the original targets
    No specific procedures for the amendment of the 2018 Group Incentive System are provided for, other than the power of
    attorney that is provided by the Shareholders’ Meeting to the Chairman and the Chief Executive Officer, also separately,
    to possibly make changes to the 2018 System.
    2.3.4 Description of the modalities for the determination of the availability and assignment of the
    financial instruments contemplated by the plan
    The best solution identified to execute the 2018 Group Incentive System is to delegate the Board of Directors, pursuant to
    Article 2443 of the Civil Code, the faculty to increase share capital as described in the Director’s Report presented to the
    Extraordinary Shareholders’ Meeting called for on April 12, 2018 (in single call).
    In force of this delegation, the Board of Directors could resolve on one or more occasions-for a maximum period of five
    years-to carry out a free capital increase, as allowed by section 2349 of the Italian Civil Code, for a maximum nominal
    amount of 8,200,000 UniCredit ordinary shares, to be granted to pre-selected employees of the Holding Company and
    of Group banks and companies. Such an increase in capital shall be carried out using the special reserve known as
    “Provisions Linked to the Medium Term Incentive System for Group Personnel” set up for this purpose and reinstated or
    increased each year or in accordance with other methods dictated by applicable laws and regulations.
    Related to Article 2443 of Civil Code that provides that the Directors can exercise the right to carry out a free capital
    increase for a maximum period of five years starting from the date when the Shareholders’ meeting resolution providing
    the delegation of power has been registered and therefore-regarding the date of the AGM resolution-until 2023, in order
    to assign last share installment provided for 2024 it will be necessary to submit to a future AGM approval a proposal
    aimed at integrating the delegation of power already provided to the Board of Directors so that the implementation of
    2018 System can be completed.
    The number of shares to be allocated in the respective installments (as described in § 2.4.1.) shall be defined in 2019,
    on the basis of the arithmetic mean of the official market closing price of UniCredit ordinary shares during the month
    preceding the Board resolution that evaluates 2018 performance achievements. The allocation of a maximum number
    of 9,000,000 UniCredit ordinary shares is proposed, representing about 0.40% of UniCredit share capital, of which
    maximum no. of 1,800,000 UniCredit ordinary shares devoted to the payment of so called bonus “buy out”, of other
    variable remuneration and to the severance payments.
    Over the period 2020-2024 each tranche of UniCredit ordinary shares will be subject to the application of the Zero
    Factor for the year of allocation and in absence of any individual/values compliance breach, considering also the
    gravity of any internal/external findings (i.e. Audit, Bank of Italy, Consob and/or analogous local authorities).
    Payouts in shares comply with the applicable regulatory provisions in terms of holding period.
    2.3.5 The influence exercised by each director in the determination of the characteristics of
    the plans; the potential conflict of interest which may trigger the obligation for the relevant
    director to abstain from exercising his vote in the relevant resolution
    In the determination of the essential characteristics of the 2018 Group Incentive System proposed to the Shareholders’
    Meeting, the Board of Directors followed the guidelines and criteria elaborated by the Remuneration Committee of
    UniCredit.
    UniCredit \225 Annex 2 to 2018 Gr


    10
    Even if the CEO of UniCredit is not among the beneficiaries of the 2018 Group Incentive System, he abstained from
    participating in the definition of the 2017 Group Incentive System.
    2.3.6 The date on which the board of directors resolved upon the assignment of the financial
    instruments contemplated by the plan
    The Board of Directors, on January 9, 2018 approved the proposal related to the 2018 Group Incentive System to be
    submitted to UniCredit Shareholders’ Meeting.
    Furthermore, in exercising the delegation received by the Shareholders’ Meeting, as described in point 2.3.1, the Board
    of Directors will resolve in one or more occasions to allocate the financial instruments related to the 2018 Group
    Incentive System.
    2.3.7 The date on which the remuneration committee resolved upon the Plan of UniCredit
    The Remuneration Committee of UniCredit on January 8, 2018 positively resolved upon the criteria and the
    methodology elaborated for the definition of the 2018 Group Incentive System, sharing the reasons and motivations
    thereof.
    2.3.8 The market price of UniCredit ordinary shares, on the dates mentioned in points 2.3.6 and 2.3.7
    The market price of UniCredit ordinary shares, registered on the date of Board of Directors approval of 2018 Group
    Incentive Systems proposal (January 9, 2018) and on the date of the decision made by the Remuneration Committee
    of UniCredit (January 8, 2018), resulted equal to Euro 16.4762 and to Euro 16.3662.
    2.3.9 In which terms and modalities UniCredit takes into account, in the determination of the
    timeframe for the assignment of the plans, of the possible time-coincidence between:
    • such assignment or the decision, if any, adopted thereon by the Remuneration Committee, and
    • the dissemination of relevant information, if any, pursuant to sect. 114, paragraph 1 of Legislative Decree
    58/98; for instance, in cases in which such information is:
    a) not already public and capable to positively affect the market quotation, or
    b) already published and capable to negatively affect the market quotation
    In relation to the foregoing it is clarified that the resolution of the Board of Directors which approved the proposal to
    be submitted to the Shareholders’ Meeting has been communicated to the markets, in compliance with the current
    regulations. It is also clarified that analogous information to the market, if required, will be made available upon any
    other following resolution adopted by the Board of Directors of the 2018 Group Incentive System.
    It is worthwhile clarifying that, although all the resolutions adopted by the Board of Directors are subject to the prior
    positive opinion of the Remuneration Committee of UniCredit, the information to the market-where due-is given only
    after the relevant resolution of the Board of Directors.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


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    2019 2020 2021 2022 2023 2024
    EVP & above & other
    Identified staff with bonus
    ≥500k A 20%
    cash
    10%
    cash
    20%
    shares
    10%
    shares
    10%
    shares
    20%
    cash
    + 10%
    shares
    SVP & other Identified staff
    with bonus <500k 30%
    cash
    10%
    cash
    30%
    shares
    10%
    cash +
    10%
    shares
    10%
    shares -
    A. Including direct reports to strategic supervisory, management and control bodies and other Identified staff as required by local regulation
    2.4 The characteristics of the financial instruments assigned
    2.4.1 Description of the compensation plan
    The individual bonuses will be assigned on the basis of defined bonus pool, of the individual performance evaluation
    of the beneficiary, of internal benchmark for specific roles/markets.
    Individual performance appraisal is based on specific goals, linked to the UniCredit Five Fundamentals of Competency
    Model: “Customers First”, “People Development”, “Cooperation and Synergies”, “Risk Management”, “Execution and
    Discipline” .
    The achievement of Group performance parameters and risk-reward alignment will be reviewed by the Remuneration
    Committee and the Board of Directors of UniCredit.
    The 2018 Group Incentive System provides that in 2019 the Board of Directors-once verified the achievement of the
    goals defined for 2018-will define the percentage of payments in cash and shares established for each category of
    beneficiaries, as illustrated in the table below:
    The number of shares to be allocated in the respective installments shall be defined in 2019, on the basis of the
    arithmetic mean of the official market closing prices of UniCredit ordinary shares during the month preceding Board
    resolution that evaluates 2018 performance achievements. The maximum number of UniCredit free ordinary shares
    is estimated at 9,000,000, representing about 0.40% of UniCredit share c apital, of which maximum no. of 1,800,000
    UniCredit ordinary shares devoted to the payment of so called bonus “buy-out”, of other variable remuneration and to
    the severance payments.
    Payouts in shares comply with the applicable regulatory provisions in terms of holding period.
    2.4.2 Indication of the time period for the implementation of the plan also indicating different
    cycles, if any, of its implementation
    Incentive payouts shall be made over a multi-year period (2019-2024) in a balanced structure of upfront (following
    the moment of performance evaluation) and deferred payments, in cash and in shares, subject to continuous
    employment at each date of payment. The free shares related to the 2018 Group Incentive System will be allocated by
    UniCredit in multiple installments (as shown in the table above) subject to the 2018 Bonus approval in 2018 by the
    Board of Directors.
    2.4.3 The termination date of the plan
    The 2018 Group Incentive System will lapse by July 2024.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    12
    2.4.4 The overall maximum number of financial instruments, also in the form of options,
    assigned over any fiscal years with respect to the beneficiaries namely identified or identified by
    categories, as the case may be
    The maximum number of shares is estimated at 9,000,000, representing about 0.40% of UniCredit share capital, of
    which maximum no. of 1,800,000 UniCredit ordinary shares devoted to the payment of so called bonus “buy-out”,
    of other variable remuneration and to the severance payments. For the assignment of the last installment of shares
    planned for 2024 it will be submitted to one of the future Shareholders’ meetings the proposed integration of the
    power of attorney, already provided to the Board of Directors, so that the implementation of 2018 System can be
    completed. At this stage it is not possible to indicate the maximum number of free shares allocated in each fiscal year
    during the life of the 2018 Group Incentive System, since the actual definition will be done by the Board of Directors
    on the basis of the criteria approved by the Shareholders’ Meeting.
    2.4.5 The procedures and clauses for the implementation of the plan, specifying whether
    the assignment of the financial instruments is subject to the satisfaction of certain specific
    conditions and, in particular, to the achievement of specific results, including performance
    targets; a description of the aforesaid conditions and results
    Bonus Pools are set as a percentage of specific funding KPI (i.e. NOP pre-bonus) at Countries/Divisions level and
    considering the “Entry Condition” criteria assessment (based on the evaluation of both Group and Country/Division
    risk-adjusted forecasted results) and local risk and performance assessment.
    The “Entry Condition” is the mechanism that determines the possible application of the malus condition (Zero Factor)
    based on profitability, capital and liquidity KPIs set at Group and Country/Division level. In particular, the Bonus Pool
    of 2018 will be zeroed, while previous systems deferrals could be reduced from 50% to 100% of their value, based on
    final effective results and dashboard assessments done by the Group Risk Management function.
    In order to align to regulatory requirements, in case level set KPIs are not met both at Group and Country/Division,
    a Zero Factor will apply to the Executives/Identified Staff population whereas for below-Executives, a significant
    reduction will be applied. In case Zero Factor is not activated, Bonus Pool adjustments will be applied within pre-set
    ranges based on the assessment of local & Group performance and risk factors.
    In case Country/Division is in a malus condition and Group not, a floor will be defined for retention purposes and in
    order to maintain the minimum pay levels needed to play in the market.
    2.4.6 Indication of the restrictions on the availability of the financial instruments allocated
    under the plan or of the financial instruments relating to the exercise of the options, with
    particular reference to the time limits within which the subsequent transfer of the stocks to the
    issuer or third parties is permitted or prohibited
    The Board of Directors of UniCredit could establish to assign-for the 2018 Group Incentive System-free UniCredit
    ordinary shares that will be freely transferable at the end of the shares retention period, or in the year of the
    assignment, but subject to restrictions on the transfer for the foreseen shares retention period (a retention period on
    upfront shares of 2 years and of 1 year for deferred shares).
    2.4.7 Description of any condition subsequent to the plan in connection with the execution, by
    the beneficiaries, of hedging transactions aimed at preventing the effects of potential limits
    to the transfer of the financial instruments assigned there under, also in the form of options,
    as well as to the transfer of the financial instruments relating to the exercise of the aforesaid
    options
    In accordance with national and international regulatory guidelines and the Group Compensation Policy, beneficiaries
    are required not to use personal hedging strategies or remuneration and liability-related insurance to undermine the
    risk alignment effects embedded in their remuneration arrangements. Involvement in any form of hedging transaction
    shall be considered in breach of Group compliance policies and therefore the relevant rights under the Plan shall
    automatically expire.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    13
    2.4.8 Description of the consequences deriving from the termination of the employment or
    working relationship
    The 2018 Group Incentive System provides that the Board of Directors will have the faculty to identify, in the
    resolution that will execute the 2018 System, the termination of the beneficiary with the relevant Group employing
    Company, as a cause for the expiring of the right to receive the free shares.
    2.4.9 The indication of any other provisions which may trigger the cancellation of the plan
    The 2018 Group Incentive System does not provide for any provision which may trigger its cancellation.
    2.4.10 The reasons justifying the redemption, pursuant to sect. 2357 and followings of the
    Italian Civil Code, by UniCredit, of the financial instruments contemplated by the plan; the
    beneficiaries of such redemption, indicating whether the same is limited only to certain
    categories of employees; the consequences of the termination of the employment relationship
    with respect to such redemption rights
    The 2018 Group Incentive System does not provide for the redemption by UniCredit or by another Group company with
    reference to the free shares.
    2.4.11 The loans or other special terms that may be granted for the purchase of stocks pursuant
    to sect. 2358, paragraph 3, of the Italian Civil Code
    The 2018 Group Incentive System does not provide for a loan or other special terms for the purchase of the shares.
    2.4.12 The evaluation of the economic burden for UniCredit at date of the assignment of
    the plan, as determined on the basis of the terms and conditions already defined, with
    respect to the aggregate overall amount as well as with respect to each financial instrument
    contemplated by the plan
    The estimation of the overall cost expected by UniCredit in relation to the 2018 Group Incentive System at the grant
    date of the free shares, has been made on the basis of IAS principles, considering the accounting assumptions on
    the foreseeable beneficiaries exits before the allocation of the free shares and on the probability to achieve the
    performance targets related to the allocation of the free shares.
    On the basis of these estimations, the overall expected cost for UniCredit at the grant date of the target number of free
    shares is equal to Euro 160 m to be split in 6 years. Depending on actual performance achievements, actual IAS cost of
    the Plan will vary from Euro 0 to a maximum of Euro 160 m. At this stage it is not possible to define the exact cost in
    each year of life of the 2018 Group Incentive System, since the definition of the actual number of the free shares to be
    allocated is subject to the Board of Directors resolution.
    2.4.13 The indication of any dilution on the corporate capital of the issuer resulting from the
    compensation plan, if any
    The maximum impact of the 2018 System on UniCredit share capital shall be approx. 0.40% in case of the potential
    allocation of all free shares to employees.
    2.4.14 Any limitation to the voting and to the economic rights
    At this stage, the 2018 Group Incentive System does not provide for any limitation to the voting or economic rights for
    the shares allocated.
    2.4.15 In the event the stocks are not negotiated on a regulated market, any and all information
    necessary for a complete evaluation of the value attributable to them
    The 2018 Group Incentive System provides only for the assignment of shares negotiated on regulated markets.
    2.4.16 The number of financial instruments belonging to each option
    The 2018 Group Incentive System does not provide for options.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    14
    2.4.17 The termination date of the options
    The 2018 Group Incentive System does not provide for options.
    2.4.18 The modalities, time limits and clauses for the exercise of the options
    The 2018 Group Incentive System does not provide for options.
    2.4.19 The strike price of the options or the criteria and modalities for its determination, with
    respect in particular to:
    a) the formula for the calculation of the exercise price in connection with the fair market value, and to
    b) the modalities for the calculation of the market price assumed as basis \
    for the calculation of the exercise price
    The 2018 Group Incentive System does not provide for options.
    2.4.20 In case the strike price is different from the fair market value as determined pursuant to
    point 2.4.19.b, the indication of the reasons for such difference
    The 2018 Group Incentive System does not provide for options.
    2.4.21 The criteria justifying differences in the exercise prices between the relevant
    beneficiaries or class of beneficiaries
    The 2018 Group Incentive System does not provide for options.
    2.4.22 In the event the financial instruments underlying granted options are not negotiated on
    a regulated market, the indication of the value attributable to the same or of the criteria for its
    determination
    The 2018 Group Incentive System does not provide for options.
    2.4.23 The criteria for the adjustments required in connection with any extraordinary
    transaction involving the corporate capital of the issuer as well as in connection with
    transaction triggering a variation in the number of the financial instruments underlying granted
    options
    The 2018 Group Incentive System does not provide for adjustments applicable in connection with extraordinary
    transactions involving UniCredit corporate capital (saving the provisions that the Board of Directors may define in the
    resolution in which the Board will exercise the delegation received from the General Shareholders’ Meeting).
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    15
    3. Execution of the “Group Compensation Systems”
    3.1 Beneficiaries of the plan
    With reference to the UniCredit Board of Directors resolutions of
    • February 7, 2018
    • March 13, 2017
    • February 9, 2016 and March 10, 2016
    • April 9, 2015
    • March 11, 2014
    to execute the 2017 Group Incentive System , the 2017-2019 LTI Plan , the 2016 Group Incentive System , the 2015
    Group Incentive System , the 2014 Group Incentive System and the 2013 Group Incentive System (hereinafter also
    the “Group Compensation Systems” or the “Plans”), approved by the Ordinary Shareholders Meeting on April 20, 2017,
    April 14, 2016, May 13, 2015, May 13, 2014, May 11, 2013; the following beneficiaries have been identified for the
    relevant plans:
    • the 2017 Group Incentive System , that provides for the grant of an incentive-in cash and/or UniCredit free ordinary
    shares-to be allocated to Group Identified Staff in a multi-year period (2018-2023), subject to the achievement of
    specific performance objectives;
    • the 2017-2019 LTI Plan , that provides for the grant of an incentive in UniCredit free ordinary shares to be allocated
    to a selected beneficiaries of Group employees that cover key positions in a multi-year period (2018-2023), subject
    to the achievement of specific performance objectives linked to the 2017-2019 Multi-Year Plan;
    • the 2016 Group Incentive System , that provides for the grant of an incentive-in cash and/or UniCredit free ordinary
    shares-to be allocated to Group Identified Staff in a multi-year period (2017-2022), subject to the achievement of
    specific performance objectives. Therefore it provides for the allocation of the second tranche of cash promised
    in 2017, following the verification of the achievement of the Zero Factor provided by the system for the deferral
    payments;
    • the 2015 Group Incentive System , that provides for the grant of an incentive-in cash and/or UniCredit free ordinary
    shares-to be allocated to Group Identified Staff in a multi-year period (2016-2021), subject to the achievement
    of specific performance objectives. Therefore it provides for the allocation of the first tranche of shares promised
    in 2016, following the verification of the achievement of the Zero Factor provided by the system for the deferral
    payments;
    • the 2014 Group Incentive System , that provides for the grant of an incentive-in cash and/or UniCredit free ordinary
    shares-to be allocated to Group Identified Staff in a multi-year period (2015-2020), subject to the achievement of
    specific performance objectives. Therefore it provides for the allocation of the second tranche in shares promised
    in 2015, following the verification of the achievement of the Zero Factor provided by the system for the deferral
    payments. This Plan provides, inter alia, the allocation of the fifth tranche of the shares promised in 2014, following
    the verification of the achievement of the Zero Factor provided by the system for the deferral payments to selected
    resources belonging to the Corporate & Investment Banking Division, also with reference to the 2013 performance
    (Sustainable Performance Plan 2013);
    • the 2013 Group Incentive System , that provides for the grant of an incentive-in cash and/or UniCredit free ordinary
    shares-to be allocated to Group Executives and other selected roles in a multi-year period (2014-2018) subject to the
    achievement of specific performance objectives. Therefore it provides for the allocation of the third tranche of shares
    promised in 2014, following the verification of the achievement of the Zero Factor provided by the system for the
    deferral payments.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    16
    3.1.1 Indication of the name of beneficiaries who are members of the board of directors of
    UniCredit and of the companies directly or indirectly controlled by UniCredit
    The Chief Executive Officer, Mr. Jean Pierre Mustier, benefits from the 2017-2019 LTI Plan only. It is worth mentioning
    that certain potential beneficiaries of the aforementioned Plans, in addition to the exercise of their managing powers
    connected to their offices, held offices in Management Bodies of companies, directly or indirectly controlled by
    UniCredit. In light of the fact that such individuals are amongst the beneficiaries of the Plans in their capacity as
    employees of UniCredit Group, no information as to their name is provided hereto and reference shall be made to the
    information provided below.
    3.1.2 Categories of employees of UniCredit and companies controlling or controlled by this issuer
    The employees of UniCredit and of its parent companies or subsidiaries that benefit from the Group Compensation
    Systems are:
    • for the 2017 Group Incentive System :
    - Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Board members of relevant
    Group Legal Entities;
    - Employees with total remuneration greater than Euro 500,000 in the last year
    - Employees included within 0.3% of staff with the highest remuneration
    - Employees whose remuneration is within the remuneration bracket of senior management and other risk takers
    • for the 2017-2019 LTI Plan :
    - General Manager, Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Board
    members of relevant Group Legal Entities;
    - Employees with total remuneration greater than Euro 500,000 in the last year
    - Employees included within 0.3% of staff with the highest remuneration
    - Employees whose remuneration is within the remuneration bracket of senior management and other risk takers
    • for the 2016 Group Incentive System :
    - General Manager, Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Board
    members of relevant Group Legal Entities;
    - Employees with total remuneration greater than Euro 500,000 in the last year
    - Employees included within 0.3% of staff with the highest remuneration
    - Employees whose remuneration is within the remuneration bracket of senior management and other risk takers
    - Other selected roles
    • for the 2015 Group Incentive System :
    - General Manager, Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Board
    members of relevant Group Legal Entities
    - Employees with total remuneration greater than Euro 500,000 in the last year
    - Employees included within 0.3% of staff with the highest remuneration
    - Employees whose remuneration is within the remuneration bracket of senior management and other risk takers
    - Other selected roles
    • for the 2014 Group Incentive System :
    - General Manager, Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Board
    members of relevant Group Legal Entities
    - Employees with total remuneration greater than Euro 500,000 in the last year
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    17
    - Employees included within 0.3% of staff with the highest remuneration
    - Employees whose remuneration is within the remuneration bracket of senior management and other risk takers
    - Other selected roles
    • for the 2013 Group Incentive System :
    - General Manager, Senior Executive Vice Presidents, Executive Vice Presidents and other risk takers 1
    - Senior Vice Presidents and other selected roles impacting market, credit, liquidity risks with incentive exceeding
    Euro 100,000
    3.1.3 Individuals who benefit from the Plan belonging to the following groups:
    a) General Managers of UniCredit
    Mr. Gianni Franco Papa, General Manager of UniCredit, is among the beneficiaries of LTI Plan 2017-2019, 2016 Group
    Incentive System, 2015 Group Incentive System, 2014 Group Incentive System and 2013 Group Incentive System.
    b) other executives with strategic responsibilities of the financial instrument issuer (not classed as “small”, in
    accordance with Article 3, paragraph 1, letter f ) of Regulation no. 17221 of March 12 2010), if they have, during
    the course of the year, received total compensation (obtained by adding the monetary compensation to the
    financial instrument-based compensation) in excess of the highest total compensation assigned to the members
    of the board of directors or management board, and to the general managers of the financial instrument issuer
    None of UniCredit executives meet the description; therefore no information is provided in connection thereto.
    c) natural persons controlling UniCredit, who are employee or collaborator of UniCredit
    No natural or legal person controls UniCredit and, therefore, no information is provided in connection thereto.
    3.1.4 Description and numerical indication, broken down according to category:
    a) Executives with strategic responsibilities other than those specified under lett. b) of paragraph 3.1.3
    Amongst the beneficiaries of the Group Compensation Systems, there are no. 8 executives of UniCredit who have
    regular access to privileged information and are authorized to take resolutions capable of influencing the development
    and prospects of UniCredit:
    - the Co-Chief Operating Officer, Mr. Ranieri de Marchis and Mr. Francesco Giordano
    - the Group Chief Risk Officer, Mr. T. J. Lim
    - the Group Chief Lending Officer, Mr. Andrea Varese
    - the Head of Group Human Capital, Mr. Paolo Cornetta
    - the Group Compliance Officer, Mr. Carlo Appetiti
    - the Head of Group Legal, Mr. Gianpaolo Alessandro
    - the Head of Internal Audit, Mrs. Serenella De Candia
    b) in the case of “small” companies, in accordance with Article 3, paragraph 1, letter f ) of Regulation no.
    17221 of March 12 2010, the indication for the aggregate of all ex ecutives with strategic responsibilities of the
    financial instrument issuer
    This provision is not applicable and therefore no information is provided in connection thereto.
    c) other categories of employees or collaborators for which different characteristics are envisaged for the plan
    (e.g. executives, middle management, employees etc.)
    There are no classes of employees to which different characteristics of the relevant plans apply.
    1. Employees materially impacting market, credit, liquidity risk at Group level and with an incentive higher than Euro 500,000
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    18
    3.2 Reasons for the adoption of the plan
    3.2.1 The targets which the parties intend to reach through the adoption of the plan
    The 2017 Group Incentive System aims to attract, retain and motivate Group beneficiaries and is aligned to the
    national and international regulatory requirements on variable compensation. It provides for:
    • allocation of a variable incentive defined based on available bonus pool, individual performance evaluation, internal
    benchmark for specific roles/markets and bonus cap as set by the Ordinary Shareholder’s meeting;
    • definition of a balanced structure of upfront (done at the moment of performance evaluation) and deferred
    payments, in cash and in shares;
    • distributions of share payments, coherently with the applicable regulatory requirements regarding the application
    of share retention periods. The payment structure defined according to Bank of Italy disposals requires a retention
    period on upfront shares of 2 years and of 1 year for deferred shares;
    • risk adjusted metrics in order to guarantee long-term sustainability with respect to company’s financial position and
    to ensure compliance with regulatory expectations;
    • malus condition (Zero Factor) which applies in case specific thresholds (profitability, capital & liquidity) are not met
    at both Group and Country/Division levels.
    The 2017-2019 LTI Plan is aimed at aligning Top and Senior Management interests to the long term value creation
    for the shareholder, to share price and Group performance appreciation and sustaining a sound and prudent risk
    management orienting the performance management measurement on a multi-year horizon.
    The Plan has also the characteristic to be qualified as a “retention” tool in order to retain key Group resources for the
    achievement of the mid-long term Group Strategy.
    The 2016 Group Incentive System aims to attract, retain and motivate Group beneficiaries and is aligned to the
    national and international regulatory requirements on variable compensation. It provides for:
    • allocation of a variable incentive defined based on available bonus pool, individual performance evaluation, internal
    benchmark for specific roles/markets and bonus cap as set by the Ordinary Shareholder’s meeting;
    • definition of a balanced structure of upfront (done at the moment of performance evaluation) and deferred
    payments, in cash and in shares;
    • distributions of share payments, coherently with the applicable regulatory requirements regarding the application
    of share retention periods. The payment structure defined according to Bank of Italy disposals requires a retention
    period on upfront shares of 2 years and of 1 year for deferred shares;
    • risk adjusted metrics in order to guarantee long-term sustainability with respect to company’s financial position and
    to ensure compliance with regulatory expectations;
    • malus condition (Zero Factor) which applies in case specific thresholds (profitability, capital & liquidity) are not met
    at both Group and Country/Division levels.
    The 2015 Group Incentive System aims to attract, retain and motivate Group beneficiaries and is aligned to the
    national and international regulatory requirements on variable compensation. It provides for:
    • allocation of a variable incentive defined on available bonus pool, individual performance evaluation, internal
    benchmark for specific roles/markets and bonus cap as set by the Ordinary Shareholder’s meeting;
    • definition of a balanced structure of upfront (done at the moment of performance evaluation) and deferred
    payments, in cash and in shares;
    • distributions of share payments, coherently with the applicable regulatory requirements regarding the application
    of share retention periods. The payment structure defined according to Bank of Italy disposals requires a retention
    period on upfront shares of 2 years and of 1 year for deferred shares;
    • risk adjusted metrics in order to guarantee long-term sustainability with respect to company’s financial position and
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    19
    to ensure compliance with regulatory expectations;
    • malus condition (Zero Factor) which applies in case specific thresholds (profitability, capital & liquidity) are not met at
    both Group and Country/Division levels.
    The 2014 Group Incentive System aims to attract, retain and motivate Group beneficiaries and is aligned to the national
    and international regulatory requirements on variable compensation. It provides for:
    • allocation of a variable incentive defined on available bonus pool, individual performance evaluation, internal
    benchmark for specific roles/markets and bonus cap as set by the Ordinary Shareholder’s meeting;
    • definition of a balanced structure of upfront (done at the moment of performance evaluation) and deferred payments, in
    cash and in shares;
    • distributions of share payments, coherently with the applicable regulatory requirements regarding the application of
    share retention periods;
    • risk adjusted metrics in order to guarantee long-term sustainability with respect to company’s financial position and to
    ensure compliance with regulatory expectations;
    • malus condition (Zero Factor) which applies in case specific thresholds (profitability, capital & liquidity) are not met at
    both Group and Country/Division levels.
    The 2013 Group Incentive System aims to attract, retain and motivate Group beneficiaries and is aligned to the national
    and international regulatory requirements on variable compensation. It provides for:
    • allocation of a variable incentive related to 2013 defined on the basis of individual performance, as well as results at
    business level and, as relevant, at Country and/or Group level;
    • definition of a balanced structure of upfront (following the moment of performance evaluation) and deferred payments,
    in cash and in shares;
    • distributions of share payments which take into account the applicable regulatory requirements regarding the
    application of share retention periods;
    • application of an overall risk/sustainability factor, related to annual Group profitability, solidity and liquidity results
    (“Group Gate”) as well as a Zero Factor related to future Group profitability, solidity and liquidity results.
    3.2.2 Principal factors of variation and performance indexes taken into account for the assignment
    of plans based on financial instruments
    The 2017 Group Incentive System provides an individual performance appraisal based on the achievement of specific
    goals, linked to the “Five Fundamentals” of Competency Model: “Customers First”, “People Development”, “Cooperation
    and Synergies”, “Risk Management”, “Execution and Discipline”.
    Incentive payouts shall be made over a multi-year period (2018-2023) in a balanced structure of upfront (following the
    moment of performance evaluation) and deferred payments, in cash and in shares, subject to continuous employment at
    each date of payment.
    The 2017-2019 LTI Plan provides for the allocation of UniCredit free ordinary shares, in several installments and over a
    multi-year period, subject to the achievement of specific performance conditions linked to the 2017-2019 Multi-Year Plan.
    Performance indicators of the LTI Plan to be evaluated for the definition of the numbers of shares are the following:
    • Return On Allocated Capital;
    • Cost/Income Ratio;
    • NET Non Performing Exposure.
    The 2016 Group Incentive System provides an individual performance appraisal based on the achievement of specific
    goals, linked to the five key elements of the UniCredit model of competencies: “Client obsession”; “Execution and
    Discipline”; “Cooperation and Synergies”; “Risk Management”; “People and Business Developme\
    nt” .
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    20
    Incentive payouts shall be made over a multi-year period (2017-2022) in a balanced structure of upfront (following the
    moment of performance evaluation) and deferred payments, in cash and in shares, subject to continuous employment at
    each date of payment.
    The 2015 Group Incentive System provides an individual performance appraisal based on the achievement of specific
    goals, linked to the five key elements of the UniCredit model of competencies: “Client obsession”; “Execution and
    Discipline”; “Cooperation and Synergies”; “Risk Management”; “People and Business Developme\
    nt” .
    Incentive payouts shall be made over a multi-year period (2016-2021) in a balanced structure of upfront (following the
    moment of performance evaluation) and deferred payments, in cash and in shares, subject to continuous employment
    at each date of payment.
    The 2014 Group Incentive System provides an Individual performance appraisal based on 4-8 goals; other target
    such as relevant options and behaviors, could be considered by the manager for the overall performance appraisal.
    The 2013 Group Incentive System establishes that the achievement of goals defined for 2013 shall be verified using
    a multi-perspective balanced approach to evaluate the achieved level of performance on operational & sustainability
    objectives set within an individual evaluation card (“Performance Screen”) and also on other additional goals, where
    relevant.
    3.2.3 The factors assumed as basis for the determination of the compensation based upon
    financial instruments, or the criteria for the determination of the aforesaid compensation
    The following are the general criteria that the Board of Directors has followed, in the resolutions that after the Annual
    Shareholders’ Meeting approval has executed the Plan, to define the actual number of beneficiaries and the number of
    free shares or performance stock options to be granted.
    The 2017 Group Incentive System provides that in 2018 the Board of Directors - once verified the conditions for 2017
    - defines the percentages of the payments in cash and shares for the beneficiaries categories.
    The 2017-2019 LTI Plan provides that in 2018 the Board of Directors - once verified the conditions for 2017 - defines
    the percentages of the payments in cash and shares for the beneficiaries categories.
    The 2016 Group Incentive System provides that in 2017 the Board of Directors - once verified the conditions for 2016
    - defines the percentages of the payments in cash and shares for the beneficiaries categories.
    The 2015 Group Incentive System provides that in 2016 the Board of Directors - once verified the conditions for 2015
    - defines the percentages of the payments in cash and shares for the beneficiaries categories.
    The 2014 Group Incentive System provides that in 2015 the Board of Directors - once verified the conditions for 2014
    - defines the percentages of the payments in cash and shares for the beneficiaries categories.
    The 2013 Group Incentive System provides that in 2014 the Board of Directors - once verified the conditions for 2013
    - defines the percentages of the payments in cash and shares for the beneficiaries categories.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    21
    3.2.4 The reasons justifying the decision to assign compensation plans based on financial
    instruments not issued by UniCredit, such as financial instruments issued by its subsidiaries,
    its parent companies or third parties; in the event the aforesaid financial instruments are not
    negotiated on regulated markets, the issuer shall provide information as to the criteria adopted
    for the calculation of the value attributable to such financial instruments
    The Group Compensation Systems do not contemplate the allocation of similar financial instruments.
    3.2.5 The evaluations, with respect to relevant tax and accounting implications, taken into
    account in the definition of the plans
    The Group Compensation Systems have not been influenced by significant tax or accounting considerations.
    Furthermore, the tax regime and social security contribution applied to the free shares allocated, will be compliant
    with the current regulations in the country where the beneficiary is fiscally resident.
    3.2.6 The indication as to whether the plan enjoys any support from the special fund for
    encouraging worker participation in the companies, as provided for under Article 4, paragraph
    112, of Law December, 24 2003 n. 350
    The Group Compensation Systems are not currently supported by the special fund for encouraging worker participation
    in the companies, as provided for under sect. 4, paragraph 112, of Law December 24, 2003 n. 350.
    3.3 The procedure for the adoption of the plan and the timeframe for the
    assignment of the financial instruments
    3.3.1 Powers delegated to the board of directors by the shareholders’ meeting for the
    implementation of the plan
    The best solution identified to execute the Group Compensation Systems is to delegate the Board of Directors,
    pursuant to Article 2443 of the Civil Code, the faculty to increase share capital on one or more occasions as described
    in the Director’s Report presented to the Extraordinary Shareholders’ Meeting of April 20, 2017, for the 2017 Group
    Incentive System and the 2017-2019 LTI Plan, to the Extraordinary Shareholders’ Meeting of April 14, 2016, for
    the 2016 Group Incentive System, to the Extraordinary Shareholders’ Meeting of May 13, 2015, for the 2015 Group
    Incentive System, to the Extraordinary Shareholders’ Meeting of May 13, 2014, for the 2014 Group Incentive System,
    to the Extraordinary Shareholders’ Meeting of May 11, 2013, for the 2013 Group Incentive System, in accordance with
    the following provisions:
    • with reference to the 2017 Group Incentive System and the 2017-2019 LTI Plan , the BoD could resolve, within
    a maximum period of five years, in one or more instances, a free share c apital under art. 2349 of the Civil Code,
    of maximum no. 101,800,000 UniCredit ordinary shares (this number has b een re-calculated to no. 20,000,000
    ordinary shares after the reverse stock split of January 23, 2017 and the application of the “K Factor” adjustment
    recommended by Italian Society of Financial Analysts-AIAF, after capital transactions carried out by UniCredit);
    • with reference to the 2016 Group Incentive System , the BoD could resolve, within a maximum period of five
    years, in one or more instances, a free share capital under art. 2349 of the Civil Code, of maximum no. 22,800,000
    UniCredit ordinary shares. In addition, maximum no. 1,700,000 ordinary shares could be resolved by the BoD to
    finalize the execution of the 2016 Group Incentive System (this number has been re-calculated to no. 4,888,994
    ordinary shares after the reverse stock split of January 23, 2017 and the additional capital increase request to the
    Board of Directors on March 13, 2017 consequently to the application of the “K Factor” adjustment recommended by
    Italian Society of Financial Analysts-AIAF, after capital transactions carried out by UniCredit);
    • with reference to the 2015 Group Incentive System , the BoD could resolve, within a maximum period of five
    years, in one or more instances, a free share capital under art. 2349 of the Civil Code, of maximum no. 29,490,000
    UniCredit ordinary shares. In addition, maximum no. 2,010,000 ordinary shares could be resolved by the BoD to
    finalize the execution of the 2015 Group Incentive System (this number has been re-calculated to no. 4,362,056
    ordinary shares after the reverse stock split of January 23, 2017 and the additional capital increase request to the
    Board of Directors on March 13, 2017 consequently to the application of the “K Factor” adjustment recommended by
    Italian Society of Financial Analysts-AIAF, after capital transactions carried out by UniCredit);
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    22
    • with reference to the 2014 Group Incentive System , the BoD could resolve, within a maximum period of five
    years, in one or more instances, a free share capital under art. 2349 of the Civil Code, of maximum no. 28,964,197
    UniCredit ordinary shares. In addition, maximum no. 9,500,000 ordinary shares could be resolved by the BoD to
    finalize the execution of the 2014 Group Incentive System (this number has been re-calculated to no. 3,846,419
    ordinary shares after the reverse stock split of January 23, 2017);
    • with reference to the 2013 Group Incentive System , the BoD could resolve, within a maximum period of five
    years, in one or more instances, a free share capital under art. 2349 of the Civil Code, of maximum no. 42,200,000
    UniCredit ordinary shares (this number has been re-calculated to no. 4,220,000 ordinary shares after the reverse
    stock split of January 23, 2017);
    3.3.2 Indication of the individuals in charge of the management of the plan, their powers
    authority
    The Organizational Unit “Reward & Benefits” of the Holding is in charge for the management of the Group
    Compensation Systems.
    3.3.3 Procedures for the amendment of the plans, if any, also in connection with potential
    variation of the original targets
    No specific procedures for the amendment of the Group Compensation Systems are provided for.
    3.3.4 Description of the modalities for the determination of the availability and assignment of
    the financial instruments contemplated by the plan
    In order to execute the plans in accordance with the delegation provided by the Shareholders’ Meeting on April 20,
    2017, on April 14, 2016, on May 13, 2015, on May 13, 2014and on May 11, 2013, t he Board of Directors could resolve
    to approve a free share capital increase:
    • for the 2017 Group Incentive System and the 2017-2019 LTI Plan , within a maximum period of five years, in one
    or more instances, of maximum no. 101,800,000 UniCredit ordinary shares (this number has been re-calculated to
    no. 20,000,000 ordinary shares after the reverse stock split of January 23, 2017 and the application of the “K Factor”
    adjustment recommended by Italian Society of Financial Analysts-AIAF, after capital transactions carried out by
    UniCredit;
    • for the 2016 Group Incentive System , within a maximum period of five years, in one or more instances, of
    maximum no. 22,800,000 UniCredit ordinary shares (this number has bee n re-calculated to no. 4,888,994 ordinary
    shares after the reverse stock split of January 23, 2017 and the additional capital increase request to the Board of
    Directors on March 13, 2017 consequently to the application of the “K Factor” adjustment recommended by Italian
    Society of Financial Analysts-AIAF, after capital transactions carried out by UniCredit;
    • for the 2015 Group Incentive System , within a maximum period of five years, in one or more instances, of
    maximum no. 29,490,000 UniCredit ordinary shares. In addition, maximum n o. 2,010,000 ordinary shares could
    be resolved by the BoD to finalize the execution of the 2015 Group Incentive System (this number has been re-
    calculated to no. 4,362,056 ordinary shares after the reverse stock split of January 23, 2017 and the additional
    capital increase request to the Board of Directors on March 13, 2017 consequently to the application of the “K
    Factor” adjustment recommended by Italian Society of Financial Analysts-AIAF, after capital transactions carried out
    by UniCredit);
    • for the 2014 Group Incentive System , within a maximum period of five years, in one or more instances, of
    maximum no. 28,964,197 UniCredit ordinary shares. In addition, maximum no. 9,500,000 ordinary shares could
    be resolved by the BoD to finalize the execution of the 2014 Group Incentive System (this number has been re-
    calculated after the reverse stock split of January 23, 2017);
    • for the 2013 Group Incentive System , within a maximum period of five years, in one or more instances, of
    maximum no. 42,200,000 UniCredit ordinary shares (this number has been re-calculated after the reverse stock split
    of January 23, 2017);
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    23
    3.3.5 The influence exercised by each director in the determination of the characteristics of
    the plans; the potential conflict of interest which may trigger the obligation for the relevant
    director to abstain from exercising his vote in the relevant resolution
    In the determination of the essential characteristics of the Group Compensation Systems and of the relevant criteria
    for the identification of the instruments under the Plan, the Board of Directors followed the guidelines and criteria
    elaborated by the Remuneration Committee of UniCredit.
    Even if the CEO of UniCredit is not among the beneficiaries of the Plans, the latter has abstained from participating in
    the definition of the Plans.
    3.3.6 The date on which the board of directors resolved upon the assignment of the financial
    instruments contemplated by the plan
    In accordance with the delegation received by the Shareholders’ Meeting, as described in point 3.3.1, the Board of
    Directors on February 7, 2018 resolved to execute the Group Compensation Systems.
    3.3.7 The date on which the remuneration committee resolved upon the Plan of UniCredit
    The Remuneration Committee, on February 6, 2018 positively resolved upon the conditions to be applied at the
    execution of the Group Compensation Systems.
    3.3.8 The market price of UniCredit ordinary shares, on the dates mentioned in points 3.3.6 e
    3.3.7
    The market price of UniCredit ordinary shares, registered on the dates of Board of Directors approval of the Group
    Compensation Systems execution (February 7, 2018) and on the date of the positive opinion by the Remuneration
    Committee of UniCredit (February 6, 2018) resulted equal to Euro 17.4780 and to Euro 17.00.
    3.3.9 In which terms and modalities UniCredit takes into account, in the determination of the
    timeframe for the assignment of the plans, of the possible time-coincidence between:
    • such assignment or the decision, if any, adopted thereon by the Remuneration Committee, and
    • the spread of relevant information, if any, pursuant to sect. 114, paragraph 1 of Legislative Decree 58/98; for
    instance, in cases in which such information is:
    - not already public and capable to positively affect the market quotation, or
    - already published and capable to negatively affect the market quotation
    In relation to the foregoing it is clarified that the resolution of the General Shareholders’ Meeting has been
    communicated to the market in compliance with the current regulations. It is also clarified that analogous information
    to the market is made available upon the resolution adopted by the UniCredit Board of Directors in execution of the
    Group Compensation Systems.
    It is worthwhile clarifying that, although all the resolutions on share based plans adopted by the Board of Directors
    are subject to the prior positive opinion of the Remuneration Committee of UniCredit, the information to the market,
    where due, is given only after the relevant resolution of the Board of Directors.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    24
    3.4 The characteristics of the financial instruments assigned
    3.4.1 Description of the compensation plan
    The 2017 Group Incentive System provides for the grant of an incentive-in cash and/or free UniCredit ordinary
    shares-to be allocated to Group Executives and other Identified Staff in a multi-year period (2018-2023) subject to the
    achievement of specific performance objectives.
    The 2017-2019 LTI Plan provides for the grant of an incentive in UniCredit free ordinary shares to be allocated to a
    selected beneficiaries of Group employees that cover key positions in a multi-year period (2018-2023), subject to the
    achievement of specific performance objectives linked to the 2017-2019 Multi-Year Plan;
    The 2016 Group Incentive System provides for the grant of an incentive-in cash and/or free UniCredit ordinary
    shares-to be allocated to Group Executives and other Identified Staff in a multi-year period (2017-2022) subject to the
    achievement of specific performance objectives.
    The 2015 Group Incentive System provides for the grant of an incentive-in cash and/or free UniCredit ordinary
    shares-to be allocated to Group Executives and other Identified Staff in a multi-year period (2016-2021) subject to the
    achievement of specific performance objectives.
    The 2014 Group Incentive System provides for the grant of an incentive-in cash and/or free UniCredit ordinary
    shares-to be allocated to Group Executives and other Identified Staff in a multi-year period (2015-2020) subject to the
    achievement of specific performance objectives.
    The 2013 Group Incentive System provides for the grant of an incentive-in cash and/or free UniCredit ordinary
    shares-to be allocated to Group Executives and other Identified Staff in a multi-year period (2014-2018) subject to the
    achievement of specific performance objectives.
    3.4.2 Indication of the time period for the implementation of the plan also indicating different
    cycles, if any, of its implementation
    The free shares related to the 2017 Group Incentive System will be allocated by UniCredit in multiple installments
    (in the period 2020-2023) subject to the Board assessment in 2018 of the achievement of the goals set for 2017.
    The free shares related to the 2017-2019 LTI Plan will be allocated by UniCredit in multiple installments (in the
    period 2020-2023) subject to the Board assessment in 2018 of the achievement of the goals set for 2017.
    The free shares related to the 2016 Group Incentive System will be allocated by UniCredit in multiple installments
    (in the period 2019-2022) subject to the Board assessment in 2017 of the achievement of the goals set for 2016.
    The free shares related to the 2015 Group Incentive System will be allocated by UniCredit in multiple installments
    (in the period 2018-2021) subject to the Board assessment in 2016 of the achievement of the goals set for 2015.
    The free shares related to the 2014 Group Incentive System will be allocated by UniCredit in multiple installments
    (in the period 2017-2020) subject to the Board assessment in 2015 of the achievement of the goals set for 2014.
    The free shares related to the 2013 Group Incentive System will be allocated by UniCredit in multiple installments
    (in the period 2016-2018) subject to the Board assessment in 2014 of the achievement of the goals set for 2013.
    3.4.3 The termination date of the plan
    The 2017 Group Incentive System will lapse by July 2023.
    The 2017-2019 LTI Plan will lapse by 2023.
    The 2016 Group Incentive System will lapse by May 2022.
    The 2015 Group Incentive System will lapse by May 2021.
    The 2014 Group Incentive System will lapse by May 2020.
    The 2013 Group Incentive System will lapse by May 2018.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    25
    3.4.4 The overall maximum number of financial instruments, also in the form of options,
    assigned over any fiscal year with respect to the beneficiaries namely identified or identified by
    categories, as the case may be
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2017 Group
    Incentive System within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to
    16,000,000.
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2017-2019 LTI Plan
    within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to 7,000,000.
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2016 Group
    Incentive System within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to
    4,888,994.
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2015 Group
    Incentive System within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to
    4,362,056.
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2014 Group
    Incentive System within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to
    3,846,419.
    The maximum number of free shares that the Board of Directors is authorized to allocate for the 2013 Group
    Incentive System within the power of the delegation received by UniCredit Shareholders’ Meeting is equal to
    4,220,000.
    At this stage it is not possible to indicate the maximum number of free shares allocated in each fiscal year during the
    life of the Group Compensation Systems, since the actual definition will be done by the Board of Directors on the basis
    of the criteria approved by the Shareholders’ Meeting.
    3.4.5 The procedures and clauses for the implementation of the plan, specifying whether
    the assignment of the financial instruments is subject to the satisfaction of certain specific
    conditions and, in particular, to the achievement of specific results, including performance
    targets; description of the aforesaid conditions and results
    Considering the criteria described in the point 3.2.2, the allocation and the exercise of the free shares is subject to
    the achievement of the performance targets set by the Board of Directors. The assessment of the goals achievement
    should be done by the Board of Directors at the end of the performance period described in point 3.4.2.
    3.4.6 Indication of the restrictions on the availability of the financial instruments allocated
    under the plan or of the financial instruments relating to the exercise of the options, with
    particular reference to the time limits within which the subsequent transfer of the stocks to the
    issuer or third parties is permitted or prohibited
    The Group Compensation Systems provide that the free shares to be allocated are free from restrictions and, hence,
    freely transferable as from the date of their issue and with the same rights as the ones already in circulation.
    3.4.7 Description of any condition subsequent to the plan in connection with the execution, by
    the beneficiaries, of hedging transactions aimed at preventing the effects of potential limits
    to the transfer of the financial instruments assigned there under, also in the form of options,
    as well as to the transfer of the financial instruments relating to the exercise of the aforesaid
    options
    In accordance with national and international regulatory guidelines and the Group Compensation Policy, beneficiaries
    are required not to use personal hedging strategies or remuneration and liability-related insurance to undermine
    the risk alignment effects embedded in their remuneration arrangements. Involvement in any form of hedging
    transaction shall be considered in breach of Group compliance policies and therefore the rights to receive shares shall
    automatically expire.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    26
    3.4.8 Description of the consequences deriving from the termination of the employment or
    working relationship
    With the exception of the “good leavers” cases as provided by the Rules, in case the beneficiary exits from the Group or
    in the event that the beneficiary is subject to disciplinary actions by the employer for irregular activities with reference
    to processes and rules related to i) risk underwriting ii) sales processes of banking and financial services iii) internal
    code of conduct, the beneficiary will lose the right to receive the free shares; the above unless the Board of Directors,
    with reference to each single case, decides otherwise.
    3.4.9 The indication of any other provisions which may trigger the cancellation of the plan
    The Group Compensation Systems do not provide for any provision which may trigger its cancellation.
    3.4.10 The reasons justifying the redemption, pursuant to sect. 2357 and followings of the
    Italian Civil Code, by UniCredit, of the financial instruments contemplated by the plan; the
    beneficiaries of such redemption, indicating whether the same is limited only to certain
    categories of employees; the consequences of the termination of the employment relationship
    with respect to such redemption rights
    The Group Compensation Systems do not provide for the redemption by UniCredit or by another Group company with
    reference to the free shares.
    3.4.11 Loans or other special terms that may be granted for the purchase of stocks pursuant to
    sect. 2358, paragraph 3, of the Italian Civil Code
    The Group Compensation Systems do not provide for loans or other special terms for the purchase of the shares.
    3.4.12 The evaluation of the economic burden for UniCredit at date of the assignment of
    the plan, as determined on the basis of the terms and conditions already defined, with
    respect to the aggregate overall amount as well as with respect to each financial instrument
    contemplated by the plan
    The estimation of the overall cost expected by UniCredit in relation to the Group Compensation Systems at the date
    of promise to grant the free shares, has been made on the basis of the IAS principles, considering the accounting
    assumptions on the foreseeable beneficiaries exits before the allocation of the free shares and on the probability to
    achieve the performance targets related to the allocation of the free shares.
    On the basis of these estimations, the overall expected cost for UniCredit at the date of promise to grant the target
    number of free shares is equal to Euro 1,178.32 m:
    • Euro 160 m for the 2017 Group Incentive System ;
    • Euro 66 m for the 2017-2019 LTI Plan ;
    • Euro 180 m for the 2016 Group Incentive System ;
    • Euro 238 m for the 2015 Group Incentive System ;
    • Euro 316.32 m for the 2014 Group Incentive System ;
    • Euro 218 m for the 2013 Group Incentive System .
    3.4.13 Indication of any dilution on the corporate capital of the issuer resulting from the
    compensation plan, if any
    The maximum dilution impact of the Group Compensation Systems is amounting to approximately 0.82%.
    3.4.14 Any limitation to the voting and to the economic rights
    At this stage, the 2017-2019 LTI Plan and the 2017, 2016, 2015, 2014 and 2013 Group Incentive System do not
    provide for any limitation to the voting or economic rights for the shares allocated.
    3.4.15 In the event the stocks are not negotiated on a regulated market, any and all information
    necessary for a complete evaluation of the value attributable to them
    The Group Compensation Systems provide only for the use of shares negotiated on regulated markets.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    27
    3.4.16 Number of financial instruments belonging to each option
    The Group Compensation Systems do not provide for options.
    3.4.17 The termination date of the options
    The Group Compensation Systems do not provide for options.
    3.4.18 The modalities, time limits and clauses for the exercise of the options
    The Group Compensation Systems do not provide for options.
    3.4.19 The strike price of the options or the criteria and modalities for its determination, with
    respect in particular to:
    • the formula for the calculation of the exercise price in connection with the fair market value, and to
    • the modalities for the calculation of the market price assumed as b\
    asis for the calculation of the exercise price
    The Group Compensation Systems do not provide for options
    3.4.20 In case the strike price is different from the fair market value as determined pursuant to
    point 3.4.19.b, the indication of the reasons for such difference
    The Group Compensation Systems do not provide for options.
    3.4.21 The criteria justifying differences in the exercise prices between the relevant
    beneficiaries or class of beneficiaries
    The Group Compensation Systems do not provide for options.
    3.4.22 In the event the financial instruments underlying granted options are not negotiated on
    a regulated market, the indication of the value attributable to the same or of the criteria for its
    determination
    The Group Compensation Systems do not provide for options.
    3.4.23 The criteria for the adjustments required in connection with any extraordinary
    transaction involving the corporate capital of the issuer as well as in connection with
    transaction triggering a variation in the number of the financial instruments underlying granted
    options
    The Group Compensation Systems do not provide for adjustments applicable in connection with extraordinary
    transactions involving UniCredit corporate capital (saving the provisions that the Board of Directors may define in the
    resolution in which the Board will exercise the delegation received from the General Shareholders’ Meeting).
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    28
    4.1 Beneficiaries of the plan
    The “2016 Employee Share Ownership Plan” (“Let’s Share for 2017”) has been addressed to the employees of the
    companies of UniCredit in the 11 countries that have participated in the Plan (Austria, Bulgaria, France, Germany, Italy,
    Luxembourg, United Kingdom, Czech Rep, Slovakia, Serbia, Hungary), covering in total about 70% of the overall Group
    population. The Plan Let’s Share for 2017 did not provide for the participation of employees of the companies operating
    in the other countries in which the Group is operating, since for legal, fiscal, operational or organizational reasons it is not
    possible to implement the Plan Let’s Share for 2017 in the terms approved and defined by UniCredit S.p.A.
    4.1.1 Indication of the name of beneficiaries who are members of the board of directors of
    UniCredit and of the companies directly or indirectly controlled by UniCredit
    Mr. Jean Pierre Mustier, CEO of UniCredit, is among the potential beneficiaries of Plan Let’s Share for 2017.
    It is worth mentioning that certain potential beneficiaries of the Plan Let’s Share for 2017 - employees of UniCredit
    - in addition to the exercise of their managing powers connected to their offices, held offices in Management Bodies
    of companies, directly or indirectly, controlled by UniCredit. In light of the fact that such individuals are amongst the
    beneficiaries of the Plan Let’s Share for 2017 in their capacity as employees of UniCredit, no information as to their
    names is provided hereto and reference shall be made to the information provided below.
    4.1.2 The categories of employees or collaborators of UniCredit and companies controlling or
    controlled by this issuer
    The Plan Let’s Share for 2017 has been applied also to the following classes of employees of UniCredit and of the main
    banks and companies of the Group in the participating countries:
    • General Managers & Deputy General Managers (or similar categories in the different jurisdictions in which the Group
    operates) of UniCredit and of the main banks and companies of the Group in the above mentioned countries;
    • Executives (or similar categories in the different jurisdictions in which the Group operates) of UniCredit and of main
    banks and the companies of the Group in the above mentioned countries;
    • Middle Managers (or similar categories in the different jurisdictions in which the Group operates) of UniCredit and of
    main banks and the companies of the Group in the above mentioned countries;
    • Employees (or similar categories in the different jurisdictions in which the Group operates) of UniCredit and of main
    banks and the companies of the Group in the above mentioned countries;
    4.1.3 Individuals who benefit from the Plan belonging to the following groups:
    a) General Managers of UniCredit
    Among the potential beneficiaries of the Plan Let’s Share for 2017 there is the General Manager, Mr. Gianni Franco Papa,
    who currently carries out management activities of UniCredit or anyway has regular access to privileged information and
    is authorized to take resolutions capable of influencing the development and prospects of UniCredit in any case.
    b) other executives with strategic responsibilities of the financial instrument issuer (not classed as “small”, in
    accordance with Article 3, paragraph 1, letter f ) of Regulation no. 17221 of 12 March 2010), if they have, during
    the course of the year, received total compensation (obtained by adding the monetary compensation to the
    financial instrument-based compensation) in excess of the highest total compensation assigned to the members of
    the board of directors or management board, and to the general managers of the financial instrument issuer
    None of UniCredit executives meets the description; therefore no information is provided in connection thereto.
    4. Execution of the “2016 Employee Share
    Ownership Plan of UniCredit Group”
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    29
    c) natural persons controlling UniCredit, who are employee or collaborator of UniCredit
    No natural or legal person controls UniCredit and, therefore, no information is provided in connection thereto.
    4.1.4 Description and numerical indication, broken down according to category:
    a) Executives with strategic responsibilities other than those specified under lett. b) of paragraph 4.1.3
    Amongst the beneficiaries of the Plan Let’s Share for 2017, along with the General Manager mentioned above,
    there are n. 8 executives of UniCredit who have regular access to privileged information and are authorized to take
    resolutions capable of influencing the development and prospects of UniCredit:
    • the two Co-Chief Operating Officer, Mr. Ranieri de Marchis and Mr. Francesco Giordano
    • the Group Chief Risk Officer, Mr. T.J. Lim
    • the Group Chief Lending Officer, Mr. Andrea Varese
    • the Head of Group Human Capital, Mr. Paolo Cornetta
    • the Group Compliance Officer, Mr. Carlo Appetiti
    • the Head of Group Legal, Mr. Gianpaolo Alessandro
    • the Head of Internal Audit, Mrs. Serenella De Candia
    b) in the case of “small” companies, in accordance with Article 3, paragraph 1, letter f ) of Regulation no.
    17221 of 12 March 2010, the indication for the aggregate of all executives with strategic responsibilities of the
    financial instrument issuer
    This provision is not applicable and, therefore, no information is provided in connection thereto.
    c) other categories of employees or collaborators for which different characteristics are envisaged for the plan
    (e.g. executives, middle management, employees etc.)
    There are no classes of employees to which different characteristics of the Plan Let’s Share for 2017 apply.
    4.2 The reasons for the adoption of the plan
    4.2.1 The targets which the parties intend to reach through the adoption of the plan
    Through the Plan Let’s Share for 2017, UniCredit aims at fostering the sense of belonging to the Group and the
    commitment of the employees to achieve the corporate goals.
    In particular, the Plan Let’s Share for 2017 aims at offering to the employees of the companies of the Group
    participating in the Plan, the possibility to buy UniCredit ordinary shares at favourable conditions.
    The decision to propose the adoption of the Plan Let’s Share for 2017 has been taken on the basis of the consideration
    that, from a financial point of view, plans based on financial instruments reserved to employees, as the Plan Let’s
    Share for 2017, are currently an advantage both for the company that adopts the Plan and for the beneficiaries.
    The Plan Let’s Share for 2017 does not provide for alternative allocation criteria amongst the beneficiaries of the Plan,
    since the criteria specified in section 4.2.3 will regularly apply to all the beneficiaries described in section 4.1. except
    for the “Alternative structure” to be presented in the next paragraphs. For fiscal reasons, in some foreign countries the
    “Alternative structure” is providing to the beneficiaries a different timetable for the allocation activities.
    4.2.2 Principal factors of variation and performance indices taken into account for the
    assignment of plans based on financial instruments
    Considering the goals of the Plan Let’s Share for 2017, no key variables and performance indicators have been
    considered to grant the free shares as detailed below.
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    30
    4.2.3 The factors assumed as basis for the determination of the compensation based upon
    financial instruments, or the criteria for the determination of the aforesaid compensation
    The Plan Let’s Share for 2017 does not contain an exact indication of the amount based on free shares to be allocated
    to the beneficiaries, rather it merely fixes the maximum and minimum amount they can invest.
    The purpose of UniCredit to adopt the Plan Let’s Share for 2017 is in line with the strategy adopted in recent years by
    the Group for maximizing the corporate value and for fostering employees’ sense of belonging and the commitment to
    achieve the corporate goals.
    4.2.4 The reasons justifying the decision to assign compensation plans based on financial
    instruments not issued by UniCredit, such as financial instruments issued by its subsidiaries,
    its parent companies or third parties; in the event the aforesaid financial instruments are not
    negotiated on regulated markets, the issuer shall provide information as to the criteria adopted
    for the calculation of the value attributable to such financial instruments
    The Plan Let’s Share for 2017 does not contemplate the allocation of similar financial instruments.
    4.2.5 The evaluations, with respect to the relevant tax and accounting implications, taken into
    account in the definition of the plans
    The Plan Let’s Share for 2017 has not been influenced by significant tax or accounting consideration. In particular, it
    is specified that it will be taken into account the income tax treatment applicable from time to time in the country
    where each participant has his/her residency. In Italy, the Plan Let’s Share for 2017 structure is qualified for the current
    favourable tax treatment provided for all employees share ownership plans (Section 51 TUIR) provided that certain
    conditions are met.
    4.2.6 The indication as to whether the plan enjoys any support from the special fund for
    encouraging worker participation in the companies, as provided for under Article 4, paragraph
    112, of Law December, 24 2003 n. 350
    The Plan Let’s Share for 2017 is not supported by the special fund for encouraging worker participation in the
    companies, as provided for under Article. 4, paragraph 112, of Law December 24, 2003 n. 350.
    4.3 The procedure for the adoption of the plan and the timeframe for the
    assignment of the financial instruments
    4.3.1 Powers delegated to the board of directors by the shareholders’ meeting for the
    implementation of the plan
    In occasion of the approval of the Plan Let’s Share for 2017, the Shareholders’ Meeting - Ordinary session of UniCredit
    has not given any specific powers and functions to the Board of Directors for the execution of the Plan Let’s Share for
    2016, but has given to the Chairman and/or to the Chief Executive Officer, respectively, every opportune powers of
    attorney to enact the Shareholders resolution, making the appropriate changes/integrations to the Plan Let’s Share for
    2017, also in order to be compliant with the laws and regulations in all the different countries in which the Group’s
    companies operate.
    4.3.2 Indication of the individuals in charge of the management of the plan, their powers authority
    The Organizational Unit “Reward & Benefits” of the Holding is in charge for the management of the Plan Let’s Share for
    2017.
    The Plan Let’s Share for 2017 is managed and administered with the support of a specialized provider external to the
    Group.
    4.3.3 Procedures for the amendment of the plans, if any, also in connection with potential
    variation of the original targets
    No specific procedures for the amendment of the Plan Let’s Share for 2017 are provided for.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    31
    4.3.4 Description of the modalities for the determination of the availability and assignment of
    the financial instruments contemplated by the plan
    The employees of the Group companies who joined the Plan Let’s Share for 2017 (“Participants”) have communicated,
    in the period from May 26, 2017 to July 14, 2017 the amount to invest for the purchasing of the UniCredit ordinary
    shares (“Investment Shares”). The Participants have submitted an order to the relevant Bank of the Group to buy-on
    a monthly basis, from July 2017 to December 2017, or one-off basis (in July 2017) (“Enrolment Period”) - UniCredit
    ordinary shares. The purchase has been made on the market by FinecoBank - the Group company, with registered office
    in Italy, appointed as unique broker for the Plan Let’s Share for 2017 - and all the purchased shares are sub-deposited
    in an account opened in the name of each participant in Société Générale Securities Services (SGSS) as Custodian Bank
    for the Plan Let’s Share for 2017.
    At the beginning of the Enrolment Period (July 2017), each participant received an immediate discount of 25% on
    the purchase price in the form of free shares (“Free Shares”). The “Free Shares” are locked up for one year (from
    the end of July 2017 to the end of July 2018). After this 1-year Holding Period, the participants can freely dispose
    of all the shares. “Free Shares” are subject to forfeiture if the participants sell their “Investment Shares”, or if they
    leave employment with the Group, before the end of the 1 year lock-up period, except in the case of termination of
    employment for special reasons provided by the Plan Let’s Share for 2017.
    To Plan’s participants resident in countries where, for fiscal reasons, it will not be possible to grant the “Free Shares” at
    the beginning of the enrolment period, the right to receive the “Free Shares” will be offered at the end of the Holding
    Period (“Alternative” structure).
    4.3.5 The influence exercised by each director in the determination of the characteristics of
    the plans; the potential conflict of interest which may trigger the obligation for the relevant
    director to abstain from exercising his vote in the relevant resolution
    While defining the essential features of the Plan Let’s Share for 2017, submitted to the General Meeting on April
    14, 2016, the Board of Directors followed the guidelines and criteria elaborated by the Remuneration Committee of
    UniCredit.
    In the implementation of the Plan Let’s Share for 2017 also the CEO of UniCredit followed the guidelines and criteria
    elaborated by the Board of Directors and Remuneration Committee of UniCredit.
    4.3.6 The date on which the board of directors resolved upon the assignment of the financial
    instruments contemplated by the plan
    The Board of Directors on March 10, 2016 resolved upon the Plan Let’s Share for 2017 approved by the Shareholders’
    Meeting - Ordinary session of UniCredit on April 14, 2016.
    4.3.7 The date on which the remuneration committee resolved upon the Plan of UniCredit
    The Remuneration Committee, on March 3, 2016, positively resolved upon the criteria and the methodology
    elaborated for the definition of the Plan Let’s Share for 2017, sharing the reasons and motivations thereof.
    4.3.8 The market price of UniCredit ordinary shares, on the dates mentioned in points 4.3.6 and
    4.3.7
    The market price of UniCredit ordinary shares, registered on the date of Board of Directors (March 10, 2016) approval
    of Plan Let’s Share for 2017 proposal and on the date of positive opinion expressed by the Remuneration Committee
    of UniCredit (March 3, 2016), amounted to Euro 3.7 and Euro 3.722.
    On May 26, 2017 - date in which the employees of the Group have been invited to the Plan Let’s Share for 2017 - the
    market price of UniCredit ordinary shares was equal to Euro 16.59.
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    32
    4.3.9 In which terms and modalities UniCredit takes into account, in the determination of the
    timeframe for the assignment of the plans, of the possible time-coincidence between:
    • such assignment or the decision, if any, adopted thereon by the Remuneration Committee, and
    • the spread of relevant information, if any, pursuant to Article. 114, paragraph 1 of Legislative Decree 58/98;
    for instance, in cases in which such information is:
    - not already public and capable of positively affecting the market quotation, or
    - already published and capable of negatively affecting the market quotation
    It is worthwhile clarifying that, although all the resolutions concerning share-based incentive plans adopted by
    the Board of Directors are subject to the prior positive opinion of the Remuneration Committee of UniCredit, the
    information to the market is given only after the relevant resolution of the Board of Directors.
    Therefore, with reference to the resolution of the Board of Directors of March 10, 2016 related to the Plan Let’s Share
    for 2017, communication has been given to the markets, in compliance with the current regulations.
    With reference to the execution of the Plan Let’s Share for 2017, similar information to the market, as required by the
    regulations, is made available.
    4.4 The characteristics of the financial instruments assigned
    4.4.1 Description of the compensation plan
    The Plan Let’s Share for 2017 provides for offering to Group employees the possibility to invest in UniCredit shares at
    favourable conditions, by granting a 25% discount on shares purchased on the market within the Plan. The discount is
    granted in the form of free shares (“Free Shares”) whose ownership by Participants will be subject to the employment
    status of the employee with a UniCredit company until the expiry of a 1-year restriction period, with the exception of
    termination for reasons specifically provided for by the Rules of the Plan Let’s Share for 2017.
    4.4.2 Indication of the time period for the implementation of the plan also indicating different
    cycles, if any, of its implementation
    The phases to implement the Plan Let’s Share for 2017 are:
    • Election Period: during the election window, from May 26, 2017 to July 14, 2017, employees participating to the
    Plan Let’s Share for 2017 (“Participants”), chose the overall amount that they wanted to invest, up to a maximum
    contribution of Euro 6,000 per annum. The minimum annual contribution amount has been defined considering the
    peculiarities of each participating country;
    • Enrolment Period : from July 2017 to December 2017 the Participants had the opportunity to buy shares by means
    of monthly debits on their current account (“monthly” modality) or by payme nts in one instalment made in July
    2017 (“one-off” modality). In case during the Holding Period a Participant leaves the Plan Let’s Share for 2017, he/
    she will lose the free shares allocated to him/her in accordance with the below point c);
    • “Free Shares”: at the beginning of the Enrolment Period (July 2017), the Participant received an immediate discount
    equal to 25% on the purchase price in the form of free shares; the “Free Shares” are subject to lock-up during 1 year
    and the Participant will lose the entitlement to the Free Shares if, during the 1-year Holding Period, he/she will no
    longer be an employee of a UniCredit Company, unless the employment has been terminated for one of the specific
    reasons stated in the Rules of the Plan Let’s Share for 2017. In some coun tries, for fiscal reasons, it is not possible to
    grant the “Free Shares” at the beginning of the Enrolment Period: in that case an alternative structure is offered that
    provides to the Participants of those countries the right to receive the “Free Shares” at the end of the Holding Period
    (“Alternative Structure”);
    • Holding Period: during the 1-year Holding Period (from July 2017 to July 2018), the Participants can sell the
    purchased shares at any moment, but by doing so they will lose the “Free Shares” in respect of the number of shares
    sold.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    33
    4.4.3 The termination date of the plan
    The Plan Let’s Share for 2017 will last until July 2018.
    4.4.4 The overall maximum number of financial instruments, also in the form of options,
    assigned over any fiscal years with respect to the beneficiaries namely identified or identified by
    categories, as the case may be
    The Plan Let’s Share for 2017 does not contain an exact indication of the amount based on free shares to be allocated
    to the beneficiaries, rather it merely fixes the maximum and minimum amount they can invest.
    For the Plan Let’s Share for 2017 the total investment has been equal to Euro 9 m. The IFRS2 cost for the offer of the
    free shares received by participants to the Plan Let’s Share 2017 is about Euro 3 m.
    4.4.5 The procedures and clauses for the implementation of the plan, specifying whether
    the assignment of the financial instruments is subject to the satisfaction of certain specific
    conditions and, in particular, to the achievement of specific results, including performance
    targets; a description of the aforesaid conditions and results
    The Plan Let’s Share for 2017 features and implementation clauses are described in the sections 4.3.4 and 4.4.2 above.
    The execution of the Plan Let’s Share for 2017 is not conditioned to the achievement of any result/performance.
    4.4.6 Indication of the restrictions on the availability of the financial instruments allocated
    under the plan or of the financial instruments relating to the exercise of the options, with
    particular reference to the time limits within which the subsequent transfer of the stocks to the
    issuer or third parties is permitted or prohibited
    All the free shares (“Free Shares”) acquired trough the Plan Let’s Share for 2017 are locked-up for one year, during
    which the dividends would be accrued in favour of the Participants; in particular any dividends and other distributions
    arising from the “Free Shares” would be locked during the Holding Period and released (in cash and/or in kind) only at
    the end of this period.
    The participant will lose the ownership of the “Free Share” if, during the 1-year restriction period, he/she will no longer
    be an employee of a UniCredit Company, unless the employment has been terminated for one of the specific reasons
    stated by the Rules of the Plan Let’s Share for 2017.
    4.4.7 Description of any condition subsequent to the plan in connection with the execution, by
    the beneficiaries, of hedging transactions aimed at preventing the effects of potential limits
    to the transfer of the financial instruments assigned there under, also in the form of options,
    as well as to the transfer of the financial instruments relating to the exercise of the aforesaid
    options
    The Plan Let’s Share for 2017 does not provide for conditions subsequent of the type described above.
    4.4.8 Description of the consequences deriving from the termination of the employment or
    working relationship
    a) Leaving employment before the start of the Enrolment Period: if a Participant leaves employment with any
    company of UniCredit before the start of the Enrolment Period, she/he is not entitled to participate in the Plan Let’s
    Share for 2017.
    b) Leaving employment during the Enrolment Period: if a Participant leaves employment with any company of
    UniCredit during the Enrolment Period, the “Investment Shares” already acquired shall not be affected but no
    more “Investment Shares” are bought for her/him and the “Free Shares” allocated to her/him under the Plan will
    lapse. The above mentioned provision will not apply in the event of one of the exceptions set out below. In these
    circumstances no more “Investment Shares” will be bought for her/him but her/his right in relation to “Investment
    Shares” already acquired shall not be affected. In particular, the entitlement to receive all the free shares and to
    dispose of them as soon as practicable could be maintained upon the explicit agreement with the Company and
    subject to the Rules of the Plan Let’s Share for 2017.
    c) Leaving employment after the Enrolment Period but before the Vesting Date: if a Participant leaves
    employment with any company of UniCredit after the end of the Enrolment Period but before the Vesting Date, her/
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    34
    his “Free Shares” will lapse but her/his rights in respect of “Investment Shares” shall not be affected. The above
    mentioned provision will not apply in the event of one of the exceptions set out below. In particular, the entitlement
    to receive all the free shares and to dispose of them as soon as practicable could be maintained upon the explicit
    agreement with the Company and subject to the Rules of the Plan.
    The above mentioned provision will not apply if the Participant dies or leaves employment for any of the following
    reasons provided by the Rules of the Plan Let’s Share for 2017:
    1. ill-health, injury or disability, as established by the Company or the Participant’s employing company;
    2. the Participant’s employing company ceasing to be a Subsidiary;
    3. a transfer (total or partial) of the undertaking in which the Participant works to a legal entity which is not a
    company of UniCredit;
    4. retirement with the agreement of the Participant’s employing company;
    5. re-employment of the Participant in another country with a Member of UniCredit that is not participating in the
    Plan Let’s Share for 2017;
    6. any other reason agreed upon by the Company in the context of a mutual agreement on termination of the
    Participant’s employment relationship.
    The Company must exercise any discretion provided for in this Rule within 90 calendar days after the termination date
    and the Free Shares will be deemed to have lapsed or not (as appropriate) on the termination date.
    4.4.9 Indication of any other provisions which may trigger the cancellation of the plan
    The Plan Let’s Share for 2017 does not provide for any provision which may trigger its cancellation.
    4.4.10 Reasons justifying the redemption, pursuant to sect. 2357 and followings of the Italian
    Civil Code, by UniCredit, of the financial instruments contemplated by the plan; the beneficiaries
    of such redemption, indicating whether the same is limited only to certain categories of
    employees; the consequences of the termination of the employment relationship with respect
    to such redemption rights
    The Plan Let’s Share for 2017 does not provide for the redemption by UniCredit or by another Group company.
    4.4.11 Loans or other special terms that may be granted for the purchase of stocks pursuant to
    sect. 2358, paragraph 3, of the Italian Civil Code
    The Plan Let’s Share for 2017 does not provide for loans or other special terms for the purchase of the shares.
    4.4.12 Evaluation of the economic burden for UniCredit at the date of the assignment of
    the plan, as determined on the basis of the terms and conditions already defined, with
    respect to the aggregate overall amount as well as with respect to each financial instrument
    contemplated by the plan
    The IFRS2 cost for the offer of the free shares received by participants is about Euro 3 m, based on participation rate
    of Group employees equal to 3%, with an employees’ contribution at average amount of Euro 3,700 and Company
    matching equal to a 25% discount. The cost doesn’t include management and administration costs of the Plan that
    are about Euro 0.14 m.
    4.4.13 Indication of any dilution on the corporate capital of the issuer resulting from the
    compensation plan, if any.
    Considering the use of shares to be purchased on the market, the adoption of the Plan Let’s Share for 2017 doesn’t
    have any diluting impact on UniCredit share capital.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    35
    4.4.14 Any limitation to the voting and to the economic rights
    The Plan Let’s Share for 2017 does not provide for any limitation to the voting or economic rights for the “Investment
    Shares”. The economic rights are suspended for the “Free Shares”, because the participants will receive the dividends
    of those shares only at the end of the 1-year lock-up period if, during this period, he/she will remain an employee of
    a UniCredit Company, unless the employment has been terminated for one of the specific reasons stated by the Plan
    Let’s Share for 2017.
    4.4.15 In the event the stocks are not negotiated on a regulated market, any and all information
    necessary for a complete evaluation of the value attributable to them
    The Plan Let’s Share for 2017 provides only for the use of shares negotiated on regulated markets.
    4.4.16 Number of financial instruments belonging to each option
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.17 Termination date of the options
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.18 Modalities, time limits and clauses for the exercise of the options
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.19 The strike price of the options or the criteria and modalities for its determination, with
    respect in particular to:
    a) the formula for the calculation of the exercise price in connection with the fair market value; and to
    b) the modalities for the calculation of the market price assumed as ba\
    sis for the calculation of the exercise
    price
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.20 In case the strike price is different from the fair market value as determined pursuant to
    point 4.4.19.b, the indication of the reasons for such difference
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.21 The criteria justifying differences in the exercise prices between the relevant
    beneficiaries or class of beneficiaries
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.22 In the event the financial instruments underlying granted options are not negotiated on
    a regulated market, the indication of the value attributable to the same or of the criteria for its
    determination
    The Plan Let’s Share for 2017 does not provide for options.
    4.4.23 The criteria for the adjustments required in connection with any extraordinary
    transaction involving the corporate capital of the issuer as well as in connection with
    transaction triggering a variation in the number of the financial instruments underlying granted
    options.
    The Plan Let’s Share for 2017 does not provide for adjustments applicable in connection with extraordinary
    transactions involving UniCredit corporate capital (without prejudice to the provisions that the Board of Directors
    may define in the resolution in which the Board will exercise the delegation received from the General Shareholders’
    Meeting).
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    36
    Name or Category
    (1)
    Capacity
    Box 1
    Financial instruments other than Stock Options (8)
    Section 1
    Instruments related to outstanding plans, approved by previous shareholders meetings’ resolutions
    Date of shareholders meeting resolution
    Type of financial instruments
    (12)
    Number of financial instruments (11)
    Assignment date
    (10)
    Purchase price of financial
    instruments, if any
    Market price at the assignment date
    Vesting period
    (14)
    Jean Pierre Mustier
    AD
    20/04/17
    UniCredit ord.
    521,134
    09/01/2017 cpr 10/01/2017 cda/oc
    0
    13.816
    10/01/201731/12/2022
    Gianni Franco Papa
    GM
    11/05/13
    UniCredit ord.
    3102
    11/03/2014 cpr 11/03/2014 cda/oc
    0
    29.376
    11/03/201431/12/2017
    Gianni Franco Papa
    GM
    13/05/14
    UniCredit ord.
    15914
    01/04/2015 cpr 09/04/2015 cda/oc
    0
    31.416
    09/04/201531/12/2019
    Gianni Franco Papa
    GM
    13/05/15
    UniCredit ord.
    29250
    03/03/2016 cpr 10/03/2016 cda/oc
    0
    17.093
    10/03/201631/12/2019
    Gianni Franco Papa
    DG
    20/04/17
    UniCredit ord.
    521,134
    09/01/2017 cpr 10/01/2017 cda/oc
    0
    13.816
    10/01/201731/12/2022
    4 Key Management Personnel
    11/05/13
    UniCredit ord.
    9898
    11/03/2014 cpr 11/03/2014 cda/oc
    0
    29.376
    11/03/201431/12/2017
    8 Key Management Personnel
    13/05/14
    UniCredit ord.
    59352
    01/04/2015 cpr 09/04/2015 cda/oc
    0
    31.416
    09/04/201531/12/2019
    8 Key Management Personnel
    13/05/15
    UniCredit ord.
    121668
    03/03/2016 cpr 10/03/2016 cda/oc
    0
    17.093
    10/03/201631/12/2019
    3 Key Management Personnel
    14/04/16
    UniCredit ord.
    48,131
    09/03/2017 cpr 13/03/2017 cda/oc
    0
    13.057
    13/03/201731/12/2020
    2 Key Management Personnel
    20/04/17
    UniCredit ord.
    225,824
    09/01/2017 cpr 10/01/2017 cda/oc
    0
    13.816
    10/01/201731/12/2022
    Category of other employees: Managers
    11/05/13
    UniCredit ord.
    124637
    11/03/2014 cpr 11/03/2014 cda/oc
    0
    29.376
    11/03/201431/12/2017
    Category of other employees: Managers
    13/05/14
    UniCredit ord.
    2203321
    01/04/2015 cpr 09/04/2015 cda/oc
    0
    31.416
    09/04/201531/12/2019
    Category of other employees: Managers
    13/05/15
    UniCredit ord.
    3830782
    03/03/2016 cpr 10/03/2016 cda/oc
    0
    17.093
    10/03/201631/12/2019
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    37
    Name or Category
    (1)
    Capacity
    Box 1
    Financial instruments other than Stock Options (8)
    Section 2
    Financial instruments to be assigned on the basis of the decision of:
    - BoD, as to be proposed to shareholders meeting
    -competent Body to implement shareholders meeting resolution (9)
    Date of shareholders meeting resolution
    Type of financial instruments
    (12)
    Number of financial instruments (11)
    Assignment date
    (10)
    Purchase price of financial
    instruments, if any
    Market price at the assignment date
    Vesting period
    (14)
    Jean Pierre Mustier
    CEO
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Gianni Franco Papa
    GM
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Key Management Personnel
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Category of other employees: Managers
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Category of other employees: Managers
    14/04/16
    UniCredit ord.
    2,946,477
    09/03/2017 cpr 13/03/2017 cda/oc
    0
    13.057
    13/03/201731/12/2020
    Category of other employees: Managers
    20/04/17
    UniCredit ord.
    4,026,732
    09/01/2017 cpr 10/01/2017 cda/oc
    0
    13.816
    10/01/201731/12/2022
    Category of other employees: Severance
    13/05/15
    UniCredit ord.
    196,849
    03/03/2016 cpr 10/03/2016 cda/oc
    0
    17.093
    Category of other employees: Severance
    14/04/16
    UniCredit ord.
    46,991
    03/03/2016 cpr 10/03/2016 cda/oc
    0
    17.093
    Category of other employees: Severance
    14/04/16
    UniCredit ord.
    220,220
    30/06/2016 cpr 30/06/2016 cda/oc
    0
    12.253
    Category of other employees: Severance
    14/04/16
    UniCredit ord.
    40,655
    30/06/2016 cpr 30/06/2016 cda/oc
    0
    10.659
    Category of other employees: Severance
    14/04/16
    UniCredit ord.
    100,442
    03/08/2016 cpr 03/08/2016 cda/oc
    0
    10.338
    Category of other employees: Severance
    14/04/16
    UniCredit ord.
    481,126
    09/03/2017 cpr 13/03/2017 cda/oc
    0
    13.057
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    38
    Name or Category
    (1)
    Capacity
    Box 2
    Stock Options Section 1
    Options relating to outstanding plans approved on the basis of previous shareholders meetings’ resolutions (8)\
    Date of shareholders meeting resolution
    Instrument description
    (12)
    Financial instruments underlying the option held at the end of previous year (11) (a)
    Financial instruments underlying the options exercised
    (13) (a)
    Assignment date
    (10)
    Exercise price
    Market price of underlying shares at the assignment date (b)
    Period of possible exercise (from.to)
    Gianni Franco Papa
    CEO
    04/05/04
    UniCredit
    375
    -
    29/06/2004 cpr 22/07/2004 cda/oc
    112,349
    3,945
    03/09/2008 31/12/2017
    Gianni Franco Papa
    CEO
    04/05/04
    UniCredit
    1430
    -
    10/11/2005 cpr 18/11/2005 cda/oc
    134,690
    5,266
    18/11/2009 31/12/2018
    Gianni Franco Papa
    CEO
    12/05/06
    UniCredit
    1076
    -
    07/06/2006 cpr 13/06/2006 cda/oc
    166,398
    5,626
    13/06/2010 31/12/2019
    Gianni Franco Papa
    CEO
    08/05/08
    UniCredit
    4200
    -
    17/06/2008 cpr 25/06/2008 cda/oc
    117,018
    22,893
    09/07/2012 09/07/2018
    4 Key Management Personnel
    04/05/04
    UniCredit
    12230
    -
    29/06/2004 cpr 22/07/2004 bod/oc
    112,349
    3,945
    03/09/2008 31/12/2017
    4 Key Management Personnel
    04/05/04
    UniCredit
    24317
    -
    10/11/2005 cpr 18/11/2005 bod/oc
    134,690
    5,266
    18/11/2009 31/12/2018
    4 Key Management Personnel
    12/05/06
    UniCredit
    23072
    -
    07/06/2006 cpr 13/06/2006 bod/oc
    166,398
    5,626
    13/06/2010 31/12/2019
    5 Key Management Personnel
    08/05/08
    UniCredit
    92750
    -
    17/06/2008 cpr 25/06/2008 bod/oc
    117,018
    22,893
    09/07/2012 09/07/2018
    Category of other employees: Managers
    04/05/04
    UniCredit
    213407
    -
    10/11/2005 cpr 18/11/2005 bod/oc
    112,349
    3,945
    03/09/2008 31/12/2017
    Category of other employees: Managers
    04/05/04
    UniCredit
    461,897
    -
    10/11/2005 cpr 18/11/2005 bod/oc
    134,690
    5,266
    18/11/2009 31/12/2018
    Category of other employees: Managers
    12/05/06
    UniCredit
    362,505
    -
    07/06/2006 cpr 13/06/2006 bod/oc
    166,398
    5,626
    13/06/2010 31/12/2019
    Category of other employees: Managers
    08/05/08
    UniCredit
    1,687,459
    -
    17/06/2008 cpr 25/06/2008 bod/oc
    117,018
    22,893
    09/07/2012 09/07/2018
    (a) The data are referred to the number of Financial instruments underlying the options assigned and not forfeited accordingly to the long term incentive plans as at December 31, 2017 and have been adjusted because of the capital operation resolved by UniCredit General Meeting on April 29, 2009 (script dividend), on November 15, 2009, on December 16, 2011 and on January 12, 2017.b) The market price of the financial instruments at the assignment date for plan 2004, 2005 and 2006 has not been adjusted because of the capital operation.
    Annex 2 to 2018 Group Compensation Policy • UniCredit


    39
    Name or Category
    (1)
    Capacity
    Box 2
    Stock Options Section 2
    Options to be assigned on the basis of the decision of:- BoD, as to be proposed to shareholders meeting
    X competent Body to implement shareholders meeting resolution (9)
    Date of shareholders meeting resolution
    Instrument description
    (12)
    Number of options
    Assignment date
    (10)
    Exercise price
    Market price of underlying shares at the assignment date
    Period of possible exercise (from.to)
    Jean Pierre Mustier
    CEO
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Gianni Franco Papa
    GM
    N.A.
    UniCredit ord.
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Key Management Personnel
    N.A.
    UniCredit
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    Category of other employees: Managers
    N.A.
    UniCredit
    N.A.
    N.A.
    N.A.
    N.A.
    N.A.
    (1) The issuer shall fill-in a line for each beneficiary namely identified as well as for each category contemplated by the plan;
    for each individual or category shall be indicated a specific line for: i) each type of financial instrument or option granted (e.g., different exercise prices and/or exercise dates imply different type of options); ii) each plan approved by different shareholders’ meetings.
    (2) Indicate the name of the members of the board of directors or management body of the issuer and of its subsidiaries or
    parent companies.
    (3) Indicate the name of the General Manager of the shares issuer.(4) Indicate the name of the individuals controlling the issuer of stocks, who are employee or who render their services to the
    issuer of stock without being employee of the same.
    (5) Indicate the name of other executives with strategic responsibilities of the shares issuer not classed as “small”, in
    accordance with Article 3, paragraph 1, letter f ) of Regulation no. 17221 of March 12, 2010, if they have, during the course of the year, received total compensation (obtained by adding the monetary compensation to the financial instrument-based compensation) in excess of the highest total compensation assigned to the members of the board of directors or management board, and to the general managers of the financial instrument issuer
    (6) Indicate the category of executives with strategic responsibilities for whom there is an indication by category is(7) Indicate the category of other employees and the category of collaborators not employed by the issuer. The issuer shall
    fill-in different lines in connection with the categories of employees or collaborators for which the plan provides for different characteristics (e.g., managers, officers, employees).
    (8) The relevant data shall refer to financial instruments relating to plans approved by means of:
    • shareholders’ resolutions adopted prior to the date on which the competent corporate body approves the proposal to the shareholders’ meeting and/or• shareholders’ resolutions adopted prior to the date on which the competent corporate body implements the shareholders’ resolution; therefore the table shall indicate:- in the event under i) above, data adjourned as at the date of the competent body’s proposal to the shareholders’ meeting (in which case the table is attached to the information document prepared for the shareholders’ meeting called to approve the plan);- in the event under ii) above, data adjourned as at the date of the competent body’s resolution implementing the plan, (in which case the table is attached to the information documents to be published following the competent body’s
    resolution implementing the plan);
    (9) The data may refer to:
    • the resolution of the board of directors preceding the shareholders’ meeting, as to the table attached to the information document submitted to the same; in such event the table shall indicate only the characteristics already defined by the board of directors;• the resolution of the corporate body which resolves upon the implementation of the plan following the approval by the shareholders’ meeting, in the event the table is attached to the press release to be issued following such last resolution implementing the plan.In both the aforesaid cases the issuer shall cross out the corresponding box relating to this footnote No. 9. For the data not available the issuer shall indicate in the corresponding box the code “N.A.” (Not available).
    (10) In case the date of the assignment is different from the date on which the remuneration body (comitato per la
    remunerazione), if any, makes the proposal relating to such assignment, the issuer shall indicate also the date of such proposal highlighting the date of the board of directors or the competent corporate body’s resolution with the code “cda/oc” (for the board of directors/competent body) and the date of the proposal of the remuneration body (comitato per la remunerazione) with the code “cpr” (for the remuneration body).
    (11) The number of options held at the end year, preceding the date in which the shareholder’s meeting is called resolve the
    new allocation
    (12) Indicate for example, in box 1: i) stock of issuer X, ii) financial instrument indexed to issuer Y stock value, and in box 2: iii)
    option on issuer W stock with physical settlement; iv) option on issuer Z stock with cash settlement, etc.
    (12) The number of option exercised from the beginning of the plan until the end year, preceding the date in which the
    shareholder’s meeting is called to resolve a new stock option plan.
    (12) Vesting period means the period between the moment in which the right to participate to the incentive system is granted
    and the moment in which the right may be exercised.
    (13) Numero di opzioni esercitate dall’inizio del piano fino alla fine dell’esercizio precedente a quello in cui l’assemblea è
    chiamata ad approvare un nuovo piano di stock option.
    (14) Per periodo di vesting si intende il periodo intercorrente tra il momento in cui viene assegnato il diritto a partecipare al
    sistema di incentivazione e quello in cui il diritto matura.
    UniCredit • Annex 2 to 2018 Group Compensation Policy


    unicreditgroup.eu


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  • 2018
    Group Compensation Policy


    Letter from the Chairman
    Section I. Executive Summary
    Our Compensation Policy
    Section II. Group Compensation Policy
    1. Introduction
    2. Governance
    3. Fundamentals
    4. Compensation Structure
    Section III. Annual Compensation Report
    1. Introduction
    2. Governance and Compliance
    3. Continuous Monitoring of Market Trends and Practices
    4. Compensation to Directors, Statutory Auditors and Executives
    with Strategic Responsibilities
    5. Group Compensation Systems
    6. Group Employee Share Ownership Plan
    7. Compensation Data
    4
    6
    18
    34
    Contents


    4 5
    Dear Shareholders,
    our compensation policies are an integral
    part of our strategy, remuneration practices
    are therefore designed to enable the
    achievement of business targets and to
    ensure full alignment to the risk management
    framework, in compliance to national and
    international regulatory requirements.
    We are consequently committed to designing
    compensation systems that reflect the group’s
    and individual performance sustainability
    and to set pay levels, aligned to market
    benchmarks, capable to attract, reward and
    retain the best people.
    Letter from
    the Chairman
    In 2017, we implemented
    all the changes to our
    compensation framework,
    announced at the same time as
    the Strategic Plan presentation,
    underpinning a strong alignment
    between management and
    shareholders. In 2018, we confirm
    our policy main pillars together
    with a compensation framework
    substantially unchanged, furtherly
    emphasizing the importance
    of compliance culture and
    individual conduct vis-à-vis the
    remuneration approach.
    Alessandro Caltagirone
    Chairman of the Remuneration Commitee
    Since the end of 2016, all of our colleagues
    have been focused on the execution of the
    2016-2019 Strategic Plan, Transform 2019 ,
    which encompasses all the major areas of the
    Bank. Transform 2019 is fully on track and is
    delivering tangible results, all the 2019 key
    targets have been confirmed, with an improved
    risk profile.
    In this context, in 2017, we implemented all
    the changes to the compensation framework,
    announced at the same time as the Strategic
    Plan presentation, underpinning a strong
    alignment between management and
    shareholders.
    In particular, among others, we reviewed the
    variable compensation structure, envisaging,
    for group senior management, a wider long
    term component, represented by the
    Long-Term Incentive Plan (LTIP), based on the
    Transform 2019 key performance indicators
    and combined with the Strategic Plan horizon.
    In 2018, we confirm the policy main pillars
    together with a compensation framework
    substantially unchanged, furtherly emphasizing
    the importance of compliance culture and
    individual conduct vis-à-vis the remuneration
    approach.
    Moreover, we re-affirm the relevance of
    effective and clear communication with
    shareholders, by providing, with the support of
    different tools, both comprehensive disclosure
    on our practices and more concise information
    on the main important elements of the
    compensation policy.
    On this point, I would like to, once again, thank
    the investors for being available to constructively
    exchange views with us, aiming at understanding
    and addressing mutual needs.
    Finally, let me express my gratitude to
    my fellow members of the Remuneration
    Committee for their cooperation and their
    contribution to our common activities during
    the past years. Also on their behalf, I would
    like to convey our best wishes to our successors.
    Sincerely,
    Alessandro Caltagirone
    Chairman of the
    Remuneration Commitee
    Group Compensation Policy 2018 • UniCredit UniCredit • Group Compensation Policy 2018



    Executive
    Summary
    Section I


    8 9
    1.2 Compensation benchmarking and policy target
    Confirmation of the peer group for compensation benchmarking, performed by an external advisor.
    Definition of specific peer group at country/division level to assure competitive alignment with the market of reference.
    Details
    Section III-Chapter 3
    With specific reference to the group Executive population, the
    Remuneration Committee, supported by an independent external
    advisor, confirmed the list of selected competitors that represent
    our group-level peers for compensation benchmarking (disclosed
    on chapter 3, Compensation Report). Compensation benchmarking
    analysis is performed in comparison to this peer group.
    The Identified Staff population has been updated ensuring full
    compliance with current regulations. The identification followed
    a structured evaluation process both at group and local level,
    based on the application of qualitative and quantitative criteria
    As a policy target, the fixed compensation of Identified Staff
    (Material Risk Takers) is set on the market median as reference,
    with individual positioning being defined on the basis of specific
    performance, potential and people strategy decisions, as well as
    UniCredit’s performance over time.
    common at European level. The result of the evaluation process for
    the definition of Identified Staff has led to the identification of ca.
    1.000 resources for 2018.
    1.3 Identified Staff (Material Risk Takers) definition
    Application of qualitative and quantitative criteria, which are common at European level, as defined by EBA RTS.
    Details
    Section III-Paragraph 5.1
    Policy standards ensure that compensation is aligned to business
    objectives, market reality and shareholders’ long term interests.
    UniCredit’s compensation approach has been consolidated over
    time under our group governance, to be compliant with the most
    recent national and international regulatory requirements. Our
    approach is connected to performance, market awareness, and to
    be aligned with business strategy and shareholders’ interests.
    The key pillars of our Group Compensation Policy (Section II)
    reflect the most recent regulations in terms of remuneration and
    incentive policies and practices, in order to build on year-by-year-
    in the interest of all stakeholders - remuneration systems aligned
    with long - term strategies and goals. These are linked with
    company results and adequately adjusted in order to take into
    account for all risks, consistent with capital and liquidity levels
    needed to support all activities and to avoid distorted incentives
    that could lead to breach of law or to excessive risk taking.
    1. Our Compensation Policy
    The implementation of the principles set in our Group Compensation Policy provides the framework for the
    design of the reward programs across the group.
    Our Group Compensation Policy is an integral part of
    our strategy.
    In December 2016, the CEO Jean Pierre Mustier announced
    the review of the compensation strategy and the main
    elements of the new framework in connection to the
    2016-2019 Strategic Plan Transform 2019 (in the following
    also “Strategic Plan Transform 2019 ” or “ Transform 2019 ”).
    On December 12, 2017, an update on the execution of
    Transform 2019 , of which implementation is fully on track,
    was presented to analysts and investors at a Capital Markets
    Day in London.
    A specific description is reported in the Annual
    Compensation Report.
    Focus Transform 2019
    See Section III for more information
    1.1 Key Pillars
    Clear and transparent governance.
    Compliance with regulatory requirements and principles of good business conduct.
    Continuous monitoring of market trends and practices.
    Sustainable pay for sustainable performance.
    Motivation and retention of all employees, with particular focus on talents and mission-critical resources.
    The key pillars of our Group Compensation Policy ensure a
    correct definition of competitive compensation levels, internal
    equity and transparency.
    Group Compensation Policy is aligned to the latest national and
    international regulatory requirements. 1
    1. i.e. Capital Requirement Direc tive IV (CRD IV); EBA Regulator y Technical Standards (RTS); Bank of Italy “Disposizioni di vigilanza per le Banche”, Circular n.285 of December 17, 2013, 7th update of November 18, 2014.
    Full compliance with compensation policies and processes is
    assured through the involvement of Company Control Functions,
    such as Compliance, Audit and Risk Management that also
    guarantee the coherence with the Risk Appetite Framework, in line
    with sector regulations.
    Details
    Section II-Chapter 1
    Section I
    Executive Summary - 1. Our Compensation Policy
    Section I
    Executive Summary - 1. Our Compensation Policy
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    1.6 Incentive system linked to the annual performance
    1.5 Compliance breach, Malus and Claw-back
    The Group Incentive System 2018, that confirms the “bonus pool” approach introduced in 2014, provides for a strong link between
    remuneration, risk and sustainable profitability.
    Such a system provides for an overall performance assessment both at individual level and at group/country /division level.
    The group reserves the right to activate malus and claw-back mechanisms, namely the reduction/cancelation and the return
    respectively of any form of variable compensation.
    9 bonus pools whose size is linked to the profitability of each
    country/division.
    Entry Conditions: a mechanism that determines the possible
    application of the malus clause (Zero Factor), on the basis of
    performance indicators in terms of profitability, capital and
    liquidity defined at both group and country /division level.
    Adjustments to the bonus pools driven by the evaluation of the
    risk and sustainability for each country/division (alignment to
    the Group Risk Appetite Framework).
    Bonus allocation: the incentive is allocated managerially,
    taking into consideration the available bonus pool, the individual
    performance evaluation based on risk-adjusted indicators and
    specific reference value for each position.
    Payout: individual bonus is composed of 50% cash and 50%
    shares for Identified Staff; paid out over a period up to 6 years,
    ensuring alignment with shareholders’ interests and subject to
    malus and claw-back conditions, as legally enforceable.
    Details
    Section III-Paragraph 5.3
    Details
    Section II-Paragraph 3.2
    1.7 Performance measurement
    Review of the “KPI Bluebook” that supports manager and incumbent to define the Performance Screen referring to the annual
    Incentive System for the Identified Staff.
    Details
    Section III-Paragraph 5.4
    According to the EBA guidelines 4 and to further strengthen the
    governance framework, the key rules of compliance breaches
    management, as well as, their related impact on remuneration
    components, through the application of both malus and claw-back
    clauses, are reported in the Group Compensation Policy .
    The KPI Bluebook supports the definition of Performance Screens
    providing a set of performance indicators and guidelines.
    The categories of the main economic and non economic group
    indicators, annually defined within the KPI Bluebook, are certified
    with the involvement of Human Capital, Finance, Risk Management,
    Compliance, Group Sustainability, Group Stakeholder Insight and
    Internal Audit functions, which reflect the group’s core operating
    profitability and risk profile. The KPI Bluebook includes KPIs defined
    within the scope of the Strategic Plan Transform 2019.
    1.4 Ratio between variable and fixed compensation
    In compliance with the regulatory requirements, the 2:1 ratio represents the maximum limit between variable and fixed components
    of remuneration for all employees belonging to business functions, including Identified Staff.
    2. As approved by the Annual General Meeting on May 13, 2014.3. In par ticular, for the Identified Staf f of Italian Company Control Func tions, the ratio between the variable and the fixed components of remuneration cannot exceed the limit of one third, as per BankIT provision (Circular n. 285 Dec 17, 2013, 7th update of November 18, 2014).4. “Guidelines on sound remuneration policies”, published on June 27, 2016.
    Details
    Section II-Paragraph 3.1
    In compliance with applicable regulations, it has not changed -
    for the personnel belonging to the business functions - the
    adoption of a maximum ratio between variable and fixed
    remuneration of 2:1 2.
    For the rest of the staff a maximum ratio between the
    components of remuneration equal to 1:1 is usually adopted,
    except for the staff of the Company Control Functions, for which
    it is expected that fixed remuneration is a predominant component
    of total remuneration and incentive mechanisms are consistent
    with the assigned tasks, as well as being independent of results
    from areas under their control.
    For these functions, in particular, the maximum weight of the
    variable component will take into account the differences between
    national rules and regulations in application of Directive 2013/36 /
    EU in the various countries in which the group operates 3, in order to
    ensure equal operating conditions in the market and the ability to
    attract and retain individuals with professionalism and capabilities
    adequate to meet the needs of the group.
    The adoption of a ratio of 2:1 between variable and fixed
    compensation must not have any implications on the bank’s
    capability to continue to respect all prudential rules, in particular
    capital requirements.
    This approach allows UniCredit to maintain a strong link between
    pay and performance, as well as competitiveness in the market. Our
    main peers have also taken the same approach in order to limit the
    effects of the un-even playing field in market where the cap is not
    present, to avoid the rigidity of the cost structure derived from a
    possible increase of fixed costs and to guarantee the alignment with
    multi-year performance, through deferring a relevant component of
    the variable compensation.
    Section I
    Executive Summary - 1. Our Compensation Policy
    Section I
    Executive Summary - 1. Our Compensation Policy
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    1.8 2017-2019 Long Term Incentive System
    1.9 Share ownership guidelines
    A Long Term Incentive Plan has been introduced in 2017 with the aim to align senior management 5 interests to long term value creation
    for the shareholders, share price and group performance appreciation, as well as sustaining sound and prudent risk management.
    Share ownership guidelines set minimum levels for company share ownership by relevant Executives 6, by ensuring appropriate
    levels of personal investment in UniCredit shares over time. As part of our total compensation approach, we offer equity incentives
    which provide for opportunities of share ownership, in full alignment with the applicable regulation requirements.
    The Plan provides for the allocation of incentives based on shares,
    subject to the achievement of specific performance indicators
    aligned to the Strategic Plan Transform 2019.
    The Plan is structured around a 3-year performance period ,
    consistent with the UniCredit Strategic Plan, and provides for the
    allocation of the possible award after the end of 2019.
    At the end of 2011, the Board of Directors approved the share
    ownership guidelines applied to the Chief Executive Officer,
    General Manager and Deputy General Manager roles, if any.
    On March 2017 the Board of Directors of UniCredit approved
    an update of the above mentioned share ownership guidelines,
    extending their application to Senior Executive Vice President
    and Executive Vice President positions, taking into consideration
    the roles that are currently covered, with the aim of aligning
    The award is subject to a 3-year deferral period, after the
    performance period, and to the application of a cumulative Zero
    Factor condition , providing for the respect of minimum conditions
    of profitability, liquidity and capital position.
    In line with regulatory requirements additional holding periods are
    applied at the end of the deferral period.
    managerial interests to those of shareholders’ for the execution of
    the 2016-2019 Strategic Plan Transform 2019 .
    The established levels should be reached, as a rule, within 5 years
    from the appointment in the above indicated Executives categories
    within the scope of the guidelines and should be maintained until
    the role is held. The achievement of the share ownership levels
    should be accomplished through a pro rata approach over 5 year
    period, granting a minimum amount of shares each year.
    Details
    Section III-Paragraph 5.5
    Details
    Section II-Paragraph 3.5
    5. The Identified Staf f of Company Control Func tions are not included in the Plan.6. Considering the application, from 2016, of the new ratio between the variable and the fixed components of remuneration (which cannot exceed the limit of one third for the Identified Staf f within Italian Control Func tions, while fixed remuneration is expec ted to be the predominant component for the Control Func tions of other geographies), share ownership guidelines are not applied to the Executives who are par t of Company Control Func tions.
    1.11 2017 results and compensation decisions
    › 2017 Results
    On December 12, 2016 the Board of Directors of UniCredit S.p.A.
    approved the 2016-2019 Strategic Plan, Transform 2019, which, on
    the day after, was presented to analysts and investors.
    The Plan Transform 2019 was produced with the aim of maintaining a
    level of profitability that is sustainable over time, using the leverage of
    a simple commercial bank business model, strengthening cross-selling
    activities (i.e. commercial synergies) and offering customers access to
    an extensive network of branches.
    On December 12, 2017, an update on the execution of the 2016-2019
    Strategic Plan Transform 2019 was presented to analysts and investors
    at a Capital Markets Day in London.
    The implementation of Transform 2019 is fully on track, all 2019
    targets are confirmed with an improved risk profile.
    Transform 2019 is ahead of schedule and is yielding tangible results:
    • Strengthen and optimise capital: all decisive actions to strengthen
    and optimise capital were successfully completed during FY17,
    thanks to the fully subscribed € 13 bn rights issue and the disposals
    of Bank Pekao and Pioneer. FY17 fully loaded CET1 ratio reached
    13.60%, 13.02% pro forma of IFRS9 and FINO.
    • Improve asset quality : the group balance sheet de-risking
    continued in 4Q17 with gross NPE further down to € 48.4 bn in 4Q17
    from € 51.3 bn in 3Q17. The risk profile of the group improved, with
    gross NPE ratio reduced to 10.2% in 4Q17 (49 bps Q/Q, -163 bps
    Y/Y). The coverage ratio remained solid at 56.2% in 4Q17. Net NPE
    decreased to € 21.2 bn (-5.1% Q/Q, -15.2%Y/Y) and net NPE ratio
    dropped to 4.7% in 4Q17 (-22 bps Q/Q, -89 bps Y/Y).
    • Transform operating model: the transformation of the operating
    model is ahead of plan. Since December 2015 branch closures
    have progressed well with 682 branches closed in Western Europe,
    corresponding to 72% of 944 planned closures by 2019. 7
    There was an additional Q/Q reduction of 2,113 FTEs 8, corresponding
    to a decrease of about 9,000 FTEs since December 2015, 64% of the
    14,000 planned reductions by 2019.
    In addition, the simplification of IT complexity is progressing with
    the decommissioning of 921 applications, 84% compared to 2019
    target.
    • Maximise commercial bank value: commercial initiatives are in
    place across the group, delivering tangible results. In particular during
    2017:
    7. Retail branches in Italy, Germany and Austria as indicated during the Capital Markets Day.8 Full Time Equivalent.
    An update of the policy on payments to be agreed in case of
    early termination of a contract (so called “severance payments”),
    with more restrictive provisions, was approved by the Annual
    General Meeting on April, 20 2017, according to the regulatory
    requirements issued by Bank of Italy in “ Disposizioni di vigilanza
    per le banche” (Circular n.285 of December 17, 2013, 7th update of
    November 18, 2014).
    1.10 Severance payments
    Continuous alignment with regulations/contractual frameworks from time to time in force.
    Severance payouts take into consideration long-term performance, in terms of shareholders’ added-value. They do not reward
    failures or abuses and shall not exceed in general 24 months of total compensation, including notice (in case of lack of law /
    National Labour agreement provisions as locally applicable).
    Details
    Section II-Paragraph 3.3
    Section I
    Executive Summary - 1. Our Compensation Policy
    Section I
    Executive Summary - 1. Our Compensation Policy
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    • AuM net sales in Commercial Banking Italy reached € 11 bn at the
    end of December, three times higher than FY16, with AuM-related
    commissions up 28% FY/FY;
    • new “Smart” or “Cashless” branch formats with a higher degree of
    automation were implemented in 441 retail branches in Italy out
    of 800 targeted by 2019;
    • new service models were implemented in Italy for the affluent
    and small business client segments and in Germany for
    small-medium enterprises.
    In FY17, UniCredit ranked #1 in “Syndicated Loans in EUR” in Italy,
    Germany, Austria and CEE as well as in “EMEA Covered Bonds”, #1 by
    number of transactions in “EMEA Bonds in EUR” and “Combined EMEA
    Bonds and Loans in EUR”, #1 in IPO in Italy and #2 in IPO in Germany. 9
    • Adopt a lean but steering group Corporate Centre (GCC): since
    December 2015, GCC FTEs were down 12.4% (-2,200 FTEs), a trend
    confirmed both in 4Q17 and in the FY17. The ratio of GCC costs to
    group total costs was 4.1% in FY17, down by 0.3 bps FY/FY (5.1% as
    at December 2015) versus the 2019 target of 3.5%.
    Details
    Section III-Paragraph 5.2
    87134
    11%
    8%4% 7%8%
    11%
    49%
    2%AG
    CIB
    CEE
    UCB AG
    SUB CB GER CBAT CBI TA CEO&COOFunctions 2017
    2016
    152
    2015
    -12%
    Group CB GermanyCB Austria
    CB Italy
    AG
    +74%
    3.3
    5.7
    +137%
    0.9
    2.0 +28% +34%
    0.6 0.4
    0.8 0.5
    CEE CIB
    Data in bn.
    Bonus pool performance metrics pre bonus: Net Operating Profit (Commercial Banking Italy, Commercial Banking Germany, Commercial Banking Austria, CEE);
    Net Operating Profit Group; Profit Before Taxes (AG); GOP-EL-CoC (CIB).
    %vs 2017 budget calculated neutralizing interest rate effects, performance not including some not-recurrent one-offs.
    2016 group Net Operating Profit adjusted excluding ~ €-8.3 bn one offs respectively referred to additional LLP (~-8.0 bn), operating costs one-offs, mainly IT related
    (~-0,6 bn) and revenues one offs (~+0,3 bn), mainly related to Visa Europe gain.
    Bonus pool performance metrics (pre bonus)
    FY 2016FY 2017 % vs 2017 budget
    +3%
    0.3 0.3
    +10% -6%
    1.9 1.7
    2.1
    1.6
    +19% +5% +30% +33%
    +8% +21% +39%
    › Compensation decisions
    With reference to 2017, the UniCredit Board of Directors considered the
    proposals of the Remuneration Committee and the guidelines of the
    regulatory authorities on variable remuneration.
    The evaluation regarding compensation decisions, as done before in
    the previous years, was supported by a rigorous group governance
    process in order to guarantee coherence and transparency for all the
    participants involved.
    For 2017, no annual bonus is envisaged for the CEO and the General
    Manager, as, until 2019, their variable compensation is entirely covered
    by the LTI Plan 2017-2019, tied to the Strategic Plan Transform 2019
    targets.
    In line with group governance, 2017 assessment and payment for the
    other Executives with strategic responsibilities perimeter have been
    reviewed by the Remuneration Committee and approved by the Board
    of Directors, heard the Statutory Auditors and Internal Controls and
    Risks Committee as relevant.
    The Board of Directors approved the following distribution of the bonus
    for the Identified Staff population (ca. 1,100 resources), defined on
    the basis of the application of the 2017 Group Incentive System rules
    approved by the Shareholders’ Meeting:
    › Our Compensation Disclosure
    The Annual Compensation Report (Section III) provides the description
    of our compensation practices and the implementation outcomes of
    Group Incentive Systems, as well as remuneration data with a focus
    on non-executive Directors and Identified Staff, defined in line with
    regulatory requirements.
    Full disclosure on compensation payout amounts, deferrals and
    the ratio between variable and fixed components of remuneration
    for Identified Staff is provided in the Annual Compensation Report
    (Section III-paragraph 7.1), including data regarding Directors, General
    Managers and other Executives with strategic responsibilities
    categories.
    Data pursuant sect. 84-quarter Consob Issuers Regulation Nr. 11971,
    Compensation report-Section II, as well as the information on incentive
    systems under 114-bis of legislative decree 58/1998 (“Testo Unico
    della Finanza” - “TUF”) are included in the attachments to the 2018
    Group Compensation Policy, published on UniCredit’s website, in the
    section dedicated to 2018 Shareholders’ Meeting.
    9. All league tables were based on Dealogic source as at 5 Januar y 2018. Period: 1 Jan.-31 Dec. 2017. Rankings by volume unless other wise stated.
    Data in m. 2017 not including 2017-2019 LTI pro-rata grant (not awarded) equal to 23 m.
    Section I
    Executive Summary - 1. Our Compensation Policy
    Section I
    Executive Summary - 1. Our Compensation Policy
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    1.12 Chief Executive Officer and General Manager
    variable and fixed compensation data
    As per the request by the CEO Jean Pierre Mustier to the Board of
    Directors in 2016, to set the right tone from the top, as well as to
    fully align his interests with all stakeholders, specific conditions are
    applied to his remuneration effective January 1, 2017.
    In particular, his fixed remuneration was reduced by 40%. With
    reference to 2017, the Chief Executive Officer therefore received
    a total fixed remuneration of € 1.2 m, including director’s
    remuneration.
    The General Manager received in 2017 a total fixed remuneration of
    € 1.2 m.
    Neither the CEO nor the General Manager received any annual bonus
    f o r 2 0 1 7.
    As already announced in 2016 during the Strategic Plan
    presentation to analysts and investors, until 2019 their variable pay
    is entirely based on the 2017-2019 Long Term Incentive Plan, tied to
    Transform 2019 targets.
    In the following picture, the remuneration of the CEO and the
    General Manager is represented in connection to the performance
    of UniCredit over the past two years.
    Consistently with the decision adopted by the Board of Directors on
    March 13, 2016, no variable remuneration was paid for 2016.
    Details
    Section III-Paragraph 5.2
    20162017
    2016 2017
    GROUP GENERAL MANAGER
    GROUP NET OPERATING PROFIT
    GROUP CHIEF EXECUTIVE OFFICER
    Link between pay and performance
    5,664
    3,261 1.2
    1.2
    Fixed remuneration
    2016
    2017
    2.0
    1.2
    It has to be noticed that the Group CEO and the GM, although they are not assigned the
    annual bonus, participate in the 2017-2019 LTI Plan for maximum 521,134 shares
    each. The award of the shares, total or partial, will be evaluated after the end of 2019.
    Data in m.2016 group Net Operating Profit adjusted excluding ~ € -8.3 bn one of fs respec tively referred to additional LLP (~-8.0 bn), Operating Costs one-of fs, mainly IT related (~-0,6 bn) and Revenues one of fs (~+0,3 bn), mainly related to Visa Europe gain.
    1.13 Ex ante disclosure of 2017-2019 goals for Chief
    Executive Officer and General Manager
    For the whole time horizon of the Strategic Plan Transform 2019 ,
    the variable remuneration for the Group Chief Executive Officer
    and the General Manager is covered by the 2017-2019 Long Term
    An update on the LTI Plan progress status was provided to the
    Remuneration Committee on February 6, 2018. All the entry
    conditions (gateways&risk adjustment) were met in 2017, while
    the Company results referred to the LTI Plan KPIs are fully on track
    towards 2019 targets achievement.
    Only to contextualize the progress status, and with no impact on
    2019 assessment, 2017 results on the LTI KPIs are:
    • ROAC 12.1% (2017 target 9.1%) 10;
    • Cost/Income ratio 57.9% (2017 target 60.9%);
    • Net NPE € 21.2 bn (2017 target € 23.2 bn).
    Incentive Plan, tied to Strategic Plan targets and overall aligned to
    the Risk Appetite Framework.
    The related performance scorecard is shown below:
    The actual evaluation of the overall LTI Plan, including the appraisal
    of performance targets, will be carried out at the end of the three
    years performance period (i.e. at the end of 2019 on end-of-Plan
    targets).
    Details
    Section III-Paragraph 5.5
    A Net Non Performing Exposure (after provisions)B Linear progression (eg. 50% payout for ROAC at 8.5%)
    KPIPerimeter
    ROAC Weight
    Target
    Transform 2019
    Value
    creation
    Cost/
    Income ratio Industrial
    sustainability
    NET A NPE Group
    Group
    Group
    9%
    52%
    20.2 bn
    50%
    25%
    25% Risk
    Assessment criteria
    Treshold Payout
    ≥ 9%
    8% - 9%
    < 8% 100%
    0% - 100%
    B
    0%
    ≤ 52%
    55% - 52%
    > 55% 100%
    0% - 100%
    B
    0%
    ≤ 20.2 bn
    22 - 20.2 bn
    > 22 bn 100%
    0% - 100%
    B
    0%
    10. ROAC at 12.5% CE T1 ratio target (allocated capital based on CE T1 ratio target constant at 2019 level).
    Section I
    Executive Summary - 1. Our Compensation Policy
    Section I
    Executive Summary - 1. Our Compensation Policy
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    Group
    Compensation
    Policy
    Section II 1. Introduction
    2. Governance
    2.1 Role of the Remuneration Committee
    2.2 Market Benchmark
    2.3 Definition of the Group Compensation
    Policy
    2.4 Role of the Compliance Function
    2.5 Role of the Risk Management Function
    2.6 Role of the Internal Audit Function
    2.7 Identified Staff identification process
    3. Fundamentals
    3.1 Ratio between variable and fixed
    compensation
    3.2 Sustainability of the variable
    compensation
    3.2.1 Definition of performance targets
    3.2.2 Performance appraisal
    3.2.3 Payment of the variable
    compensation
    3.3 Severance
    3.4 Non-standard compensation
    3.5 Share ownership guidelines
    3.6 Compliance drivers
    4. Compensation Structure
    4.1 Fixed compensation
    4.2 Variable compensation
    4.2.1 Short Term Incentive Systems
    4.2.2 Long Term Incentive Systems
    4.3 Benefits


    21 20
    By upholding the standards of sustainability behaviors and values
    which drive our group mission, compensation strategy represents
    a key enabler to enhance and protect our reputation and to create
    long-term value for all group stakeholders.
    Through appropriate compensation mechanisms, we aim to
    create a work environment which is comprehensive in its diversity,
    fostering and unlocking individual potential in order to attract,
    retain and motivate a highly qualified global workforce capable of
    creating a competitive advantage. We also aim to reward those
    who reflect our standards of ethical behavior in the conducting
    business in a sustainable way.
    Relying on our governance model, our Group Compensation
    Policy sets the framework for a coherent and consistent design,
    implementation and monitoring of compensation practices across
    the entire group.
    1. Introduction
    Our set of values is based on integrity as a sustainable condition to transform profit into value for our
    stakeholders.
    Within this common policy framework, guidelines are defined
    to implement compensation programs and plans that reinforce
    sound risk management policies and our long-term strategy. In
    doing so, we effectively meet the specific and evolving needs of our
    different businesses, market contexts and employee populations
    while ensuring that business and people strategies are always
    appropriately aligned with our remuneration approach.
    To ensure the competitiveness and effectiveness of remuneration
    as well as transparency and internal equity, the principles of
    sustainable conduct and performance define the key pillars of our
    Group Compensation Policy.
    Clear and transparent governance, through efficient corporate and organizational governance
    structures, as well as clear and rigorous governance and rules.
    Motivation and retention of all
    employees, with particular focus on
    talents and mission-critical resources, with the aim to attract, motivate and retain the best resources capable of achieving our company mission in adherence to our group values. Continuous monitoring of
    market trends and practices
    and awareness of international practices, aimed at sound
    formulation of competitive
    compensation as well as at
    transparency and internal equity.
    Sustainable pay for
    sustainable performance,
    by maintaining consistency between remuneration and performance, and between
    rewards and long-term stakeholder value creation, as well as
    enhancing both the actual result
    achieved and the means by which they are achieved.
    Compliance with regulatory
    requirements and principles of good business conduct,
    by protecting and enhancing our company reputation, as well as
    avoiding or managing conflicts of interest between roles within the group or vis-à-vis customers.
    KEY
    PILLARS
    In order to foster an efficient information and advisory system to
    enable the Board to assess better the topics for which it is responsible,
    pursuant to the Supervisory Authority provisions on corporate
    governance and with the ones of the Corporate Governance Code of
    Listed Companies (“Corporate Governance Code”), the Remuneration
    Committee has been established among Board members, vested with
    research, advisory and proposal - making powers.
    In particular, the Remuneration Committee is entrusted with the
    role of providing advice, opinions and proposals submitted to the
    Board of Directors with regard to the group remuneration strategy.
    The Remuneration Committee relies on the support of Group Risk
    Management and Group Compliance functions, respectively for the
    topics under their scope. Moreover, the Committee may avail itself of
    advisors, even external, to ensure that remuneration and incentive
    systems are consistent with the Bank’s risk, capital and liquidity
    profiles (e.g. regarding the remuneration policy for corporate officers).
    The Chairman of the Remuneration Committee in the first following
    meeting informs the Board of Directors about the activities carried
    out by the Committee itself.
    The main topics discussed by the Committee are also submitted to
    the attention of the Board of Statutory Auditors, in advance over their
    submission to the Board of Directors.
    The Remuneration Committee, instituted in 2000, consists of
    At group level, we analyze the overall compensation trends of the
    market through a continuous benchmarking activity (comparison), in
    order to make informed decisions about our compensation approach
    and to adopt competitive reward structures for effective retention and
    motivation of our critical resources.
    With specific reference to the group Executive population, an
    independent external advisor supports the definition of a list of selected
    competitors that represent our international group-level peers (peer
    group) with regards to whom compensation benchmarking analysis is
    performed on market trends, practices and compensation levels.
    2. Governance
    Our compensation governance model aims to assure clarity and reliability of remuneration decisional
    processes by controlling group - wide remuneration practices and ensuring that decisions are made in
    an independent, informed and timely manner at appropriate levels, avoiding conflicts of interest and
    guaranteeing appropriate disclosure in full respect of the general principles defined by regulators.
    2.1 Role of the Remuneration Committee
    2.2 Market Benchmark
    maximum 5 non-executive members, the majority of whom are
    independent according to the Articles of Association, in line with
    the Corporate Governance Code of Listed Companies (“Corporate
    Governance Code”) guidelines. The Chairman of the Remuneration
    Committee is chosen among independent members. The Chairman of
    the Board of Directors is a member by right.
    In the context of UniCredit’s governance review launched in 2016
    with the objective to align the Bank’s governance with international
    best practices, the Company may review the composition of the
    Remuneration Committee.
    As recalled by the Board of Directors 1, specialist Committees must
    consist of 3-5 members, all non-executives and mostly independent,
    in line with the Supervisory Regulations on bank’s corporate
    governance, issued by Bank of Italy.
    It should be noted that the above mentioned international best
    practices have Remuneration Committees that tend to be smaller and
    are composed only by independent members.
    The peer group is defined by the Remuneration Committee considering
    our main European competitors in terms of market capitalization, total
    assets, business scope and dimension.
    At country/division level and as appropriate throughout the
    organization, benchmarking and trends analysis may be conducted
    considering relevant peer groups to assure competitive alignment with
    the market of reference.
    1. “Qualitative and quantitative composition of the UniCredit S.p.A. Board of Direc tors”, Februar y 2018, available on the Corporate Website.
    Section II
    Group Compensation Policy - 2. Governance
    UniCredit ? Group Compensation Policy 2018
    Section II
    Group Compensation Policy - 1. Introduction
    Group Compensation Policy 2018 ? UniCredit


    22 23
    The Compliance function operates in close co-ordination with the
    Human Resources function, in order to support the design and the
    definition of compensation policy and processes and to evaluate
    them for the profiles in scope.
    In particular, Compliance function, through its structures,
    evaluates, for all aspects that fall within its perimeter, the Group
    Compensation Policy and, referring to local Regulations, the
    incentive systems for group personnel as drawn up by HR function.
    It provides input, as far as it is concerned, for the design - by HR
    functions - of compliant incentive systems.
    The Group Incentive System for Identified Staff is defined by Group
    Human Capital function, with the involvement and collaboration
    of Group Risk Management and Finance functions, for the overall
    qualitative assessment of economic sustainability and of risk, and
    UniCredit ensures the alignment between remuneration and
    risk through policies that support risk management, rigorous
    governance processes based on informed decisions taken by
    corporate bodies and the definition of compensation plans that
    include the strategic risk appetite defined by the Risk Appetite
    Framework, the time horizon and individual behaviors.
    The Risk Management function is constantly involved in the
    definition of the remuneration policy, incentive system and
    compensation processes, in the identification of objectives, for
    As part of the remuneration system governance process, the
    Internal Audit function annually assesses the implementation of
    remuneration policies and practices and performs checks on data
    and processes. The function assesses compensation practices,
    Identified Staff population (i.e. those categories of staff whose
    professional activities have a material impact on an institution’s risk
    profile) is yearly defined on the basis of a structured and formalized
    assessment process both at group and local level, according to the
    regulatory requirements defined by CRD IV and the application of
    2.4 Role of the Compliance Function
    2.5 Role of the Risk Management Function
    2.6 Role of the Internal Audit Function
    2.7 Identified Staff identification process
    Compliance function. This is to ensure consistency with the goal of
    complying with regulations, articles of association and any other
    code of ethics or other standards of conduct applicable to the
    bank, so that legal and reputational risks mostly embedded in the
    relationship with customers are duly contained (ref. Bank of Italy).
    Compliance function is also involved in the assessment process
    for the definition of the group’s Identified Staff population, for all
    compliance-related aspects. In accordance with the regulatory
    framework and our governance, the guidelines for the definition
    of the incentive systems for non-Identified Staff population
    are arranged by Group HR function, in collaboration with Group
    Compliance function. At local level, the HR structures define the
    detailed features of incentive systems and submit them to the
    reference Compliance structures.
    the performance appraisal as well as for the assessment process
    to define the group’s Identified Staff population. This involvement
    implies explicit link between the group incentive mechanisms,
    selected metrics of the Risk Appetite Framework, the validation
    of performance and pay, so that the assumption of risk is properly
    bound to incentives related to risk management.
    providing recommendations aimed at improving the overall
    process and bringing to the attention of the relevant bodies any
    weaknesses, for the adoption of corrective measures.
    qualitative and quantitative criteria set by Regulatory Technical
    Standards issued by EBA. This process is internally defined through
    specific guidelines issued by Group HR function, with the involvement
    of Group Risk Management and Group Compliance, in order to
    guarantee a common standard approach at group level.
    On an annual basis, the Group Compensation Policy, as proposed by
    the Remuneration Committee, is defined by the Board of Directors,
    and then presented to the shareholders’ Annual General Meeting for
    approval, in line with regulatory requirements.
    In particular, the Group Compensation Policy is drawn up by the Group
    HR function with the involvement of the Group Risk Management
    functions and is validated by the Group Compliance function for
    all compliance-related aspects, before being submitted to the
    Remuneration Committee.
    Once approved at the UniCredit Annual General Meeting, the Policy is
    formally adopted by competent bodies in the relevant Legal Entities
    across the group in accordance with applicable local legal and
    regulatory requirements.
    2.3 Definition of the Group Compensation Policy
    The principles of the Group Compensation Policy apply across
    the entire organization and shall be reflected in all remuneration
    practices applying to all employee categories across all businesses,
    including staff belonging to external distribution networks,
    considering their remuneration specifics.
    With specific reference to Identified Staff, the Group HR function
    establishes guidelines and coordinates a centralized and consistent
    management of compensation and incentive systems. Regarding
    other employees, as relevant and appropriate for each category,
    division, competence line and country are accountable for compliance
    to the Group Policy.
    Section II
    Group Compensation Policy - 2. Governance
    Section II
    Group Compensation Policy - 2. Governance
    Gr \225 UniCredit UniCredit \225 Gr


    24 25
    In compliance with applicable regulations, the adoption of a
    maximum ratio between variable and fixed remuneration of 2:1 2
    has not changed - for the personnel belonging to the business
    functions.
    For the rest of the staff, a maximum ratio between the
    components of remuneration equal to 1:1 is usually adopted,
    except for the staff who are Company Control Functions 3, for
    which it is expected that the fixed remuneration is a predominant
    component of total remuneration and incentive mechanisms
    are consistent with the assigned tasks as well as independent
    of results from areas under their control. For these functions, in
    particular, the maximum weight of the variable component will
    take into account the differences between national rules and
    Performance is evaluated in terms of risk-adjusted profitability and
    risk-weighted systems and mechanisms are provided.
    Incentive systems must not in any way induce risk-taking behaviors in
    excess of the group’s strategic risk appetite; in particular they should
    be coherent to the Risk Appetite Framework (“RAF”).
    3.2.1 Definition of performance targets
    • Consider the customer as the central focus of our mission, placing
    customer satisfaction in the forefront of all incentive systems, at all
    levels, both internally and externally;
    • design forward-looking incentive plans which balance internal key
    value driver achievement with external measures of value creation
    relative to the market;
    • use both absolute and relative performance achievement metrics as
    appropriate and relevant, where relative performance measures are
    based on comparison of achieved results to those of market peers;
    3. Fundamentals
    regulations in application of Directive 2013/36/EU in the various
    countries in which the group operates 4. This helps to ensure equal
    operating conditions in the market and the ability to attract and
    retain individuals with professionalism and capabilities adequate
    to the needs of the group.
    The Holding Company provides specific guidelines to the Legal
    Entities about the application of the ratio between variable and
    fixed remuneration for different segments of the population.
    The adoption of a ratio of 2:1 between variable and fixed
    compensation must not have any implication on bank’s capacity
    to continue to respect all prudential rules, in particular capital
    requirements.
    • consider performance on the basis of annual achievements and their
    impact over time;
    • include reflection of the impact of individual’s/business units’ return
    on the overall value of related business groups and organization as
    a whole;
    • maintain an adequate mix of economic goals with non-economic
    (quantitative and qualitative) objectives, considering also
    other performance measures as appropriate, for example risk
    management, adherence to group values or other behaviors;
    • it is crucial to avoid measures linked to economic results for
    Company Control Functions (Internal Audit, Risk Management 5,
    Compliance, and HR);
    • the approach for Company Control Functions is also recommended
    where possible conflicts may arise due to the function’s activities.
    In particular, this is the case of functions (if any) performing only
    control activities pursuant to internal/external regulations such as
    some structures in Accounting/Tax structures; 6
    3.1 Ratio between variable and fixed compensation
    3.2 Sustainability of the variable compensation
    2. As resolved by the Annual General Meeting on May 13, 2014 in line with regulator y requirements.3. Meaning Internal Audit, Risk Management, Compliance and Human Resources func tions. Human Resources func tion is considered Company Control Func tion, as far as remuneration and incentive policies and prac tices are concerned, pursuant to Bank of Italy Circular n.285 of December 17, 2013, 7th update of November 18, 2014.4. In par ticular, for the Identified Staf f of Italian Company Control Func tions, the ratio between the variable and the fixed components of remuneration cannot exceed the limit of one third, as per BankIT provision (Circular n.285 of December 17, 2013, 7th update of November 18, 2014 ).5. Where CRO roles cover both Under writing and Risk Management func tions, goals assigned must not represent a source of conflic t of interest between Risk Management and Under writing activities.6. Where CFO roles cover also Financial Statements preparation, possible economic measures have to be chosen in a conflic t - avoidance perspec tive.
    • assure independence between front and back office functions in
    order to guarantee the effectiveness of cross-checks and avoid
    conflict of interest, with a particular focus on trading activities,
    as well as ensuring the appropriate independence levels for the
    functions performing control activities;
    • an appropriate mix between short and long-term variable
    compensation is set, as applicable, and relevant on the basis of
    market and business specifics and line of sight, and in line with
    group long term interests.
    3.2.2 Performance appraisal
    • Base performance evaluation upon profitability, financial solidity
    and sustainability, and other drivers of sustainable business practice
    with particular reference to risk, cost of capital and efficiency;
    • design flexible incentive systems such as to manage payout levels in
    consideration of overall group, country/division performance results
    and individual achievements, adopting a meritocratic approach to
    selective performance-based reward;
    • design incentive systems to set minimum performance thresholds
    below which zero bonus will be paid. In order to maintain the
    adequate independence levels for Company Control Functions
    provide a maximum threshold for the progressive reduction of the
    bonus pool, which can be phased out to zero only in presence of
    exceptionally negative situations with an approval process including
    a governance step in the Board of Directors;
    • guarantee that evaluations and appraisals linked to compensation
    are, as far as possible, available for the scrutiny of independent
    checks and controls;
    • evaluate all incentive systems, programs and plans taking into
    consideration how they enhance our overall company reputation.
    3.2.3 Payment of the variable compensation
    • As foreseen by regulatory requirements, defer performance-
    based incentive payout to coincide with the risk timeframe of such
    performance by subjecting the payout of any deferred component
    until actual sustainable performance has been demonstrated
    and maintained over the deferral timeframe, so that the variable
    remuneration takes into account the time trend of the risks
    assumed by the bank (i.e. malus mechanisms);
    • consider claw-back actions as legally enforceable on any
    performance-based incentive paid out on the basis of a pretext
    subsequently proven to be erroneous;
    • include clauses for zero bonus in circumstances of non-compliant
    behavior or qualified disciplinary action, subjecting payout to the
    absence of any proceeding undertaken by the company for irregular
    activities or misconduct of the employee with particular reference to
    risk underwriting, sales processes of banking and financial products
    and services, internal code of conduct or values breach;
    • envisage the compliance mandatory trainings completion, within a
    pre-defined threshold, for bonus eligibility;
    • employees are required to undertake not to use personal hedging
    strategies or remuneration and liability - related insurance
    to undermine the risk alignment effects embedded in their
    remuneration arrangements.
    Section II
    Group Compensation Policy - 3. Fundamentals
    Section II
    Group Compensation Policy - 3. Fundamentals
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    26 27
    According to the regulatory requirements issued by Bank of Italy
    in “Disposizioni di vigilanza per le banche” (Circular n.285 of
    December 17, 2013, 7th update of November 18, 2014), a specific
    Policy on payments to be agreed in case of early termination of
    a contract (so called Severance Policy) was firstly submitted for
    approval to the 2015 Annual General Meeting.
    An update of that policy with more restrictive provisions, was
    approved by the 2017 Annual General Meeting.
    For details on criteria, limits and authorization processes, please
    refer to the above mentioned Policy.
    Generally speaking, the calculation of any severance payment
    takes into consideration the long-term performance in terms of
    shareholder added-value, as well as any local legal requirements,
    collective /individual contractual provisions, and any individual
    circumstances, including the reason for termination.
    According to the Severance Policy, as approved by the 2017 Annual
    General Meeting, severance payments, inclusive of notice, do not
    exceed 24 months of total compensation (including the base salary
    and the average amount of the incentives actually received during
    the last three years prior to the termination, after the application
    of malus and claw-back, if any). It is also foreseen that the amount
    of the payments additional to notice cannot exceed 18 months
    of compensation. In any case, the termination payments, which
    consider also the duration of the employment, do not exceed the
    limits foreseen by the laws and collective labor agreements locally
    applicable in case of lay-off.
    As a rule, discretionary pension benefits are not granted and, in
    any case, even if they might be provided in the context of local
    practices and/or, exceptionally, within individual agreements, they
    would be paid consistently with the specific and applicable laws
    and regulations.
    Individual contracts should not contain clauses envisaging the
    payment of indemnities, or the right to keep post-retirement
    benefits, in the event of resignations or dismissal/revocation
    without just cause or if the employment relationship is terminated
    following a public purchase offer. In case of early termination of the
    mandate, the ordinary law provisions would therefore apply.
    3.3 Severance
    7. Employees and independent contrac tors, including personal financial advisors. 8. “Guidelines on sound remuneration policies”, published on June 27, 2016.
    FOCUS
    Compliance breach, Malus and Claw-back
    The group reserves the right to activate malus and claw-back
    mechanisms, namely the reduction/cancelation and the return
    respectively of any form of variable compensation.
    Malus mechanism (the reduction/cancelation of all or part of the
    variable remuneration) can be activated to the variable remuneration
    to be awarded or that has already been awarded and has not yet been
    paid out, for the year in which the breach occurred. If the affected
    variable remuneration is not sufficiently large to ensure an appropriate
    malus mechanism, the reduction may be applied also to other variable
    remuneration components.
    Claw-back mechanism (the return of all or part of the variable
    remuneration) can be activated on the overall variable remuneration
    already paid, awarded for the time period during which the breach
    occurred, unless different provisions by local regulations or more
    restrictive provisions are in force.
    The claw-back mechanisms can be activated up to a period of at least 4
    years after the payment of each installment, also after the employee’s
    contract termination and/or the end of the appointment and take into
    account legal, social contributions and fiscal profiles and the time limits
    prescribed by local regulations and applicable practices.
    Malus and claw-back mechanisms may apply in the case of verification
    of behaviors adopted in the reference period (performance period), for
    which the employee 7:
    • contributed with fraudulent behavior or gross negligence to the
    group incurring significant financial losses, or by his/her conduct
    had a negative impact on the risk profile or on other regulatory
    requirements at group or country/division level;
    • engaged in misconduct and/or fails to take expected actions which
    contributed to significant reputational harm to the group or to the
    country/division, or which were subject to disciplinary measures by
    the Authority;
    • is the subject of disciplinary measures and initiatives envisaged in
    respect of fraudulent behavior or characterized by gross negligence
    during the reference period;
    • infringed the requirements set out by articles 26 TUB and 53 TUB,
    where applicable, or the obligations regarding the remuneration and
    incentive system.
    Malus mechanisms are also applied to take into account the
    performance net of the risks actually assumed or achieved, the
    performance related to the balance sheet and liquidity situation.
    According to the EBA guidelines 8 and to further strengthen the
    governance framework, the key rules of compliance breaches
    management, as well as, their related impact on remuneration
    components, through the application of both malus and claw-back
    clauses, are reported in the followings.
    Specific guidelines about the application of the Compliance Breach
    procedure to be adopted throughout the group will be formalized
    and provided by the Holding Company to the Legal Entities. Local
    adaptations, consistent with the overall group approach, can be
    required by the Legal Entities and are subject to the positive opinion
    of the Holding Company, in order to take into account the differences
    between national rules and regulations in the various countries in which
    the group operates.
    The process is specifically applicable to the Identified Staff population,
    as per regulatory provisions, while general principles are applicable
    to all individuals 7 within the group who are beneficiaries of variable
    remuneration.
    The main elements of the Compliance Breach procedure are the
    followings:
    • breaches identification, based on the roles and responsibilities of
    the functions involved according to their ordinary activities. The
    identification is based both on internal and external sources (e.g
    special investigation, disciplinary sanctions, regulatory sanctions, etc.);
    • breaches evaluation, based on the assessment of the breach
    materiality following a scoring system, from lowest to highest value.
    The drivers of materiality assessment are:
    • gravity of the individual conduct, including the circumstances of a
    law violation;
    • nature (fraud or gross negligence) of the trigger event;
    • repetitiveness of the breach;
    • impact on financials;
    • seniority of the individual;
    • organizational role;
    • impact on the group external reputation;
    • other circumstances aggravating or mitigating the reported breach;
    • in coherence with the score assigned and the reference period of the
    breach, the impact on the variable remuneration is defined according
    to two elements:
    • perimeter of the variable remuneration (upfront quote, current
    deferred quotes, future deferred quotes) that can be be reduced/
    cancelled based on predefined scenarios, according to the
    breach materiality. In case of heavy breaches, fulfilling certain
    pre-conditions, the claw-back (return) of already paid variable
    remuneration may be activated;
    • percentage of the variable remuneration that can be reduced/
    returned back;
    • breaches evaluation and final proposal for measures to be adopted are
    defined by a dedicated “Compliance Breach Committee” composed
    by representatives of Compliance, Risk Management, Human Capital
    and Internal Audit functions and, upon request, the line Manager
    responsible of the employee;
    • decision making process and relevant measure adoption are defined
    according to internal delegated powers scheme.
    For Executive Directors and Executives with strategic responsibilities
    specific contractual provisions are envisaged, that allow the Company
    to ask to return, partially or totally, of the variable remuneration
    components already paid (or retain deferred amounts), defined
    according to data proved to be wrong at a later time.
    Section II
    Group Compensation Policy - 3. Fundamentals
    Section II
    Group Compensation Policy - 3. Fundamentals
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    28 29
    9. Considering the application, from 2016, of the new ratio between the variable and the fixed components of remuneration (which cannot exceed the limit of one third for the Identified Staf f within Italian Control Func tions, while fixed remuneration is expec ted to be the predominant component for the Control Func tions of other geographies), share ownership guidelines are not applied to Executives who are par t of Company Control Func tions.
    Share ownership guidelines set minimum levels for company share
    ownership by relevant Executives 9, aiming to align managerial
    interests to those of shareholders by assuring appropriate levels of
    personal investment in UniCredit shares over time.
    As part of our total compensation approach, we offer equity
    incentives that provide for opportunities of share ownership, in fully
    alignment with the applicable regulation requirements.
    The ownership of UniCredit shares by our group leaders is a
    meaningful and visible way to show our investors, the public and our
    people that we believe in our Company.
    The Board approved at the end of 2011 the share ownership
    guidelines applied to the Chief Executive Officer, to General Manager
    and Deputy General Manager roles, if any.
    On March 2017 the Board of Directors of UniCredit approved an
    update of the above mentioned share ownership guidelines, as
    reported in the following table, extending their application to Senior
    Executive Vice President and Executive Vice President positions,
    taking into consideration the roles that are currently covered. 9
    This has the aim of aligning managerial interests to those of
    shareholders’ for the achievement of the 2016-2019 Strategic Plan
    Transform 2019 objectives, as presented to the market during a
    Capital Markets Day on December 13, 2016.
    The established levels should be reached, as a rule, within 5 years
    from the appointment to the above indicated Executives categories
    within the scope of the guidelines and should be maintained until the
    role is held.
    The achievement of the share ownership levels should be
    accomplished through a pro-rata approach over a 5 year period,
    granting the minimum amount of shares each year, taking into
    consideration potential vested plans.
    Involved Executives are also expected to refrain from entering into
    schemes or arrangements that specifically protect the unvested value
    of equity granted under incentive plans (so called “hedging”).
    Such clauses are contained in all relevant incentive plan rules
    and apply to all beneficiaries, since involvement in such schemes
    undermines the purpose of the incentive at risk.
    Any form of violation of share ownership guidelines as well as any
    form of hedging transaction shall be considered in breach of group
    compliance policies with such consequences as provided for under
    enforceable rules, provisions and procedures.
    Local adaptations based on specific regulations and /or business shall
    be envisaged consistently with our group global approach.
    3.5 Share ownership guidelines
    annual basesalary
    Share ownership guidelines
    Chief Executive Officer and General Manager
    Senior Executive Vice Presidents
    Executive Vice Presidents
    2 X
    annual base
    salary 1 X
    annual base
    salary 0.5 X
    Non-standard compensation are those compensation elements
    considered as exceptions (e.g. welcome bonus, guaranteed bonus,
    special award, retention bonus).
    Such awards are limited only to specific situations, as appropriate,
    to hiring phases, launch of special projects, achievement of
    extraordinary results, and high risk of leaving for group Executives and
    mission critical roles.
    3.4 Non-standard compensation
    Moreover, awards must in any case be in accordance with regulations
    in force from time to time (e.g. cap on the ratio between variable
    and fixed remuneration; clear identification of fixed and variable
    components, in line with relevant regulation, technical features fixed
    by regulation for bonus payout, if applicable) and subject to UniCredit
    governance processes, periodically monitored and disclosed for
    regulatory requirements, as well as subject to malus conditions and
    claw-back actions, as legally enforceable.
    To support the design of remuneration and incentive systems, with
    particular reference to network roles and Governance Functions, the
    following “compliance drivers” have been defined:
    • maintenance of an adequate ratio between economic and
    non-economic goals (depending on the role, but in general at least
    one goal should be non-economic);
    • qualitative measures must be accompanied by an ex ante indication
    of objective parameters to be considered in the evaluation, the
    descriptions of expected performance and the person in charge for
    the evaluation;
    • non-economic quantitative measures should be related to an area
    for which the employee perceives a direct link between her/his
    performance and the trend of the indicator;
    • among the non-financial goals (quantitative and qualitative),
    include, where relevant, goals related to Risk as well as to
    Compliance (e.g. credit quality, operational risks, application of
    MIFID principles, products sales quality, respect of the customer,
    Anti Money Laundering requirements fulfillment);
    • set and communicate ex-ante clear and pre-defined parameters as
    drivers of individual performance;
    • avoidance of incentives with excessively short timeframes (e.g. less
    than three months);
    • promotion of a customer-centric approach which places customer
    needs and satisfaction at the forefront and which will not constitute
    an incentive to sell unsuitable products to clients;
    • take into account, even in remuneration systems of the external
    networks (financial advisors), the principles of fairness in relation
    with customers, management of legal and reputational risks,
    protection and loyalty of customers, compliance with the provisions
    of law, regulatory requirements, and applicable self-regulations;
    • create incentives that are appropriate in avoiding potential conflicts
    of interest with customers, considering fairness in dealing with
    customers and the endorsement of appropriate business conduct;
    • economic goals must be avoided for Company Control Functions 10
    and individual goals set for employees in these functions shall
    reflect primarily the performance of their own function and be
    independent of results of monitored areas, in order to avoid conflict
    of interest;
    • define incentives that are not only based on financial parameters
    for personnel providing investment services and activities, taking
    into account the qualitative aspects of the performance; this in
    order to avoid potential conflicts of interest in the relationship with
    customers; 11
    • the approach for Control Functions is also recommended where
    possible conflicts may arise due to function’s activities. This is the
    case in particular of functions of the Company (if any) performing
    only control activities pursuant to internal/external regulations; 12
    • avoidance of incentives on a single product/financial instrument
    or specific categories of financial instruments, as well as single
    banking/insurance product;
    • for commercial network roles, goals shall be defined including
    drivers on quality/riskiness /sustainability of the products sold, in
    line with client risk profile. Particular attention shall be paid to the
    provision of non-economic goals for customer facing roles selling
    products covered by MiFID. For these employees, incentives must be
    set in order to avoid potential conflict of interest with customers;
    • all rewarding system communication and reporting phases
    shall clearly indicate that the final evaluation of the employee
    achievements will also rely, according to local requirements on
    qualitative criteria such as the adherence to:
    • the obligations arising from the provisions and regulations
    pertinent to all relevant laws, rules and UniCredit policies and
    instructions;
    • core values;
    • employees mandatory trainings;
    • principles of the Code of Conduct;
    • maintenance of adequate balance of fixed and variable
    compensation elements also with due regard to the role and the
    nature of the business performed. The fixed portion is maintained
    sufficiently high in order to allow the variable part to decrease, and
    in some extreme cases to drop down to zero;
    10. Meaning Internal Audit, Risk Management, Compliance and Human Resources func tions. Human Resources func tion is considered Company Control Func tion, as far as remuneration and incentive policies and prac tices are concerned, pursuant to Bank of Italy Circular n.285 of December 17, 2013, 7th update of November 18, 2014. Where CRO roles cover both Under writing and Risk Management func tions, goals assigned must not represent a source of conflic t of interest between Risk Management and Under writing ac tivities.11. As for example: ESMA requirements, with reference to MIFID remuneration policies and prac tices; Technical Advice ESMA on MiFid II (Final Repor t 2014/1569); MiFiD II specific ar ticles regarding remuneration/incentives for relevant subjects.12. E.g. Accounting/ Tax struc tures. Where CFO roles cover also Financial Statements preparation, possible economic measures have to be chosen in a conflic t - avoidance perspec tive.
    3.6 Compliance drivers
    Section II
    Group Compensation Policy - 3. Fundamentals
    Section II
    Group Compensation Policy - 3. Fundamentals
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    31 30
    Commercial Campaigns
    Within network roles incentive systems, particular attention is paid
    to ‘Commercial Campaigns’.
    Such Campaigns may be organized after the evaluation and
    authorization of the competent Product Committee. They represent
    business actions aimed at providing guidance to the sales network
    towards the achievement of the period’s commercial targets (also
    intermediate, for instance on a half-year basis) and with a direct
    impact on the budget and related incentive systems.
    Among the distinctive features of commercial campaigns, there is
    the expectation of the award - in cash or non - monetary reward.
    Commercial campaigns can also help the function to accelerate
    the achievement of certain objectives of the incentive system. The
    grant of awards related to a Campaign must be subordinated to
    behaviours compliant with the external and internal regulations.
    Under no circumstances may the system of remuneration and
    evaluation of the sales network employees constitute an incentive
    to sell products unsuitable to the financial needs of the clients.
    In particular, the following “compliance drivers” have been defined:
    • setting-up of the incentive mechanisms using criteria which are
    consistent with the best interest of the client, and which avoid
    in any case conditions of potential conflicts of interest with
    customers, and coherently with relevant regulatory provisions
    (e.g. MiFID);
    • ensuring consistency between a Campaign’s objectives with the
    objectives set when defining the budget and when assigning
    targets to the sales network;
    • avoidance of Commercial campaigns on a single financial or
    banking product/financial instrument;
    • inclusion of clauses for zero bonus payment in case of relevant
    non-compliant behavior or qualified disciplinary actions;
    • avoidance of campaigns which - not being grounded on objective
    and customer interests related basis - may directly or indirectly
    lead to breaching the rules of conduct regarding clients;
    • avoidance of campaigns lacking a clear indication of the targets
    and of the maximum level of incentive to be granted for
    achieving those targets;
    • avoidance, in general, of campaigns that link incentives not only
    to the targets assigned to specific roles/structures (e.g. advisors,
    agencies) but also to higher hierarchical levels or to the budget of
    the higher territorial structure.
    Within the framework provided by the “Group Compensation
    Policy”, UniCredit is committed to ensuring fair treatment in terms
    of compensation and benefits regardless of age, race, culture,
    gender, disability, sexual orientation, religion, political belief and
    marital status.
    Our total compensation approach provides for a balanced package
    of fixed and variable, monetary and non-monetary elements,
    each designed to impact, in a specific manner the motivation and
    retention of employees.
    In line with the applicable regulations, particular attention is paid
    to avoid incentive elements in variable compensation which may
    induce behaviors not aligned with the company’s sustainable
    business results and risk appetite.
    As policy target, Identified Staff fixed compensation 14 is set on
    the market median as reference, with individual positioning being
    defined on the basis of specific performance, potential and people
    strategy decisions, as well as UniCredit performance over time.
    With particular reference to the group Executive population, the
    Board of Directors, on the basis of the proposal of Remuneration
    Committee, establishes the compensation structure for top
    positions, defining the mix of fixed and variable compensation
    4. Compensation Structure
    elements, consistent with market trends and internal analysis
    performed.
    Moreover, the Board of Directors annually approves the criteria and
    features of the incentive plans for Identified Staff, ensuring the
    appropriate balance of variable reward opportunities within the
    pay-mix structure.
    For non-executive Directors and members of the auditing bodies, in
    line with the regulatory provisions, any incentive mechanism based
    on stock options or, generally, based on financial instruments is
    avoided. The remuneration for these Directors and members is
    represented only by a fixed component, determined on the basis
    of the importance of the role, of any additional assignments and
    commitment required to perform the tasks. Remuneration is not
    linked to the economic results achieved at group and/or country/
    division level.
    As required by the “Disposizioni di Vigilanza”, the level of
    remuneration for the Chairman doesn’t exceed the fixed
    component of the one received by the Chief Executive Officer.
    The remuneration policy for members of corporate bodies of the
    group Legal Entities is based on the same principles, consistently
    with the local regulatory requirements.
    14. Considering the dif ferences between national rules and regulations - also in application of Direc tive 2013/36 / EU - in terms of maximum incidence of the variable component, the individual positioning can take into account the total compensation.
    › Definition
    The Base Salary remunerates the role covered and the scope of
    responsibilities, reflecting the experience and skills required for
    each position, as well as the level of excellence demonstrated and
    the overall quality of the contribution to business results.
    › Objective
    Base salary is appropriate in the specific market for the business
    in which an individual works and for the talents, skills and
    competencies that the individual brings to the group.
    The relevance of fixed compensation weight is sufficient to reward
    the activity rendered even if the variable part of the remuneration
    package were not paid due to non-achievement of performance
    goals such as to reduce the risk of excessively risk - oriented
    behaviors, to discourage initiatives focused on short - term results
    and to allow a flexible bonus approach.
    4.1 Fixed compensation
    › Features
    Specific pay-mix guidelines for the weight of fixed versus variable
    compensation are defined with respect to each target employee
    population. With particular reference to the group Executive
    population, the UniCredit Remuneration Committee establishes:
    • the criteria and guidelines to perform market benchmarking
    analysis for each position in terms of compensation levels and
    pay-mix structure, including the definition of specific peer groups
    at group, country/divisional level and the list of preferred external
    “executive compensation providers”;
    • the positioning of compensation, in line with relevant market’s
    competitive levels, defining operational guidelines to perform
    single compensation reviews as necessary.
    • the entire evaluation process must be conveniently put in writing
    and documented;
    • in cases where individual performance evaluation systems are fully
    or partially focused on a managerial discretional approach, the
    evaluation parameters should be defined ex-ante. These parameters
    should be clear and documented to the manager in due time for
    the evaluation period. Such parameters should reflect all applicable
    regulation requirements 13 (including the balance between
    quantitative and qualitative parameters). The results of managerial
    discretional evaluation should be formalized for the adequate and
    predefined monitoring process by the proper functions and an
    appropriate repository should be created and maintained (e.g. of
    inspections/request from the Authorities).
    13. Also in line with the regulation references repor ted in the previous notes.
    Section II
    Group Compensation Policy - 4. Compensation Structure
    UniCredit ? Group Compensation Policy 2018
    Section II
    Group Compensation Policy - 3. Fundamentals
    Group Compensation Policy 2018 ? UniCredit


    32 33
    › Definition
    The variable compensation includes payments depending on
    performance, independently from how it is measured (profitability/
    revenues/other goals) or on other parameters (e.g. length of
    service).
    › Objective
    Variable compensation aims to remunerate achievements by
    directly linking pay to performance outcomes in the short, medium
    and long term. This is then risk adjusted.
    To strengthen the alignment of shareholders’ interest and
    the interests of management and employees, performance
    measurement reflects the actual results of the Company overall,
    the business unit of reference and the individual. As such,
    variable compensation constitutes a mechanism of meritocratic
    differentiation and selectivity.
    › Features
    Adequate range and managerial flexibility in performance-
    based payouts are an inherent characteristic of well - managed,
    accountable and sustainable variable compensation, which may be
    awarded via mechanisms differing by time horizon and typology of
    reward.
    Incentives remunerate the achievement of performance objectives,
    both quantitative and qualitative, by providing for a variable
    bonus payment. An appropriately balanced performance-based
    4.2 Variable compensation
    compensation element is encouraged for all employee categories
    as a key driver of motivation and alignment with organizational
    goals, and is set as a policy requirement for all business roles.
    The design features, including performance measures and pay
    mechanisms, must avoid an excessive short-term focus by
    reflecting the principles of the Policy, focusing on parameters
    linked to profitability and sound risk management, in order to
    guarantee sustainable performance in the medium and long
    term. In alignment with the overall mission, the characteristics
    of incentive systems also reflect the requirements of specialized
    businesses.
    More details on the design of remuneration and incentive
    systems, with particular reference to network roles and company
    governance functions, are reported in the section “Compliance
    Driver s”.
    With particular reference to trading roles and activities,
    organizational governance and processes as well as
    risk-management practices provide the structure for a compliant
    and sound approach, whereby levels of risk assumed are defined
    (using specific indicators, for example Value at Risk) and monitored
    centrally by the relevant group functions. This structure reinforces
    the consistent remuneration approach which adopts performance
    measures based on profitability rather than revenues, and
    risk-adjusted rather than absolute indicators.
    FOCUS
    Group common guidelines on the key elements of Executive
    contracts ensure alignment with regulatory requirements and also
    with the Internal Audit recommendations, in particular regarding
    contract elements with specific regulatory provisions, such as
    variable compensation and severance provisions.
    Group guidelines provide for the eligibility to variable compensation
    to be mentioned in the Executive contracts. Amounts related to
    variable pay and any technical details of payments (vehicles used,
    payment structure, and time schedule) are included in separate
    communication and managed in strict adherence to governance
    and delegation of authority rules.
    4.2.1 Short Term Incentive Systems (STI)
    Short term incentive systems aim to attract, motivate and retain
    strategic resources and maintain full alignment with the latest
    national and international regulatory requirements and with best
    market practices.
    Payout is based on a bonus pool approach providing for a
    comprehensive performance measurement at individual and at
    group/country/division level.
    Reward is directly linked to performance, which is evaluated
    on the basis of results achieved and on the alignment with our
    leadership model and values.
    The Executive Development Plan (EDP) as the group-wide
    framework for Identified Staff performance management
    is a cornerstone of fair and coherent appraisal across the
    organization.
    The payout is phased to coincide with an appropriate risk time
    horizon. The design features of incentive plans for Identified
    Staff are aligned with shareholder interests and long-term,
    firm-wide profitability, providing for an appropriate allocation of
    a performance related incentives in cash and in shares, upfront
    and deferred.
    Each year, detailed information about our compensation
    governance, key figures and the features of group incentive
    systems is fully disclosed in the Annual Compensation Report.
    4.2.2 Long Term Incentive Systems (LTI)
    Long Term Incentive Plans aim to strengthen the link between
    variable compensation and Company results and further align the
    interests of senior management and shareholders.
    The Plan provides for:
    • the allocation - subject to the achievement of specific
    performance conditions - for future incentives based on shares or
    other instruments reflecting the trend of the share;
    • a performance period aligned with UniCredit strategic targets;
    • performance conditions based on a comprehensive scorecard
    including, for example, financial and sustainability targets plus an
    overarching Board assessment;
    • multi-year deferral with the application of a cumulated Zero
    factor condition, which provides for minimum requirements
    related to profitability, liquidity and capital;
    • the application of an holding period of the actual awards after the
    deferral period;
    • awards subject to claw-back conditions, as legally enforceable.
    › Definition
    Benefits include welfare benefits that are supplementary to social
    security plans, healthcare and work-life balance benefits and are
    intended to provide substantial guarantees for the well-being of
    staff and their family members during their active career as well as
    their retirement.
    In addition, special terms and conditions of access to various
    banking products and other services may be offered to employees
    in order to support them during different stages of their lives.
    › Objective
    From a total compensation perspective, benefits aim to reflect
    internal equity and overall coherence of the remuneration systems,
    meeting the needs of different categories as appropriate and
    relevant.
    › Features
    In coherence with the governance framework and Global Job
    Model, benefits are aligned by applying general common criteria
    for each employee category, while benefits plans are established
    on the basis of local regulations and practices.
    4.3 Benefits
    UniCredit affirms the value of share ownership as a valuable tool
    for enabling the engagement, affiliation and alignment of interests
    among shareholders, management and the overall employee
    population. The possibility is therefore considered, from time to
    time and as appropriate in light of local legal and tax requirements,
    to offer employees the opportunity to invest and participate in
    the future achievements of the group through share-based plans
    whereby employees can purchase UniCredit shares at favorable
    conditions.
    Section II
    Group Compensation Policy - 4. Compensation Structure
    Section II
    Group Compensation Policy - 4. Compensation Structure
    Gr \225 UniCredit UniCredit \225 Gr


    Annual
    Compensation
    Report
    Section III 1. Introduction
    2. Governance and
    Compliance
    2.1 Remuneration Committee
    2.2 The Role of Company Control
    Functions: Compliance, Risk
    Management and Audit
    3. Continuous Monitoring
    of Market Trends and
    Practices
    4. Compensation to Directors,
    Statutory Auditors
    and Executives with
    Strategic Responsibilities
    5. Group Compensation
    Systems
    5.1 Target Population
    5.2 2017 Incentive System implementation
    and outcomes
    5.3 2018 Group Incentive System
    5.4 Comprehensive Performance
    Management
    5.5 Group Long Term Incentive Plan
    (2017-2019 LTI Plan)
    6. Group Employee Share
    Ownership Plan
    7. Compensation Data
    7.1 2017 Remuneration Outcomes
    7.2 2018 Remuneration Policy
    7.3 2017 Benefits Data


    37
    The report provides ex post information on 2017 outcomes, as
    well as ex ante disclosure for the 2018 approach, covering both
    our Identified Staff population and corporate bodies’ members.
    Remuneration solutions implemented in 2017 provided for:
    • compliance of incentive structures with all relevant regulations,
    including deferred and equity incentives based on financial
    instruments;
    • comprehensive performance measurement to foster sound
    behaviours aligned with different types of risk.
    Over the year we constantly remained abreast of ongoing
    changes in national and international regulations, both in Italy
    and in other countries where the group operates. Among most
    recent innovations in the regulatory framework, the following
    is a highlight: on January 1, 2014 the Capital Requirements
    Directive (CRD IV) was implemented, providing a cap on variable
    remuneration for Identified Staff and requesting local regulators to
    issue regulations for local implementation; the European Banking
    Authority (“EBA”) published on December 16, 2013 the Regulatory
    Technical Standards, qualitative and quantitative criteria which are
    common at European level to define Identified Staff population.
    To introduce CRD IV requisites, Bank of Italy issued on November
    18, 2014 the final regulations which replace the “Disposizioni in
    materia di politiche e prassi di remunerazione e incentivazione
    nelle banche e nei gruppi bancari” issued in 2011. Finally it should
    be noted that on June 27, 2016 EBA published the document
    “Guidelines on sound remuneration policies” 1. Such guidelines are
    applied starting from January 1, 2017.
    In 2017 we participated in the European Banking Authority’s
    (“EBA”) remuneration benchmarking exercise and data collection of
    high earners, reporting, through Bank of Italy, information regarding
    1. Introduction
    The Annual Compensation Report discloses all relevant group compensation-related information and
    methodologies with the aim of increasing stakeholders’ awareness of our compensation policies, practices
    and outcomes, demonstrating their coherence with business strategy and performance, responsible
    remuneration and sound risk management.
    remuneration for 2016 of all staff and Identified Staff, including the
    number of individuals in pay brackets of at least € 1 million.
    In 2017 and in the first months of 2018 we continued our annual
    structured dialogue with international investors and proxy advisors,
    receiving valuable feedback on our compensation approach
    and specific inputs for an effective compensation disclosure,
    considering Italian specifics and international standards.
    Furthermore, in December 2016, the CEO
    Jean Pierre Mustier explained the review of the
    compensation framework and his personal undertakings in
    connection with the 2016-2019 Strategic Plan Transform
    2019 (for details see Focus “2016-2019 Strategic Plan
    Transform 2019 ”).
    On December 12, 2017, an update on the execution of the
    2016-2019 Strategic Plan Transform 2019 was presented
    to analysts and investors at a Capital Markets Day in
    London. Transform 2019 is fully on track, 2019 targets
    have been confirmed with an improved risk profile.
    The Annual Report, a document providing complete and
    comprehensive information on compensation, includes also
    this year details referring to Members of Administrative and
    Auditing bodies, General Managers and Executives with strategic
    responsibilities. In particular, data pursuant sect. 84-quarter
    Consob Issuers Regulation Nr. 11971, Compensation report-Section
    II, as well as the information on incentive systems under 114-bis 2
    are included in the attachments to the 2018 Group Compensation
    Policy, published on UniCredit website, in the section dedicated to
    the Shareholders’ Meeting.
    1. Guidelines on sound remuneration policies under Ar ticle 74(3) and 75(2) of Direc tive 2013/36/EU and disclosures under Ar ticle 450 of Regulation (EU) No 575/2013.2. Legislative decree no. 58 of Februar y 24, 1998 as well as to the provisions of the issuer “Regulations” adopted by CONSOB with resolution no. 11971 of May 14, 1999 regarding the information to be disclosed to the market in relation to the granting of awarding plans based on financial instruments.
    Section III
    Annual Compensation Report - 1. Introduction
    UniCredit ? Group Compensation Policy 2018


    38 39
    2016-2019 Strategic Plan Tra nsfo rm 2 019
    On December 12, 2016, the Board of Directors of UniCredit S.p.A. approved the 2016-2019 Strategic Plan, Transform 2019 , which, on the
    day after, was presented to analysts and investors.
    The strategic review, launched in July 2016 and led by the new CEO Jean Pierre Mustier, encompassed all major areas of the Bank with
    specific focus on how to reinforce and optimize the group’s capital position, reduce balance sheet risk profile, improve profitability, ensure
    continuous transformation of operations to allow additional cost reduction and cross selling across group entities, whilst maintaining
    flexibility to seize value creating opportunities, as well as further improved risk discipline.
    The Transform 2019 Plan targets rest on five well-defined strategic pillars:
    • Strengthen and optimize capital, to align capital ratios with the best in class G-SIFIs.
    • Improve the asset quality, decisive actions to address the Italian legacies via a proactive balance sheet de-risking, an increase of the
    NPE coverage, and by tightening risk management policies to further improve the quality of new loans origination.
    • Transform the operating model, increase client focus whilst simplifying and streamlining products and services to reduce the cost to
    serve customers.
    • Maximize commercial bank value, capitalize on Retail client relationship potential and the “go to” bank status for Corporate clients in
    Western Europe, further strengthen the leadership position in Central and Eastern Europe and enhance cross selling across business lines
    and countries.
    • Adopt a lean but strong steering group Corporate Center, consistent group-wide KPIs to drive performance, ensure accountability,
    leaner support functions and transparent cost allocation.
    On December 12, 2017, an update on the execution of the 2016-2019 Strategic Plan Transform 2019 was presented to analysts
    and investors at a Capital Markets Day in London.
    The implementation of Transform 2019 is fully on track, delivering tangible results supporting the successful execution of the five pillars of
    the Plan.
    One Bank, One UniCredit: a simple successful Pan European Commercial Bank, with a fully plugged in CIB, delivering a unique
    Western, Central and Eastern European network to its extensive client fr\
    anchise.
    Tr ansform 2019 fully on track yielding tangible results underpinned by gro\
    up – wide business momentum .
    The key targets of the Plan are confirmed with an improved risk profile:
    Our compensation framework, introduced in 2016 in parallel with the Strategic Plan launch, supports, in line with regulatory
    prescriptions, the achievement of the targets set by the Plan, aligning senior management interests to those of shareholders, both
    in the long term view and in the day to day execution.
    The key elements of UniCredit’s compensation framework are the followings:
    • the compensation policy target related to fixed remuneration is set on the market median as reference for the Identified Staff;
    • the senior management long term incentives structure is aligned to group long term value creation, through the LTI Plan. The bonus
    pool approach is adopted for the annual incentive. Furthermore, variable remuneration is tightly linked with the Transform 2019 ‘s key
    performing indicators;
    • share ownership guidelines are extended to the top ~120 group senior managers, to align individual portfolios with investors’ interests;
    • the new Termination Policy, approved in 2017, envisages severance limits reduced to 24 months (including notice period) in order to
    balance investors’ expectations and the labor market’s legal and contractual standards.
    Moreover, effective January 1, 2017, as per the request by the CEO Jean Pierre Mustier to the Board of Directors, to set the right tone from
    the top, as well as to fully align his interests with all stakeholders, specific conditions are applied to his remuneration:
    • 40% reduction of fixed remuneration up to € 1.2 million;
    • no annual bonus. Until 2019 variable remuneration is covered by the LTI Plan based on Strategic Plan targets;
    • zero severance arrangement in case of separation from the bank.
    On March 14, 2017, the CEO executed a personal investment in UniCredit shares equal to € 2 m, together with additional purchase of
    UniCredit bonds equal to € 2 m-nominal value.
    As of January 1, 2017, the remuneration of the Chairman of the Board of Directors, Mr. Giuseppe Vita was reduced by 40%, as the Chairman
    himself asked of the Board of Directors on January 10, 2017 in line with the announcement made by the CEO Jean Pierre Mustier.
    Details
    For more information on the in-depth review of our compensation policies, please refer to the paragraph “2016-2019 Strategic Plan
    Transform 2019” reported in the 2017 Group Compensation Policy (Section III Annual Compensation Report, Chapter 1, Introduction)
    approved by the 2017 Shareholding’s Meeting (www.unicreditgroup.eu > Governance > Shareholders meeting > Archive > 2017 >
    20 April 2017 Ordinary and Extraordinary Shareholders’ Meeting)
    2019 key target confirmed, RoTE target >9%
    2019 fully loaded CET1 ratio confirmed >12.5%
    FY19 dividend A payout increased from 20% to 30%
    Post 2019 dividend payout to increase from 30% up to 50%
    once upcoming regulatory impacts are confirmed
    Self-funded full rundown of Non Core by 2025
    A. To be paid in 2020
    Section III
    Annual Compensation Report - 1. Introduction
    Section III
    Annual Compensation Report - 1. Introduction
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    40 41
    Role and composition of the Remuneration
    Committee
    The Remuneration Committee performs a fundamental role in
    supporting the Board for the oversight of Group Compensation
    Policy and for the design of incentive plans. As established in
    the Corporate Bodies Regulations, the Remuneration Committee
    consists of 5 non-executive members, the majority of whom are
    independent in accordance with the Articles of Association and
    the Corporate Governance Code for listed Companies (“Corporate
    Governance Code”). The Chairman of the Board of Directors is a
    member of the Committee by right. The activities are coordinated
    by the Chairman, chosen among independent members.
    The Remuneration Committee is currently composed of
    independent members: Mr. Alessandro Caltagirone
    (Chairman), Mrs. Henryka Bochniarz and Mr. Alexander Wolfgring
    and of non-executive members Mr. Giuseppe Vita and Mr.
    Anthony Wyand.
    All members of the Committee in its current composition
    are independent according to the article 148, paragraph 3 of
    the Decreto Legislativo n.58/98 (‘Testo Unico della Finanza’
    ‘TUF’) and the majority of the members (3 out of 5) meet the
    requirements of independence described in the Corporate
    Governance Code, which coincide with the ones given in the
    Articles of Association.
    All members meet the requirements of professionalism, in
    accordance with current normative and regulatory dispositions.
    Some members have specific technical know-how on the matters
    overseen by the Committee, some in particular have developed
    experience in the accounting and finance areas.
    The connection with risk issues is ensured by the presence, in
    the Remuneration Committee, of three members of the Internal
    Controls & Risk Committee, including the current Chairman and
    the previous Chairman of the same Committee.
    The Chairman of the Board of Directors is a member of all
    Board Committees foreseen by the Corporate Governance Code,
    including the Remuneration Committee. This choice allows
    the Chairman to carry out his role of promoting the effective
    functioning of the corporate governance system, acting as
    reference of the internal committees of the Board. Furthermore,
    the presence of the Chairman of the Board of Directors in
    the Board committees has been evaluated as a sign of sound
    governance, given that it guarantees that the Chairman is
    informed in a timely and proper manner on all topics submitted
    to the Board of Directors.
    2. Governance and Compliance
    It is also noted that the Chairman of the Board of Directors has
    a role of strategic representation within the group and towards
    the Regulator as well, with constant and full-time commitment.
    He does not hold an executive role and has not received any
    operational delegation of power. His remuneration is set in line
    with the complexity of the role, reflects the dimensions and
    the scope of the group and is in line with legal and regulatory
    provisions.
    In the context of UniCredit’s governance review launched in
    2016 with the objective to align the Bank’s governance with
    international best practices, the Company may review the
    composition of the Remuneration Committee.
    As recalled by the Board of Directors 3, specialist Committees
    must consist of 3-5 members, all non-executives and mostly
    independent, in line with the Supervisory Regulations on bank’s
    corporate governance, issued by Bank of Italy.
    It should be noted that the above mentioned international best
    practices have Remuneration Committees that tend to be smaller
    and are composed only by independent members.
    In the table at the end of the paragraph, details on the
    independence of the members of the Committee are provided, in
    accordance with the Corporate Governance Code and the Articles
    of Association, as well as with the art. 148, par. 3, of the ‘Decreto
    Legislativo n.58/98’ ‘TUF’).
    The main topics discussed by the Committee are also submitted
    to the attention of the Board of Statutory Auditors, in advance
    over their submission to the Board of Directors. The meetings
    of the Committee may be attended by the members of the
    Statutory Auditors.
    In 2017 the members of the group’s senior management team,
    and among them - as per Bank of Italy request - the Heads of
    the Group Risk Management (Chief Risk Officer) and Internal
    Audit functions, attended Committee meetings with regard to
    specific issues reported in the table related to the activities of the
    Committee in 2017. Moreover, the Head of Group Human Capital
    always attended all the meetings as a guest.
    The Remuneration Committee had access to all the information
    and corporate functions as required for performing its duties, and
    for this purpose relies on the support of the corporate head office
    structures.
    2.1 Remuneration Committee
    3. “Qualitative and quantitative composition of the UniCredit S.p.A. Board of Direc tors”, Februar y 2018, published on the Corporate Website.
    In 2017 the Remuneration Committee has availed itself with the
    services of PricewaterhouseCoopers (PwC), external independent
    advisor, who provides advice on compensation practices and
    trends, as well as up-to-date remuneration benchmarking studies.
    It has been evaluated in advance that such an advisor is not in
    any position which might impair its independence.
    PwC has collaborated with the Committee since the end of 2015.
    The representatives of these advisors were regularly invited to
    attend meetings to discuss specific items on the Committee’s
    agenda.
    During the year, the spending requirements of the Committee are
    met by a specific budget, which may be supplemented to meet
    specific needs. In particular in 2017, by means of this budget,
    the Remuneration Committee was able to get the advice of
    independent advisors to gather the updated information needed
    for the decisional processes.
    The following table summarizes the composition of the
    Committee in 2017 and, in addition to the information on the
    independence of the members, provides details regarding their
    attendance to the meetings that have been called during the
    year.
    Further details are reported in the Corporate Governance Report
    published on the UniCredit website.
    Remuneration committee (year 01/01/2017 - 31/12/2017)
    A. Chairman of the Remuneration Committee since May 13, 2015.
    B. Chairman of the Remuneration Committee until May 12, 2015.
    C. Office held since May 13, 2015.
    Indipendency
    according
    to CodeNon-executive
    87,5%
    100%
    100%
    100%
    100%
    7
    A
    B
    C
    8
    8
    8
    8
    Office covered
    C= Chairman
    M= Member
    Nr. of
    meetings
    attended% of
    participation
    Caltagirone Alessandro
    Chairman
    Vita Giuseppe
    Chairman of the BoD
    Bochniarz Henryka
    Director
    Wolfgring Alexander
    Director
    Wyand Anthony
    Director M
    M
    M
    MM
    C
    Section III
    Annual Compensation Report - 2. Governance and Compliance
    Section III
    Annual Compensation Report - 2. Governance and Compliance
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    42 43
    CRO
    CRO
    CFO
    BoD
    BoD
    BoD BoD
    BoD
    AGM
    AGM BoD
    BoD BoD
    BoD
    BoD AGM
    AGM AUDIT
    CRO
    Strategy, Policy
    and Governance
    Benchmarks provided by the
    external independent advisor
    Risk and
    regulations
    CRO CFO AGM AUDIT Submitted to the AGM BoD Submitted to the BoD Participation of other group functions
    January
    Topics
    Group Short Term
    Incentive System • 2017 Group
    Incentive System
    • 2017-2019 LTI Plan
    • First discussion on
    2016 Bonus pool
    distribution • Second discussion
    on 2016 Bonus pool
    distribution
    • 2017 group
    Identified Staff –
    assessment
    methodology and
    outcomes• Bonus 2016 final
    payout and 2017
    salary review
    • Report on 2016
    severance payments • Emerging trends in
    market compensation
    practices
    • How Long Term
    Incentive Plans can
    help Corporate
    Performance: External
    Advisor Point of View
    • Report on defined
    severance payments for
    Senior Executive Vice
    Presidents
    • Report on defined
    severance payments for
    Senior Executive Vice
    Presidents• 2018 Goal Setting
    for CEO, GM and
    Heads of Control
    Functions
    • Competitive
    assessment of the
    total compensation
    package for the Top
    Management
    • Application of AIAF
    adjustment factor (“K
    factor”) on share
    based incentive
    systems • Goal setting and
    compensation for
    "Dirigente preposto" • Compensation
    packages for CEO, GM
    and Heads of Control
    Functions
    • Discussion on 2017
    Bonus pool distribution
    • 2017 Group
    Compensation Policy
    • Group Termination
    Payments Policy
    • Follow-up on 2017
    Annual General
    Meeting• CRO Dashboard
    Methodology
    • Local adaptations to
    the Group
    compensation policies
    and to incentive plans
    rules in execution of
    local regulatory
    requirements,
    authority requests or
    managerial decisions
    • Information on the
    2016 appraisal of
    Heads of Control
    Functions
    • Information on
    deferral payments for
    Top Management
    Austria
    • 2016 Group Incentive
    System - distribution of
    max bonus pool for
    each segment
    • Capital increase
    approval for previous
    incentive plans
    • 2016 Group Incentive
    System-evaluation &
    payout for CEO, GM
    and Heads of Control
    Functions
    • Execution of previous
    year plans for CEO, GM
    and Heads of Control
    Functions • 2017-2019 LTI Plan
    - Individual Allocation
    Long Term Incentive Plan
    AGM Follow up
    Local adaptations Group Policies
    - new/update
    February MarchAprilMayOctober
    (2 meetings) December
    Annual compensation
    decisions
    Identification of group
    Identified Staff (MRTs)
    Compensation for
    Executives
    Goal setting
    Severance payments
    Market trends
    Compensation for the
    Top Management
    Other
    Annual Compensation
    review and decisions
    Activities of the Committee 2017
    In 2017 the Remuneration Committee met 8 times. The meetings
    had an average duration of about one hour. From January 2018 to
    March 2018, 3 meetings of the Committee have been held and for
    2018 it is expected that the Committee will meet 7 times.
    Each meeting of the Remuneration Committee is placed on record by
    the Secretary designated by Committee itself. During 2017 the key
    activities of the Remuneration Committee included:
    FOCUS
    Within the scope of its responsibilities, the Remuneration
    Committee:
    • formulates proposals to the Board on remuneration of members
    of the Board of Directors, the General Manager, Deputy General
    Managers, the Heads of Company Control Functions and the
    personnel whose remuneration and incentive systems are
    decided upon by the Board;
    • with regard to the CEO’s earnings, serves in an advisory capacity
    in terms of setting the performance targets associated with the
    variable portion of the CEO’s remuneration;
    • acts in an advisory capacity on setting criteria for remunerating
    the most significant employees, as identified pursuant to
    applicable Bank of Italy provisions;
    • issues opinions to the Board of Directors on the remuneration
    policy for Senior Executive Vice Presidents, the Executive Vice
    Presidents and the Senior Vice Presidents;
    • issues opinions to the Board of Directors on the group incentive
    schemes based on financial instruments proposed by the Board;
    • issues opinions to the Board of Directors on the remuneration
    policy for corporate officers (members of Boards of Directors,
    Boards of Statutory Auditors and Supervisory Boards) at group
    companies;
    • directly supervises the correct application of rules regarding the
    remuneration of the Heads of internal control functions, working
    closely with the Board of Statutory Auditors;
    • works with the other committees, particularly the Internal
    Controls & Risks Committee in relation to the tasks assigned
    to the same with regard to the verification that the incentive
    contained in the compensation and incentive schemes are
    consistent to the Risk Appetite Framework (RAF), ensuring the
    involvement of the corporate functions responsible for drawing
    up and controlling remuneration and incentive policies and
    practices;
    • provides appropriate feedback on its operations to the Board
    of Directors, Board of Statutory Auditors and the Shareholders’
    Meeting;
    • where necessary drawing on information received from relevant
    corporate functions, expresses an opinion on the achievement of
    the performance targets associated with incentive schemes, and
    on the checking of the other conditions set for bonus payments;
    No member of the Committee takes part in the meetings during
    which his/her own remuneration is proposed to the Board of
    Directors.
    Section III
    Annual Compensation Report - 2. Governance and Compliance
    Section III
    Annual Compensation Report - 2. Governance and Compliance
    Group Compensation Policy 2018 • UniCredit UniCredit • Group Compensation Policy 2018


    45 44
    Internal Audit report on the 2017
    Remuneration policies and practices
    Group Internal Audit Department performed the annual audit on
    the group remuneration policies and practices, requested by Bank
    of Italy 4, aimed at verifying the design and implementation of the
    remuneration process, as well as its compliance with relevant
    regulatory requirements and group internal rules.
    The Internal Audit satisfactory evaluation was based on the
    overall correct application of the Group Incentive System,
    including execution of decisions taken by UniCredit Remuneration
    Committee and Board of Directors.
    Main positive aspects of the process governance were the roll-out
    of group policies to relevant Legal Entities, an IT tool ensuring data
    access and traceability, as well as controls performed by relevant
    functions.
    Internal Audit verified also the substantial adequacy of group
    Identified Staff (Material Risk Takers) identification, bonus pool
    calculation and distribution, procedures to respect the caps of the
    ratio between variable and fixed components of remuneration,
    as well as payment and deferral phase of previous year incentive
    system.
    Severances paid in 2017 resulted in line with the Termination
    Payments Group Policy and severance guidelines.
    Management implemented corrective actions planned for solving
    issues deriving from previous audit.
    Main audit results were presented to the Remuneration Committee
    on March 5, 2018.
    Group Compliance function’s key contributions in 2017 included:
    • evaluation of the 2017 Group Compensation Policy submitted
    to the Board of Directors for subsequent approval at the Annual
    General Meeting on April 20, 2017;
    • evaluation of the 2017 Group Incentive System for Identified
    Staff;
    • preparation - in collaboration with Human Resources function
    - and distribution of group guidelines for the development and
    management of 2017 incentive systems for below Executive
    population;
    • participation in specific initiatives of Human Resources function
    (e.g.: review of KPI Bluebook; review of definition of Identified
    Staff for the application of Group Incentive System);
    • analysis of specific non-standard compensation within the 2017
    cycle.
    In 2018, the Compliance function will continue to operate in close
    co-ordination with the Human Resources function to support in the
    validation and in the design and definition of compensation policy
    and processes and perform the validation for profiles in scope.
    The link between compensation and risk has been maintained
    also in 2017 with the involvement of the Group Risk Management
    function in compensation design and the definition of an explicit
    framework to base remuneration within an overarching Group
    Risk Appetite Framework, so that incentives to take risk are
    appropriately constrained by incentives to manage risk.
    In particular, the Board of Directors and Remuneration Committee
    draw upon the input of involved functions to define the link
    between profitability, risk and reward within group incentive
    systems.
    2.2 The Role of Company Control Functions: Compliance,
    Risk Management and Internal Audit
    4. Circular n. 285 Dec 17, 2013, 7th update of November 18, 2014
    3. Continuous Monitoring of
    Market Trends and Practices
    • the recommendations on remuneration based on specific
    benchmarking analysis versus our defined peer group to inform
    any decision.
    • the analysis on emerging trends in market compensation
    practices.
    The peer group is subject to annual review to assure its continuing
    relevance.
    Key highlights of total compensation policy, defined this year with the support of continuing external
    benchmarking and trends analysis provided by the independent external advisor to the Remuneration
    Committee, include:
    In 2017, the European peer group was confirmed, defined on
    grounds of similarity (additional to the market capitalization) in
    terms of: dimensions, complexity and business model, reference
    markets with respect to clients, talents and capitals, risk profile
    and legal, social and economic framework.
    Dimensions
    Risk profile Reference markets
    with respect to clients, talents and capitals Complexity and
    business model
    Legal, social and
    economic
    framework
    Banco Santander
    Banque Populaire CE
    Barclays
    Banco Bilbao Vizcaya Argentaria
    BNP Paribas
    Commerzbank
    Credit Agricole
    Deutsche Bank
    ING
    Intesa Sanpaolo
    Nordea Bank
    Royal Bank of Scotland
    Société Générale
    UBS
    2017 UniCredit peer group
    Section III
    Annual Compensation Report - 3. Continuous Monitoring
    of Market Trends and Practices
    UniCredit ? Group Compensation Policy 2018
    Section III
    Annual Compensation Report - 2. Governance and Compliance
    Group Compensation Policy 2018 ? UniCredit


    46 47
    In the context of the Strategic Plan Transform 2019 , the group
    has taken decisive actions to strengthen its corporate governance
    and align it to international best practices. In particular, during the
    Extraordinary General Meeting held on 4 December, resolutions
    have been adopted to:
    • empower the Board of Directors to present its own list of
    candidates for the renewal of the Board for the period 2018 to
    2021;
    • allow for one additional appointment from the minority list, in the
    context of the recommendation for Shareholders disclosed by the
    Board of Directors in December 2016, to reduce the number of
    Board members from 17 to 15;
    • remove the 5 per cent voting rights limits, subject to a stop loss
    condition related to the amount of withdrawal rights exercised by
    the shareholders;
    • simplify the equity base by converting saving shares into ordinary
    shares.
    Moreover, on November 8, 2017, the Board of Directors unanimously
    elected to co-opt Mr. Fabrizio Saccomanni as a non-executive
    Director with a mandate until the Annual General Meeting of 2018
    to approve the 2017 financial statements, at which time Mr. Fabrizio
    Saccomanni and the full board will stand for election.
    Mr. Fabrizio Saccomanni was chosen by the Board of Directors
    based on the “Process for selecting candidates for the post of Chief
    Executive Officer, Chairman and Board member” that was approved
    by the Board itself on July 6, 2017 and published on the Company’s
    website.
    Considering Mr. Fabrizio Saccomanni’s professional background
    and status, the Board of Directors has concluded that he is the best
    candidate for the position as Chairman of UniCredit for the next
    term (2018-2021).
    4. Compensation to Directors,
    Statutory Auditors and
    Executives with Strategic
    Responsibilities
    The remuneration for members of the administrative and auditing bodies of UniCredit is represented only
    by a fixed component, determined on the basis of the importance of the position and the time required for
    the performance of the tasks assigned. This policy applies to non-executive Directors as well as Statutory
    Auditors. The compensation paid to non-executive Directors and Statutory Auditors is not linked to the
    economic results achieved by UniCredit and they do not take part in any incentive plans based on stock
    options or, generally, based on financial instruments.
    Mr. Fabrizio Saccomanni took an active role in defining the list of
    potential members of the future UniCredit board, which has been
    put forward by the current Board of Directors for election at the
    Annual General Meeting in 2018.
    On the basis of the decision taken by the Board of Directors,
    on September 21, 2017 UniCredit announced a change in the
    organisational structure of the group’s risk management and
    lending activities, to further strengthen the effectiveness of risk
    controls, improving the focus of the risk organisation and enforcing
    the independence of control vis-a-vis the operating businesses.
    In line with the evolving regulatory requirements and to create
    a best in class risk organisation, UniCredit has separated the risk
    management functions and the credit related operational functions.
    The new organisational structure, which became effective from
    October 1, 2017, splits the Group Risk Management activities
    into two organizational areas; Group Risk Management (GRM)
    and Group Lending Office (GLO), which have specific and separate
    responsibilities.
    In line with the application of all statutory and regulatory
    instructions, on the basis of the revised organizational structure,
    the Board of Directors identified the following roles as Executives
    with strategic responsibilities: Group Chief Executive Officer, Group
    General Manager, Group Chief Risk Officer, Chief Lending Officer,
    Head of Group Human Capital, Group Compliance Officer, Head of
    Group Legal, Co-Chief Operating Officers and Head of Internal Audit.
    BeneficiaryRemuneration
    component Approved by Amount Remarks
    Non- Executive
    DirectorsOnly fixed
    compensation
    Shareholders' Meeting
    May 13, 2015
    Board of Directors of July
    9, 2015, pursuant to sect.
    2389 of the Civil Code
    par. 3 and Articles of
    Association, heard the
    opinion of Statutory
    Auditors • € 2,675,000 of which
    € 1,110,000 for the
    participation to Board
    Committees
    • € 400 attendance fee for participating to each
    meeting
    A :
    - Board of Directors
    - Board Committees
    - other Bank Internal
    Bodies
    • € 2,158,000 for each year of activity, split between:
    - Board Chairman
    - Board Vice Chairmen
    - Chief Executive Officer
    (executive) The compensation is
    determined on the basis
    of the importance of the
    position and the time
    required for the
    performance of the tasks
    assigned.
    The remuneration is not
    linked to the economic
    results achieved by
    UniCredit, non-executive
    directors and statutory
    auditors do not take part
    in any incentive plans
    based on stock options or,
    generally, based on
    financial instruments
    Executives with
    strategic
    responsibilities
    Fixed and variable
    compensation
    Board of Directors
    2017 compensation level:
    • for the CEO: € 1,200,000
    fixed
    C
    • for the General Manager:€ 1,200,000 fixed
    • for the other 8 Executives with strategic
    responsibilities:
    € 5,208,695 fixed,
    € 2,761,500 variable For 2017, the maximum
    ratio between variable and
    fixed compensation is:
    • 200% for the CEO, the GM
    and for the Executives with
    strategic responsibilities,
    responsible for business
    lines
    • 33% for the Executives with strategic
    responsibilities, responsible
    for Company Control
    Functions
    • 100% for the other Executives with strategic
    responsibilities
    Statutory
    Auditors Only fixed
    compensation
    Shareholders' Meeting
    April 14, 2016 Compensation for each year
    of activity B:
    • for the Chairman of Board of Statutory Auditors:
    € 140,000
    • for each Standing Auditor: € 100,000
    € 400 attendance fee for
    participating to each
    meeting of the Statutory
    Auditors, of the BoD and of
    the Board Committees
    A. Even if these meetings are held in the same day.
    B. Alternate Auditors do not receive any compensation.
    C. Including the compensation paid for the director relationship.
    Starting from January 1, 2017, the remuneration for the Chairman of the Board of Directors, for the Deputy Chairmen and for the Chief Executive Officer was reduced by 40%.
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    48 49
    › Further details on Executives with strategic
    responsibilities
    For 2017, according to Group Compensation Policy, in line with
    regulatory provisions, the maximum ratio between variable and fixed
    compensation has been defined ex ante for the Group CEO (the sole
    executive director sitting on the Board of Directors and employee of
    the Company) and the other Executives with strategic responsibilities.
    The balance between variable and fixed components has been defined
    considering also the company’s strategic goals, risk management
    policies and other elements influencing the business of the company.
    With reference to the table at the previous page, for Executives with
    strategic responsibilities it is specified that:
    • the fixed component is defined taking into consideration market
    information and in such a way to be sufficient to reward the activity
    rendered even if the variable part of the remuneration package were
    not paid due to non-achievement of performance goals;
    • in line with the latest regulatory requirements, the Chief Executive
    Officer as well as the other Executives with strategic responsibilities
    have a balanced part of their remuneration linked to the economic
    results of UniCredit, taking into consideration the overall profitability,
    weighted by risk and cost of capital, as well as sustainability goals
    (based on capital and liquidity ratios).
    On this point, with reference to the variable component and the weight
    of short-term and long-term components, the last one represented by
    the 2017-2019 LTI Plan tied to the Strategic Plan Transform 2019 , the
    compensation pay-mix for Executives with strategic responsibilities
    revised in 2017, is confirmed also for 2018.
    In particular, for the CEO and the General Manager the variable
    remuneration is entirely covered by the 2017-2019 LTI Plan, while
    for the other Executive with strategic responsibilities, the variable
    remuneration includes both a short term (annual) and a long term
    component, excluding those who belong to Company Control
    Functions who participate only in the annual system.
    Annual incentive takes into consideration the achievement of specific
    goals which were previously approved by the Board upon proposal
    of the Remuneration Committee and the opinion of the Board of
    Statutory Auditors and the Internal Controls & Risks Committee, as
    appropriate.
    In particular, metrics defined ex ante that reflect categories of our
    Group Risk Appetite Framework align Executives’ remuneration to
    sustainable performance and value creation for the shareholders in a
    medium /long term perspective.
    Such coherence is annually verified by the Internal Control &
    Risk Committee. Specific individual goals are set out taking into
    consideration the market practices and the role assigned within the
    group, through the systematic use of specific indicators aimed at
    strengthening the sustainability of business, such as the satisfaction of
    both external and internal customers, risk and financial sustainability
    indicators and capital measures.
    It is foreseen the deferral/holding of 80% of the incentive in 5 years,
    in cash and shares, with payout subject to the achievement of future
    performance conditions over the following financial years.
    All the installments are subject to the application of malus and /or
    claw-back conditions, as legally enforceable.
    The 50% of the overall incentive is paid in UniCredit shares, whose
    number is defined considering the arithmetic mean of the official
    market price of UniCredit ordinary shares during the month preceding
    the Board to which the 2017 bonuses are submitted.
    The measure and duration of the deferral are aligned with the
    provisions set by regulators and are consistent with the characteristics
    of the business and with the company’s risk profiles.
    For the Heads of the Company Control Functions, pursuant to the
    provisions of Bank of Italy, the goals are established by the Board of
    Directors in line with the tasks assigned to them and avoiding, unless
    good reasons exist, goals linked to Bank’s performance. In the decision
    making process related to Company Control Functions, the Board of
    Statutory Auditors and the Internal Controls and Risks Committee are
    also involved as far as they are respectively concerned.
    In particular, for 2017, the individual goals of the Heads of the Internal
    Audit, Compliance functions and Risk Management (CRO) are not
    connected to the Company’s performance. For the Manager in charge
    of preparing the company’s financial reports, the Board of Directors
    has verified the existence of valid reasons to insert goals linked to the
    performance results of UniCredit only in a very limited measure and
    such as not to lead to potential conflicts of interests.
    As explained above, neither the Group CEO nor the General Manager
    received an annual bonus for 2017.
    In line with group governance, 2017 assessment and payment for the
    other Executives with strategic responsibilities perimeter have been
    reviewed by the Remuneration Committee and approved by the Board
    of Directors, heard the Statutory Auditors and Internal Controls and
    Risks Committee as relevant.
    For further information on individual allocation related to the 2017
    Group Incentive System, refer to the 2017 Group Compensation Policy,
    Section III, paragraph 5.3.
    Details
    Further details regarding our
    performance management and evaluation
    are provided further in paragraph 5.4
    For the CEO, General Manager and for other Executives with strategic
    responsibilities 5, share ownership guidelines are in place, further
    details in Section II, paragraph 3.5.
    For them and for all the other Executives to whom the guidelines
    apply, share ownership levels have been verified at December 2017.
    For ~75% of the Executives the levels are already in line with the
    guidelines requirements.
    5. Considering the application, from 2016, of the new ratio between the variable and the fixed components of remuneration for Company Control Func tions (which could not exceed the limit of one third for the Identified Staf f within Italian Control Func tions, while fixed remuneration is expec ted to be the predominant component for the Control Func tions of other geographies), share ownership guidelines are not applied to Executives who are par t of Company Control Func tions.
    Details
    Further information regarding
    the 2017 incentive plans implementation
    and outcomes is provided in paragraph 5.2
    75
    25
    Fixed compensation Long Term Incentive Short Term Incentive
    2018 Theoreticalpay mix
    Max ratio between variable
    and fixed remuneration
    Chief Executive Officer and General Manager
    Business functions
    Company
    Control functions
    Others
    200 %
    200 %
    100 %33 %
    Executives with Strategic Responsabilities
    33
    67
    33
    33
    33
    50
    25
    25
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    50 51
    A. Of fice held until April 19, 2017.B. Member of the Board from November 8, 2017.C. Of fice held from December 11, 2017.D. Member of the Board until November 8, 2017.E. Of fice held until Februar y 28, 2017.* Included compensation for committee participation and attendance tokens.* * The “Fair value of equity compensation” does not represent a value ac tually paid to/gained by the beneficiaries of equity plans, being instead the cost that the Company is booking - on an accrual basis and during the vesting period - in consideration of the provision of the incentives based on financial instruments.
    Details
    For further details, refer to the document attached to the 2018 Group Compensation Policy,
    published on the UniCredit website, in the section dedicated to the Shareholders’ Meeting.
    FOCUS
    Indemnities to Directors in the event of
    resignations, dismissal or termination of
    employment following a public purchase offer (as
    per Sect. 123/bis, paragraph 1, letter i), of TUF):
    None of the Directors have contracts containing clauses envisaging
    the payment of indemnities, or the right to keep post-retirement
    benefits, in the event of resignations or dismissal/revocation
    without just cause or if the employment relationship is terminated
    following a public purchase offer. In case of early termination of the
    mandate, the ordinary law provisions would therefore apply.
    The individual employment, as Executive, of the Chief Executive
    Officer, Mr. Jean Pierre Mustier, is today governed - also with
    regards to the event of resignations, dismissal/revocation or
    termination - by the ordinary provisions of the law and National
    Labor Agreement for Banking Industry Executives dated July 13,
    2015.
    In this context, as announced during a Capital Markets Day
    held in London on December 13, 2016 for the presentation of
    the 2016-2019 Strategic Plan Transform 2019 to analysts and
    investors, the Chief Executive Officer Jean Pierre Mustier declared
    that he will renounce to any severance or notice payment, for any
    reason of separation from the bank.
    Non-executive Directors do not receive, within incentive plans,
    UniCredit subscription rights. For the Chief Executive Officer no
    specific provisions are provided with reference to the right to
    keep, in case of termination, the options possibly received and the
    eventual plans’ provisions would therefore apply.
    For Directors currently in office, provisions do not exist regarding
    the establishment of advisory contracts for a term following
    the termination of the directorship, nor the right to keep
    post retirement perks. No agreements exist either providing
    compensation for non-competition undertakings.
    F. Of fice held from Oc tober 26, 2017.G. Of fice held until May 2, 2017.H. Of fice held from May 3, 2017.I. Of fice held until Oc tober 25, 2017.L. Role covered until March 31, 2017.M. The indemnities related to the termination of the employment have been defined and paid in compliance with the applicable Severance Policy. The notice and 20% of the severance have been paid immediately af ter the termination, the remaining 80% of the severance is deferred in cash and shares, subjec t to malus e clawback, over a fur ther 5 years period.* Included compensation for committee participation and attendance tokens.* * The “Fair value of equity compensation” does not represent a value ac tually paid to/gained by the beneficiaries of equity plans, being instead the cost that the Company is booking - on an accrual basis and during the vesting period - in consideration of the provision of the incentives based on financial instruments.
    Statutory auditors
    (name and
    surname) RoleTotal fixed
    comp.* Variable
    non-equity
    compensation -
    bonuses and
    other incentives Other
    remuneration Total Fair value
    of equity
    comp.** Severance
    indemnity for end
    of office or
    termination of
    employment
    Pierpaolo Singer
    Antonella Bientesi
    F
    Angelo Rocco
    Bonissoni
    Enrico Laghi
    G
    Benedetta Navarra
    Guido Paolucci
    H
    Maria Enrica
    Spinardi I
    Chairman
    Standing auditor
    Standing auditor
    Standing auditor
    Standing auditor
    Standing auditor
    Standing auditor
    Total Statutory
    Auditors
    167,600
    23,156
    127,200
    38,624
    127,200
    84,576
    107,244
    Non
    monetary
    benefits
    Total fixed
    comp.* Variable
    non-equity
    compensation -
    bonuses and
    other incentives Other
    remuneration Total Fair value
    of equity
    comp.** Severance
    indemnity for end
    of office or
    termination of
    employment Non
    monetary
    benefits 7,250
    7,250
    7,250
    7,250
    7,250 174,850
    23,156
    134,450
    45,874
    134,450
    84,576
    114,494
    675,600 36,250711,850 Executives with strategic
    responsibilities
    (name and surname)
    Gianni Franco Papa
    (General Manager)
    Marina Natale (Head of Strategy,
    Business Development & M&A)
    L
    Other Executives with strategic responsibilities
    (Total 7,25 FTE on yearly basis) 1,200,000
    250,633
    4,691,464
    718,000340,312
    62,704
    240,394
    108,199
    403,797
    148,8741,648,511
    717,133
    5,798,732
    1,553,415
    132,004
    2,335,652
    3,271,422 M
    1,072,870 M
    Giuseppe Vita
    Vincenzo Calandra
    Buonaura
    Luca Cordero
    di Montezemolo
    Jean Pierre
    Mustier - (CEO)
    Mohamed Hamad
    Al Mehairi
    Sergio
    Balbinot
    Cesare Bisoni
    Henryka Bochniarz
    Martha
    Boeckenfeld
    Alessandro
    Caltagirone
    Lucrezia Reichlin
    Fabrizio
    Saccomanni
    B
    Clara Streit
    Paola Vezzani
    Alexander
    Wolfgring
    Anthony Wyand
    Elena Zambon
    Fabrizio Palenzona
    D
    Total Board of
    Directors Members that left off during the period
    Chairman
    Member
    Deputy Chairman DC M C
    DC
    DC
    C
    M
    M
    M
    M
    M
    M
    M
    M
    M
    M
    M
    M
    4,814,638
    4,851,185
    31,264 5,282 1,039,054
    C
    M
    M
    M
    M
    M
    M
    M
    M
    Internal
    Controls
    & Risks
    Commit-
    tee
    BoD
    C
    M
    M
    M
    M
    Remuneration
    Committee
    C
    M
    M
    M
    M
    M M
    M M
    Corporate
    Governance,
    Nomination and
    Sustainability
    Committee
    C
    M
    M
    M
    Related-
    Parties and
    Equity
    Investments
    Committee
    Members of
    Board of Directors
    (name and
    surname) Variable
    non-equity
    compensation
    bonuses and
    other
    incentives
    943,600
    281,000
    180,753 4,732
    7,250
    3,957
    952,289
    1,208,800
    96,400 96,400
    96,400 96,400
    198,800 198,800
    140,800 140,800
    97,200 97,200
    193,600 193,600
    185,600 185,600
    17,918 17,918
    186,400 186,400
    189,200 189,200
    296,400 303,650
    186,000 186,000
    140,400 140,400
    175,548 175,548
    12,032
    7,250
    1,325
    1,222,158 1,039,054
    288,250
    180,753 Fair value
    of equity
    comp.**
    Severance
    indemnity for
    end of office
    or termination
    of
    employment Total Non
    monetary
    benefits Other
    remune-
    ration Total
    fixed
    comp*
    A
    C
    MC
    DCE
    Compensation paid to Members of the administrative and auditing bodies, to General Managers and to other Executives
    with strategic responsibilities (Disclosure consistent to Consob Issuers Regulation nr. 11971)
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Section III
    Annual Compensation Report - 4. Compensation to Directors, Statutory Auditors
    and Executives with Strategic Responsibilities
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    52 53
    5. Group Compensation Systems
    Starting as early as 2010, UniCredit conducted every year, in
    alignment with specific regulation, the self-evaluation process to
    define the group’s Identified Staff population to whom, according
    to internal/external regulations, specific criteria for remuneration/
    incentive aspects are adopted.
    Starting from 2014 the assessment process for the definition of
    Identified Staff followed the criteria defined in the Regulatory
    Technical Standard of European Banking Authority (RTS). 6
    In particular, it is pointed out that the assessment process
    provides for the inclusion within the Identified Staff population
    of the employees with banding equal or higher than “Senior Vice
    President”, as defined in the Global Job Model, the classification
    system of roles adopted by group.
    For 2017, the assessment process documented into 2017
    Compensation Policy, brought to the identification of ca.1,100
    resources. Throughout the full year 2017, the list of the group
    Identified Staff has been subject to continuous update, taking into
    account the resources turnover and the banding review process.
    With regard to the 2018 process, Identified Staff population has
    been reviewed on January 2018 guaranteeing the full compliance
    with the regulatory requirements. 7
    Also for this year, the definition of Identified Staff followed a
    structured and formalized assessment process both at group and
    local level, internally inflected on the basis of specific guidelines
    provided by Group Human Capital, with the involvement of Group
    Risk Management and Group Compliance, in order to guarantee a
    common standard approach at group level.
    At process level, the control functions mentioned above have been
    appropriately involved both at local and central level for their
    respective areas of competence.
    5.1 Target Population
    6. European Banking Authority (EBA) Regulator y Technical Standards on criteria to identif y categories of staf f whose professional ac tivities have a material impac t on an institution’s risk profile under Ar ticle 94 (2) of Direc tive 2013/36/EU.7. It should be noted the last EU Decision 2015/2218 of the European Central Bank at November 20, 2015, regarding the exclusion procedure for the staf f members who may have a significant impac t on the risk profile of a super vised credit institution ( ECB/2015/38 ).
    Process to define group’s Identified Staff population
    Involvement and
    validation of the
    approach at Group
    level by group
    Compliance & Group
    Risk Management
    functions
    1
    Data
    harmonization,
    consolidation and
    overall outcome
    at group level
    3
    Overall result
    submitted to the
    Board of Directors
    4
    Local assessment
    supported by risk
    management
    functions and verified
    by compliance local
    functions
    Application of EBA
    criteria and formalized
    assessment at
    group/country/division
    level
    2
    The recognition of employees with significant impact on the
    group’s risk has taken into account the role, the decision-making
    power related to the managerial responsibility and, in addition, the
    total compensation level.
    In January 2018 the assessment process for the definition of
    Identified Staff population, evaluated by an external independent
    advisor, brought to the identification of a total number of
    approximately 1.000 resources, of which approx. 550 belonging to
    the business functions, for whom the adoption of a maximum ratio
    between variable and fixed remuneration of 2:1 can be applied. It
    has to be considered that the expected number of Identified Staff
    with variable remuneration exceeding the 1:1 ratio is less than 150
    beneficiaries.
    As a result of the analysis and as approved by the Board of
    Directors, upon Remuneration Committee proposal, the following
    categories of staff have been reconfirmed for 2018 as Identified
    Staff: Group CEO, Group Executives responsible for day-to-day
    management (General Manager, Senior Executive Vice Presidents
    and Executive Vice Presidents), executive positions in Company
    Control Functions (Audit, Risk Management, Compliance and
    Human Resources) and executive positions in Finance, as they are
    responsible at group level for strategic decisions which may have a
    relevant impact on the bank’s risk profile. Furthermore, Senior Vice
    President (SVP) population, Board Members, senior management
    and other specific roles in group’s Legal Entities have been included
    in the definition of Identified Staff, as per the current regulatory
    criteria.
    Target population represents approximately ca. 1.11% of the group
    employee population, with this outcome being in line with the
    results of 2017 process.
    Compensation data and vehicles used for the target population in
    2017 are disclosed in chapter 7 of this Report.
    Geographical distribution of Identified StaffBreakdown by business Group Identified Staffvs group FTEs 2017 B
    TOTAL NUMBER OF IDENTIFIED STAFF: ~ 1,000
    Identified Staff data refer to the population as per January 2018 providing for an ex-ante definition in line with Regulatory requirements.
    A. All absolute figures are rounded up/down to nearest tenth.
    B. Group FTEs at Dicember 31, 2017:
    ~ 91,950.
    Var/Fix Ratio ≤ 1 Var/Fix Ratio > 1
    CB ITA
    CEE
    COO
    Area CEO
    Functions
    ASSET
    GATHERING CB AUT CB GER CIB
    94%
    6% 340 (33%)
    230 (22%)
    140 (13%)
    130 (13%)
    90 (9%)
    50 (5%)
    30 (3%)
    20 (2%) 47%
    53%
    46%
    54%
    34%
    66%
    3%
    97%
    6%
    94%
    20%
    80%
    40%
    60% 0.37%
    0.24%
    0.15%
    0.14%
    0.10%
    0.06%
    0.03%
    0.02%
    Nr. of group Identified Staff per business
    (% on total group Identified Staff ) A
    Germany 35%
    Italy 35%
    Austria 5%
    Other countries 6%
    CEE 13%
    UK 6%
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    54 55
    FOCUS
    Global Job Model
    The Global Job Model is a state-of-the-art system that describes
    and evaluates all jobs within UniCredit and supports the
    management of people and processes in a global, simple and
    consistent way. It is easy to understand, based on market practice
    and aligned with our business needs.
    Global Job Model is the platform for people management,
    consisting of two key elements: global job catalogue and 9 global
    bands, the highest bands identify group senior management:
    • Group Chief Executive Officer and General Manager;
    • Senior Executive Vice Presidents (SEVP), having responsibility for
    determining the group business strategy and a strong influence
    on it. Determining or strongly influencing decisions that will
    impact on the entire organization and having direct responsibility
    for a core part of the group. As a general rule, the SEVPs are first
    reporting lines to the CEO or the General Manager;
    • Executive Vice Presidents (EVP), having significant influence on
    defining the strategy of a division /competence line/department
    or having a strong impact on the results of large/medium large
    legal entities or businesses. As a general rule, the EVPs are first
    reporting lines to the SEVPs.
    The framework described above is consistent with point (9)
    of Article 3(1) of Directive 2013/36/EU8, according to which
    “senior management” means those natural persons who exercise
    executive functions within an institution and who are responsible,
    and accountable to the management body, for the day-to-day
    management of the institution.
    2017 Group Incentive System rules application
    As a consequence of Entry Conditions positive assessment both at
    group and local level, all the 8 bonus pools are in the “fully open
    (100%)” scenario.
    2017 Group Incentive System rules have been therefore applied.
    For each segment, the theoretical bonus pool value has been calculated
    applying the funding rate percentage to the actual profitability results.
    Such theoretical values have been adjusted, based on the risk and
    sustainability assessment performed by the Group Risk Management
    (in the followings also CRO) through the dashboards. In particular, the
    evaluation of the CRO, in line with Risk Appetite Framework guidelines
    and Transform 2019 targets, resulted in a positive assessment on
    economic and risk sustainability for all pools, implying adjustments
    of theoretical values with multipliers going from min 110% to max
    120%.
    Adjusted theoretical values have been submitted to the Remuneration
    Committee review, as per relevant governance processes.
    In this context, the Remuneration Committee evaluated that the
    multipliers, deriving from the risk and sustainability assessment
    described above, were benefiting from extraordinary events occurred
    in 2017, namely the restructuring activities and the capital increase
    completion.
    The 2017 System, approved by UniCredit Board of Directors on January
    10, 2017, provides for a ‘bonus pool’ approach that directly links
    bonuses with company results at group and country/division level and
    ensure a strong connection between profitability, risk and reward.
    Such a system, implemented within the framework of our policy and
    governance, provides for the allocation of a performance related bonus
    in cash and/or free ordinary shares up to 6 years.
    Bonus pool sizing
    The bonus pools dimension for each of the 8 clusters is related to the
    actual profitability measures multiplied for the bonus pool funding
    rate defined in the budgeting phase. This calculation determines the
    so called “theoretical bonus pool” for each cluster that is adjusted
    accordingly to the actual trend of performance of the respective
    segment.
    2017 Entry Conditions at group and local level
    In order to align to regulatory requirements, specific indicators
    measuring annual profitability, solidity and liquidity results had been
    set at both local and group level as Entry Conditions. In particular,
    risk metrics and thresholds for the 2017 Group Incentive System as
    defined within the Entry Conditions - that confirms, reduces or cancels
    upfront and deferred payouts - include:
    • NOP adjusted to measure profitability, Net Operating Profit adjusted
    excluding income from buy-back of own debt and from the fair value
    accounting of own liabilities.
    5.2 2017 Incentive System implementation and outcomes
    • Net Profit to measure profitability, considering the results stated in
    the balance sheet excluding any extraordinary item as considered
    appropriate by the Board of Directors upon the Remuneration
    Committee’s proposal.
    • Common Equity Tier 1 ratio transitional that ensures to maintain
    a buffer equal to 0.25% on top of the threshold set as the outcome
    of the SREP process (Supervisory Review and Evaluation Process)
    coordinated by the European Central Bank. The level of 10% includes,
    in addition to Pillar 1 and Pillar 2 minimum, the combined buffer
    requirement applicable for 2017 and the Pillar 2 guidance. The Pillar
    2 guidance has been set additional risks under stress conditions, and
    a failure to meet this threshold does not automatically trigger actions
    by Authorities.
    • Liquidity Coverage Ratio that ensures that bank maintains an
    adequate level of unencumbered “High Quality Liquid Assets” in a
    sufficient quantity to cover the overall ‘Net Cash Outflows’, over a
    period of thirty days, under gravely stressed conditions specified by
    Supervisors.
    • Net Stable Funding Ratio that is defined as the amount of available
    stable funding relative to the amount of required stable funding and
    measures, under a long term perspective, the sustainability terms of
    maturities between asset and liabilities.
    According to the actual results, approved by the Board of Directors on
    February 7, 2018, the relevant Entry Conditions have been achieved
    both at group level and local level as reported in the picture below.
    Group CEO and
    General Manager
    Senior Executive Vice President Executive Vice PresidentSenior Vice President
    Other population
    B8
    B7
    B6
    B5
    B4
    B0
    Nr. employees Bandtitle
    2
    ~20
    ~100
    ~400
    OVERALL GROUP POPULATION
    ~ 91,950 FTEs AT DECEMBER 2017
    • NOP adjusted ≥ 0
    • Net Profit ≥ 0
    • CET 1 Ratio Transitional ≥ 10.25%
    • Liquidity Coverage Ratio > RAF (100%)
    • Net Stable Funding Ratio > RAF (100%)
    • NOP adjusted ≥ 0
    • Net Profit ≥ 0
    ENTRY CONDITIONS
    1. Group
    2. Local
    5,664 m
    5,473 m
    13.73%
    2. Country/division
    1. Group A
    ZERO FACTOR
    B
    0 - FLOOR
    C
    PARTIALLY OPEN (50%)
    D
    FULLY OPEN (100%)
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    56 57
    Based on these considerations, the Remuneration Committee
    resolved to submit to the Board of Directors’ s approval bonus
    pool amounts merely grounded on performance results, without
    incorporating any upside defined by the multipliers. In particular, the
    proposal submitted to the Board emerged in total bonus pool amount
    ~ 13% lower than the total theoretical value, mostly as a result of
    balancing per-capita bonus levels and performances within each
    country/division.
    The Board of Directors approved the bonus pool amounts as per
    Remuneration Committee proposal.
    Bonus pool distribution by segments
    The results of the above mentioned steps brought to the distribution
    of the bonus pool for the Identified Staff population (ca. 1,100
    resources in 2017), as reported below.
    For 2017, UniCredit Board of Directors took into consideration the
    Remuneration Committee’s proposals and regulatory guidelines
    regarding variable remuneration.
    The assessment related to remuneration decisions, similar to past
    years, has been supported by a strict group governance process in
    order to guarantee consistency and transparency from all parties
    involved in the decision-making process.
    The total amount of variable compensation for Identified Staff,
    detailed in paragraph 7.1, is sustainable given the bank’s financial
    position and does not limit bank’s ability to hold an adequate level of
    capital and liquidity.
    Upon the assessment of achievement level for goals defined for 2017
    and subsequent governance step in the Board of March 5, 2018 the
    allocation of ca. 3 m UniCredit ordinary shares was promised to ca.
    630 Identified Staff to be distributed in 2020, 2021, 2022 and 2023.
    The actual allocation of the last three installments is subject to the
    application of Zero Factor for 2020, 2021 and 2022 respectively.
    Therefore, the 2017 Group Incentive System would entail an expected
    impact on UniCredit share capital of approximately 0.15%, assuming
    the achievement of group performance thresholds based on Zero
    Fac tor.
    With reference to previous years Plans, the Board of Directors
    resolved to proceed with the payments of the outstanding deferrals
    due in 2018 (deferred from 2013, 2014 and 2015 Plans and from
    severance payments related to 2015 and 2016 Plans).
    Details
    For further details on the execution of the 2017 Group Incentive System and the deferrals of previous years’ Plans,
    refer to Chapter 7 and to the attachment to 2018 Group Compensation Policy, published on the UniCredit website,
    in the section dedicated to 2018 Shareholder’s Meeting.
    87134
    11%
    8%4% 7%8%
    11%
    49%
    2%AG
    CIB
    CEE
    UCB AG
    SUB CB GER CBAT CBI TA CEO&COOFunctions 2017
    2016
    152
    2015
    -12%
    Evaluation and payout for Chief Executive Officer and
    General Manager
    Neither the CEO nor the General Manager received any annual bonus
    f o r 2 0 1 7.
    As already announced in 2016 during the Strategic Plan presentation
    to analysts and investors, until 2019 their variable is entirely based
    on the 2017-2019 Long Term Incentive Plan, tied to Transform 2019
    targets.
    In line with group governance, 2017 assessment and payment for
    the other Executives with strategic responsibilities perimeter have
    been reviewed by the Remuneration Committee and approved by the
    Board of Directors, heard the Statutory Auditors and Internal Controls
    and Risks Committee as relevant.
    2017 variable and fixed compensation for Chief
    Executive Officer and General Manager
    As until 2019 no annual bonus pay out is envisaged for the CEO and
    the General Manager, their 2017 remuneration is composed by fixed
    component only.
    As per the request by the CEO Jean Pierre Mustier to the Board of
    Directors in 2016, to set the right tone from the top, as well as to fully
    align his interests with all stakeholders, specific conditions are applied
    to his remuneration effective January 1, 2017.
    In particular, his fixed remuneration was reduced by 40%. With
    reference to 2017, the Chief Executive Officer received therefore a
    total fixed remuneration of € 1.2 m, including director’s remuneration.
    The General Manager received in 2017 a total fixed remuneration of
    € 1.2 m.
    Local coordination and specific programs
    The elements of the Group Incentive System are fully applied across
    the entire Identified Staff population, with local adaptations based
    on specific regulations and /or business specifics, consistent with the
    overall Group approach.
    Being fully compliant with the principles of the incentive plans,
    local adaptations allow the achievement of the same results if the
    implementation of the group plan should have some adverse effects
    (legal, tax or other) for the group companies and/or beneficiaries
    residing in countries where the group is present.
    Implementation approach of group incentive plans for Identified
    Staff fully complies with Bank of Italy requirements and European
    guidelines, and at the same time considers:
    • local needs to adopt alternative solutions as necessary according to
    local regulators;
    • annual Audit, in each jurisdiction, on the implementation of the
    incentive systems;
    • further needs to introduce corrective measures to address local
    specificities, with focus on the reconciliation of local differences and
    home/host regulatory roles.
    In this regard, a specific authorization had been granted to the
    Chairman and the Chief Executive Officer to make appropriate
    changes for the implementation of the Plan, that do not alter
    the substance of the resolution of the Board of Directors and the
    Shareholders’ Meeting.
    The main adjustments authorized by the shareholders regarding the
    implementation of the Group System concerned the use of financial
    instruments different than the UniCredit shares, for Zagrebacka Banka
    in Croatia, and FinecoBank in Italy. These changes were implemented
    considering specific requests formulated by local regulators or by
    other relevant stakeholders.
    In addition, consistency with the exercise of the powers granted
    to the Chairman and the Chief Executive Officer, these changes
    were subsequently authorized and adjustments which primarily
    impact threshold limits for deferral and the percentage of payments
    distribution were made, these are in any case more restrictive than
    those of the group, the use of local instruments and performance
    indicators rather than those of the group, in line with specific
    recommendations received from the local Authorities.
    For the general employee population, specific systems are
    implemented, considering market local practices. Data in m. 2017 not including 2017-2019 LTI pro-rata grant (not awarded) equal to 23 m.
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    58 59
    Severance Payments-Calibrations and exceptions
    As provided by the Termination Payments Group Policy (Severance
    Policy) 8, some calibrations, submitted to the Holding by non-Italian
    group Legal Entities, were approved.
    Most of the calibrations aim at ensuring the compliance with
    regulatory requirements, laws and practices of the local markets and,
    additionally to formal amendments, were related to the:
    • exclusion from the Severance Policy field of applicability of some
    categories/typologies of payments, being not discretionarily defined
    by laws and labor contracts;
    • possibility not to apply deferral mechanisms and/or malus
    and claw-back clauses if not envisaged by local regulations or
    inconsistent with local labor laws.
    With reference to Austria, in connection to the so called “protected”
    contracts (“ Definitivum ”), which cannot be unilaterally terminated by
    the Company before retirement, as provided by the Severance Policy
    paragraph 4.1.2, the maximum limit for severance payments has
    been raised from 24 to 36 months of total compensation.
    For Germany, which is characterized by a particularly protective
    legislation with regard also to Executives 9, a calibration proposal was
    approved in compliance with paragraph 4.1.1 of the Severance Policy,
    allowing for the notice to be paid on top to the general limit of 24
    months and - in exceptional cases and with particular governance
    - to also increase the maximum number of months to 36 or 48,
    depending on the circumstances.
    In 2017, all severance payments were managed in line with the
    approved governance. Three exceptions related to Executives
    occurred and for all of them the relevant escalation process to higher
    managerial levels was activated, with prior opinion of the Compliance
    function. The exceptions were specifically related to:
    • an Austrian Executive, with “protected” contract, for whom it was
    necessary to foresee a severance payments equal to 37.6 months of
    total compensation;
    • an Executive with an old Luxembourg contract that provided for
    a severance of up to 66 months, closed with a payment of 30.8
    monthly payments;
    • an English Executive who received a severance of 6 months without
    application of deferrals, consistent with UK regulations/practices.
    For other details on severance payments defined in 2017 for
    Identified Staff refer to paragraph 7.1.
    In line with past years, the 2018 Group Incentive System, as
    approved by UniCredit Board of Directors on January 9, 2018, is
    based on a bonus pool approach which is compliant with the most
    recent national and international regulatory requirements and links
    bonuses with company results at group and country/division level,
    ensuring a strong connection between profitability, risk and reward.
    In particular, the system provides for:
    • the definition of 9 10 bonus pools for each country /division, whose
    size depends on actual profitability;
    • allocation of a variable incentive defined on the basis of the
    determined bonus pool, individual performance evaluation,
    internal benchmark for specific roles/markets and maximum
    ratio between variable and fixed compensation as approved by
    the Annual General Meeting;
    • a malus condition (Zero Factor) which applies in case specific
    thresholds of profitability, capital and liquidity are not met at
    both group and country /division level;
    • risk adjusted metrics in order to guarantee long term
    sustainability, regarding company financial position and to ensure
    compliance with regulations;
    • definition of a balanced structure of upfront (following the
    moment of performance evaluation) and deferred payments, in
    cash and/or shares;
    • distribution of share payments which take into account the
    applicable regulatory requirements regarding the application of
    share retention periods.
    5.3 2018 Group Incentive System
    Asset Gathering
    CEE
    CEO Functions Commercial Banking Austria
    Commercial Banking Germany
    Commercial Banking Italy
    2018 Bonus pool clusters
    COO Area
    CIB
    UniCredit Bank AG Subgroup
    A. Risk adjusted or Risk related
    The 2018 Incentive System is based on the following methodology:
    • 9 Pools reflecting
    the UniCredit
    Organization
    model
    • Size is based on actual operational
    profitability (no
    extraordinary
    items)
    • Risk-adjusted (e.g. Value Creation) or
    risk related metrics
    (eg. NOP) are used
    for funding
    1. Bonus pool funding
    • Access to each bonus pool linked
    to the achievement
    of capital, liquidity
    and profitability
    both at group and
    local level 2. Entry
    conditions
    • Bonus Pools cascaded down
    within each
    perimeter/division
    using
    risk-adjusted/related
    metrics, whether
    applicable 4. Cascading
    • Individual payout based on 5/8 goals
    scorecards
    • Specific guidelines rules ("KPI
    Bluebook“) defined
    involving relevant
    Functions (CRO,
    CFO, Compliance,
    Group Stakeholder
    Insight, etc.):
    - Goals both
    qualitative/
    quantitative aligned
    with the Strategic
    Plan
    - Min 1 risk
    A and
    50% sustainability
    goals required
    5. Individual allocation
    • Bonus pools revised up/downwards
    depending on the
    "quality of
    performance"
    • Risk adjustment based on yearly RAF 3. Risk/sustainability adjustement
    • Payout in cash/shares on 3/5
    year deferral
    horizon
    • Installments subject to malus &
    claw-back
    • Missing compliance mandatory training
    completion hinder
    any payment
    6. Payout
    INDIVIDUAL LEVEL BONUS POOL LEVEL
    Bonus pool definition
    10. Bonus pool struc ture has been reviewed by separating the CEO and COO func tions’ bonus pools, in order to reflec t the UniCredit Organization Model. 8. For more details please refer to the document approved by the Shareholders Meeting on April 20, 2017.9. In this contex t, Executives are the employees with global band title equal to Senior Vice President or higher. For fur ther information on the Global Job Model, refer to paragraph 5.1.
    Section III
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    60 61
    1. Bonus Pool Funding
    The bonus pools are initially proposed during the budgeting phase
    for every cluster as a percentage of their respective Funding KPI (e.g.
    Net Operating Profit). In such a definition the following elements are
    considered: business contest and perspectives, previous years amount
    and forecasts of profitability. The budget is submitted to the approval
    of UniCredit Board of Directors.
    The bonus pools set for each cluster are adjusted accordingly to the
    intra-annual trend of the respective funding KPI, with 1st, 2nd and 3rd
    quarter forecast being affected by performance trends.
    Bonus pools are based on the risk weighted results of each country/
    division, in line with overall group performance, considering the
    assessment of both group and country risk sustainability.
    2. Entry Conditions
    Specific “Entry Conditions” are set at both group and country/division
    level.
    The combined evaluation of the Entry Conditions at group and local
    level define 4 possible scenarios that allows the confirmation to
    increase, reduce or cancel the bonus pool for each cluster.
    The malus condition (Zero Factor) will apply in case the specific
    metrics on profitability, capital and liquidity are not achieved both
    at group and local level (box A of the matrix included in the scheme
    “Entry Conditions definition”). Specifically, the Zero Factor is applied to
    the Identified Staff population 11, whereas for the non-Identified Staff
    population, a significant reduction will be applied.
    In case the Entry Conditions are not met at country /division level,
    but at group level they are met (box B of the matrix included in the
    scheme “Entry Conditions definition”), a floor might be defined for
    retention purposes and in order to maintain the minimum pay levels
    needed to play in the market.
    In case Entry Conditions are not met at group Level, no bonus pay out
    is envisaged for the Group CEO and General Manager and all the Senior
    Executive Vice Presidents, irrespective of country or area of activity.
    A. NOP excluding income from buy-back of own debt and from the fair value accounting of own liabilities.B. Net Profit stated in the Balance Sheet, excluding any ex traordinar y items as considered appropriate by the Board of Direc tors upon Remuneration Commit tee proposal.C. CE T 1 Ratio transitional: ensures to maintain a buf fer equal to 0.25% on top of the threshold set as the outcome of the SREP process (Super visor y Review and Evaluation Process) coordinated by the European Central Bank. The level of 10.18% includes, in addition to Pillar 1 and Pillar 2 minimum, the combined buf fer requirement and the Pillar 2 guidance. The Pillar 2 guidance has been set by ECB taking into consideration the results of the 2016 super visor y stress test and of the 2017 sensitivity analysis of interest rate risk in the banking book. Failure to comply with the Pillar 2 guidance is not in itself a breach of own funds requirements.D. Liquidity Coverage Ratio: it aims to ensure that the bank maintains an adequate level unencumbered “High Quality Liquid Assets” in a suf ficient quantity to cover the overall ‘Net Cash Outflows’, over a period of thir ty days, under gravely stressed conditions specified by Super visors.E. Net Stable Funding Ratio: is defined as the amount of available stable funding relative to the amount of required stable funding and measures, under a long term perspec tive, the sustainability terms of maturities between asset and liabilities.C,D,E. In case of issues with capital and/or liquidity requirements at Legal Entity level, the related bonus pool size could be impac ted, even if the Entr y Conditions at group level are fully satisfied.F. For Executive & Identified Staf f population. For the other employees, a significant reduc tion will be applied. In any case, the Board of Direc tors can provide the CEO the possibility to allocate a separate and discretional pool for retention purposes only, subjec t to local relevant governance bodies’ decision, eventually including a positive feedback from ECB, if required (e.g. in a scenario of CE T1r < threshold, in a contex t of a capital contingency plan defined with ECB).G. In case Entr y Conditions are not met at group Level, no bonus pay out is envisaged for the Group CEO and General Manager and all the Senior Executive Vice Presidents, irrespec tive of countr y or area of ac tivity.* In case a division/segment, which is par t of a Legal Entity with positive net profit and adequate capital ratios, has a budget less than 0, the local Entr y Conditions would refer to this value.
    • NOP adjusted A ≥ 0
    • Net Profit B ≥ 0
    • CET1 Ratio Transitional C > 2018
    RAF "trigger" (10.43%)
    • Liquidity Coverage Ratio
    D > 2018
    RAF "limit" (101%)
    • Net Stable Funding Ratio
    E > 2018
    RAF "limit" (101%)
    1. Group
    • NOP adjusted A ≥ 0
    • Net Profit B ≥ 0
    2. Local*
    ENTRY CONDITIONS DEFINITION
    ENTRY CONDITIONS ASSESSMENT
    B
    0 - FLOOR
    A
    ZERO FACTOR F, G
    D
    FULLY OPEN (100%)
    C
    PARTIALLY OPEN (50%) G
    2. Country/division
    • In case the Entry Conditions are not met at both group
    and local levels, the malus condition is activated,
    triggering the application of Zero Factor,
    F, G on both
    current year bonus and previous years deferrals.
    • In case the Entry Conditions are not met only at country/division level, a floor might be defined for
    retention purposes and in order to maintain the
    minimum pay levels needed to play in the market.
    • In case the Entry Conditions are not met only at group level, the gate is “partially open”, with the possibility
    to payout a reduced bonus pool.
    G
    • In case the Entry Conditions are met both at group and country/division level, the gate is “fully open”,
    meaning the bonus pools may be fully confirmed.
    A
    B
    D
    C
    1. Group
    11. The bonus pool of 2018 will be zeroed (for Identified Staf f ), while deferrals of previous year systems could be reduced from 50% to 100% of their value, based on the entity of loss both at group & local level and CRO assessment based on positioning vs. R AF (nex t paragraph - Adjustments based on Sustainability and Risk).
    3. Adjustments based on sustainability and risk
    In order to ensure consistency with the Group Risk Appetite Framework
    and the economic sustainability of the group’s and country /division
    results over time, the bonus pool may be revised up /downwards, on
    the basis of the overall “quality of performance”.
    The methodology envisages the assessment performed by Group CRO
    based on specific dashboards at group and local level. In addition, the
    Group CFO will present to the Remuneration Committee a specific
    relation to provide comments on group and segments results.
    The CRO dashboards include indicators covering all relevant risks,
    such as credit, market and liquidity and the risk position assumed, the
    adherence to regulatory requirements and the relationship between
    risk and profitability. The specific metrics are measured with reference
    to the respective relevant thresholds (limit, trigger and target),
    established in line to the Group Risk Appetite Framework. By way of
    example, the standard structures of Risk dashboard are shown in the
    following picture.
    For each bonus pool cluster, the Group CRO function provides an
    overall assessment on the dashboards and the evaluation brings to
    the definition of a ‘multiplier’ in order to define the adjustment to each
    bonus pool, which could fall in the range of 50%-120%.
    The dashboards, used to evaluate the quality of performance from a
    risk perspective, are monitored on a quarterly basis.
    The Group CRO can either confirm or override the outcome. Group CRO
    may exercise the right to override taking into considerations events
    with a qualitative nature or extraordinary events which are out of
    the ordinary business of the bank (e.g. significant asset disposals in
    addition to normal distressed asset management activities, mergers
    and acquisitions or business restructuring, business dismissals, capital
    increases, sanctions, goodwill impairment).
    The application of a further discretional range up to +20% in the
    faculty of Board of Directors is foreseen with respect to the theoretical
    value, while there is no limit to a downward discretionary adjustment
    of the bonus pool.
    In particular, based on Entry Conditions achievement, in case the CRO
    assessment reports the maximum positive result and the Board of
    Directors exercises the maximum discretion, the following scenarios
    may occur:
    • if the Entry Conditions are not met only at group level, the gate
    is “partially open”, with the possibility to payout a reduced bonus
    pool with a minimum reduction of 28% 12 of the theoretical value,
    excepting for the Group CEO and General Manager and all the Senior
    Executive Vice Presidents, irrespective of country or area of activity;
    • if the Entry Conditions are met both at group and country/division
    level, the gate is “fully open”, meaning the bonus pools may be fully
    confirmed or even increased up to max 144%. 13
    CRO Dashboard
    Better than target
    Indicators covering all relevant risks set in alignment with
    Group Risk Appetite Framework
    The evaluation of Risk sustainability brings to the
    application of 5 possible multipliers for the adjustment
    of the theoretical bonus pool for each country/division
    Worse than target
    but better than
    Trigger
    Worse than limit Worse than
    Trigger but better
    than limit
    APPRAISAL
    OVERALL APPRAISAL
    AND ADJUSTMENT DIRECTION
    Up to 20% of BoD discretion (no limits to
    downward discretion)
    50% 75%100% 110% 120%
    ILLUSTRATIVE
    Dimension
    Capital
    Market Risk
    Liquidity
    Credit
    Return & Risk
    IRRBB
    Operational
    Metric
    CET1r (%)
    Leverage Ratio (%)
    LCR (%)
    NSFR (%)
    Funding GAP
    RAOC (%)
    EL Stock %
    EL New Bus. %
    Abs. NPE Exp.
    Coverage on Imp. (%)
    Max.Dom.Sov.Exp.
    Max RWA Mkt. Risk (%)
    EV sen. (%)
    ELOR (%)
    ICT Risk (%) Assessment
    1Q. 2Q. 3Q. 4Q.
    Pillar 1 KPIs
    Managerial KPIs
    Specific Risk KPIs
    12. Maximum scenario achievable in case of positive CRO assessment and using all the Board of Direc tors’ discretion to approve a bonus pool max +20% of the theoretical one (50%*120%CROdashboard+ 20%Bod discretion).13. Maximum scenario achievable in case of positive CRO assessment and using all the Board of Direc tors’ discretion to approve a bonus pool max +20% of the Theoretical one (100%*120%CROdashboard+ 20%Bod discretion).
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    62 63
    In any case, as requested by Bank of Italy regulations, the final
    evaluation of group sustainable performance parameters and the
    alignment between risk and remuneration will be assessed by the
    Remuneration Committee and defined under the governance and
    accountability of the Board of Directors.
    The Board of Directors has the possibility not to take into account,
    when deciding bonus, balance sheet extraordinary items which do not
    impact operational performance, regulatory capital and liquidity (e.g.
    goodwill impairment).
    Once the bonus pools are approved by the Board of Directors, the
    breakdown process to cascade the pools within each perimeter/
    division, where applicable according to business features (e.g. not for
    service factories), takes into account risk adjusted/related indicators
    that are assessed both on a quarterly basis and at year end. The
    year-end assessment takes into consideration the weighted average
    scoring of the single indicators.
    Moreover, following potential changes in current regulations and/or in
    relation to potential extraordinary and/or unpredictable contingencies
    which can impact the group, the company or the market in which
    it operates, the Board of Directors, having heard the opinion of the
    Remuneration Committee, maintains the right to amend the system
    and relevant rules, consistently with the overall setup approved by the
    Annual General Meeting.
    Example of bonus pool definition ILLUSTRATIVE
    • Final decision on bonus pool amount, including the possible application of an upward discretion of the
    Board (+20%) or downward (till zeroing the bonus pool)
    € 1.1 m
    Theoretical
    bonus pool
    • Bonus pool proposed in budget phase as a
    percentage of the
    funding KPI
    1. Bonus pool funding
    € 1 m
    funding KPI 10%
    funding rate
    NOP
    FUNDING
    RATIO
    • Entry Conditions achieved both at group
    and local
    country/division level
    2. Entry
    conditions
    100%
    1. Group
    2. Country/division
    B D
    A C
    0 - € 1.32 m
    Possible board discretion of +20% (No limit to
    downward discretion)
    110%
    3. Risk/Sustainab. adjustment
    • Positive evaluation on risk sustainability done
    by CRO (+)
    50% 75%100% 110% 120%
    BONUS POOL LEVEL
    A. Final decision on bonus stays not deterministic and based on available pool, on Reference Value and on guidelines on bonus payout related to per formance evaluation
    Example of 2018 Perfomance Screen
    Individual bonus allocated
    managerially considering
    also the individual actual
    perfomance and merit
    A
    BELOW EXPECTATIONS
    ALMOST MEETS
    MEETS
    EXCEEDS
    GREATLY EXCEEDS
    Example of 2018 appraisal
    Perimeter
    Group
    Group
    Group
    Group
    Group Link to our
    Five Fundamentals
    Customers First
    People Development
    Cooperation
    & Synergies
    Risk Management
    Execution& Discipline
    Target
    vs. Budget vs. Budget vs. Qualitative
    Assessment
    vs. Qualitative
    Assessment
    vs. Risk Appetite
    Framework Parameter
    Goal 2
    Goal 3
    Goal 4 Goal 1
    RISK
    ADJUSTED
    Goal 5 RISK
    ADJUSTED
    14. Our “Five Fundamentals” are the main pillars of our “One bank, One UniCredit” culture and are at the basis of the UniCredit Competency Model that describes those behaviors that are expec ted from all UniCredit people and through which all employees are assessed in per formance management processes. Our “Five Fundamentals” are: Customers First, People Development, Cooperation & Synergies, Risk Management, Execution & Discipline.
    4. Individual Allocation
    For each position of Identified Staff population a specific “Reference
    Value” is defined which considers the internal and/or external
    benchmarking analysis on similar roles, the seniority, the maximum
    ratio between variable and fixed compensation as approved by Annual
    General Meeting. Such value is adjusted according the actual available
    bonus pool and represents the starting point for the individual bonus
    allocation.
    Individual bonus will be allocated managerially, considering the
    individual performance appraisal and the above mentioned Reference
    Value.
    At individual level it will be also considered the respect of provisions
    of law, group’s compliance rules, Company policies or integrity values,
    Code of Conduct and the application of claw-back clauses, as legally
    enforceable. Moreover, each participant has to complete Compliance
    mandatory trainings courses within a pre-defined threshold in order to
    be entitled to the bonus.
    Individual performance appraisal is based on 2018 Performance
    Screen: minimum 5 individual goals (suggested maximum 8) assigned
    during the performance year, selected from our catalogue of main
    key performance indicators (KPI Bluebook) and based on our “Five
    Fundamentals.” 14 In particular, it is possible to include from 4 to 6
    goals from the catalogue and based on priorities and annual strategies
    of group /business/division (overall weight 70%, within this section
    each goal has the same weight) and from 1 to 2 goals possibly
    customized by business/division (overall weight 30%, within this
    section each goal has the same weight).
    Competencies and behaviors considered as relevant are taken into
    account by the manager for the overall performance appraisal. Further
    details are reported in paragraph 5.4.
    The goals appraisal system is based on a 1-5 rating scale with a
    descriptive outcome.
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    64 65
    Particular attention is dedicated to the level of correlation between bonus proposed and actual performance both at the bonus proposal
    step and consolidation phase:
    E - Below
    expectationsA - Greatly
    exceeds
    expectations D - Almost
    meets
    expectations B - Exceeds
    expectations
    10
    50
    Number of employees
    Performance distribution
    C - Meets
    expectations
    ILLUSTRATIVE
    Variable pay/Performance matrix
    E - Below
    expectations D - Almost
    meets
    expectationsC - Meets
    expectations
    B - Exceeds
    expectationsA - Greatly
    exceeds
    expectations Bonus vs
    Position
    Reference
    > 130%
    110% - 130%
    80% - 110%
    0% - 80%
    0%
    ILLUSTRATTIVE
    2 8
    1
    1
    PERFORMANCE RATING
    5. Payout
    As approved by the Board of Directors on January, 9, 2018, with
    reference to payout structure, the Identified Staff population will
    be differentiated into two clusters, using a combined approach of
    banding and compensation:
    • for Executive Vice President (EVPs) and High Earner (with a bonus
    ≥ 500k) a deferral scheme of 5 years is applied, consisting in a
    payout structure of 6 years in total; 15
    • for Senior Vice President (SVPs) and other Identified Staff (with a
    bonus < 500k) a deferral scheme of 3 years is applied, consisting
    in a payout structure of 5 years in total.
    The payout of incentives will be done through upfront and
    deferred installments, in cash or in UniCredit ordinary shares, up to
    a 6-year period:
    • in 2019 the first installment of the total incentive will be paid in
    cash in absence of any individual values/compliance breach; 16
    • the remaining part of the overall incentive will be paid in cash
    and/or UniCredit ordinary shares:
    • 2020-2024 for Executive Vice President (EVPs) and High
    Earner (with a bonus ≥ 500k);
    • 2020-2023 for Senior Vice President (SVPs) and other
    Identified Staff (with a bonus < 500k).
    15. Including other direc t repor ts to strategic super visor y, management and control bodies and other Identified Staf f as required by local regulation.16. Considering also the gravity of any internal/ex ternal findings (i.e. Audit, Bank of Italy, Consob and/or analogous local authorities).
    Each further tranche will be subject to the application of the Zero
    Factor for the year of reference and in absence of any individual/
    values compliance breach. 16
    Additional retention period will be applied, 2 years on upfront
    shares and 1 year for deferred shares.
    All the installments are subject to the application of claw-back
    conditions, as legally enforceable.
    The number of shares to be allocated in the respective
    installments shall be defined in 2019, on the basis of the
    arithmetic mean of the official market price of UniCredit ordinary
    shares during the month preceding the Board resolution that
    evaluates 2018 performance achievements.
    The Board of Directors could establish to assign free UniCredit
    ordinary shares that will be freely transferable at the end of the
    retention period, or in the year of the assignment, but subject to
    restrictions during the defined retention period (2 years retention
    period for upfront shares of and 1 year retention period for deferred
    shares).
    In line with national market practices, a minimum threshold will be
    introduced, below which no deferral mechanisms will be applied,
    accordingly with relevant regulatory indications.
    The maximum value of the 2018 Group Incentive System for the
    Identified Staff receiving UniCredit ordinary shares is approximately
    € 160 m, with an expected impact on UniCredit share capital of
    approximately 0.4%, assuming that all free shares for employees
    are distributed. Out of this amount, the estimated portion that
    could be awarded to business functions roles, exceeding the 1:1
    ratio between variable and fixed remuneration, is less than the
    10% of the overall estimated pool (approx. € 15 m distributed on
    less than 150 beneficiaries), with a potential impact on UniCredit
    share capital of approximately less than 0.05%, assuming that all
    free shares for employees are distributed.
    The overall dilution for all other current outstanding group
    equity-based plans, including the 2017-2019 LTI Plan, equals
    0.82%.
    The beneficiaries cannot activate programs or agreements that
    specifically protect the value of unavailable financial instruments
    assigned within the incentive plans. Any form of coverage will be
    considered a violation of compliance rules and imply the
    consequences set out in the regulations, rules and procedures.
    EVP & above &
    other Identified
    Staff with bonus ≥
    500k
    SVP & other
    Identified Staff
    with bonus <
    500k performance
    year
    performance
    year
    20%
    upfront
    cash
    30%
    upfront
    cash10%
    deferred
    cash
    10%
    deferred
    cash 20%
    upfront
    shares
    30%
    upfront
    shares10%
    deferred
    shares
    10% deferred
    shares
    10%
    deferred
    shares
    10%
    deferred
    shares 20% deferred
    cash
    10% deferred
    shares
    2018
    20192020 2021202220232024
    10% deferred
    cash
    Pay out view, including also retention period applied to upfront/deferred shares
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    66 67
    FOCUS
    Regulatory requirements
    The payment structure of 2018 incentive system has been defined
    in line with the provisions included in the “Disposizioni” of Bank of
    Italy issued on November 2014:
    • 5-year deferral period maintained only for Top Management and
    specific key senior roles. In general a deferral period from 3 to 5
    years is required, and the request for 5 years is limited to “high
    earners”, Top Management and Heads of key business lines;
    • minimum 50% of bonus to be allocated in shares or other
    financial instruments;
    • minimum 40% of bonus to be paid out under a deferral period
    (minimum 60% for specific positions and particularly high
    amounts);
    • 2 years minimum retention period for the upfront shares and
    shorter retention period (1 year) for the deferred shares.
    The Group Incentive System, described in the paragraph 5.3, is
    supported by an annual performance measurement framework
    assuring coherence, consistency and clarity of performance
    objectives with business strategy, while encouraging and rewarding
    desired behaviours and risk orientation.
    Our performance management process ensures all Identified Staff
    know what is expected of them and includes a rigorous review of
    their goals achievements.
    Starting from 2010, a specific process is performed annually with
    the involvement of key relevant functions (Human Resources,
    Finance, Risk Management, Compliance, Group Sustainability,
    Audit, Group Stakeholder Insight) to review the so-called KPI
    Bluebook.
    The KPI Bluebook serves as the performance measurement and
    evalation framework within the Group Incentive System.
    The KPI Bluebook provides specific guidelines related to:
    • the selection of goals based on annual priorities and goals
    possibly customized by business/division;
    • the indication of only measurable goals, both qualitative and
    quantitative. In case of customized goals, clear and pre-defined
    parameter for future evaluation performance shall be set and
    made transparent;
    • the use of risk-adjusted/related goals (e.g. at least one KPI -
    among those based on priorities and annual strategies of group /
    business/division - shall be marked with “Risk” flag);
    • the use of sustainability objectives ( e.g. at least half of the goals -
    among those based on priorities and annual strategies of group /
    business/division - shall be related to sustainability);
    • balanced use of economic and non-economic goals, taking into
    account the single role’s specificities;
    • the use of goals related to conduct an compliance culture (i.e.
    KPI “Tone from the Top on compliance culture” mandatory for all
    Identified Staff );
    • the selection of goals for the Company Control Functions, in order
    to ensure their independence (e.g. avoid KPIs linked to economic
    measure, use KPIs independent of results of monitored areas to
    avoid conflict of interests);
    • the selection of goals for Commercial/Network roles, set in a
    perspective of avoidance of conflicts of interest with customers.
    The KPI Bluebook includes certified KPIs (KPI Dashboard):
    5.4 Comprehensive Performance Management
    Main core
    drivers
    categories Examples of KPIs for each
    category
    Value creation • ROAC ( Return On Allocated Capital)
    • RACE ( Risk Adjusted Capital Efficiency)
    • Revenues on new business
    • EVA
    • …
    Risk and capital
    governance • CET1 ratio fully loaded
    • New business EL %
    • Performing Stock EL %
    • Gross NPE
    • …
    Clients • Net New Clients
    • Churn rate
    • Internal Service Quality (ISQ)
    • Reputation Index
    • External Customer Satisfaction index
    • Satisfaction index
    • …
    Industrial levers • Operating costs
    • Cross- selling excellence (CSE)
    • …
    ... • Sustainability Governance/Culture
    • Audit effectiveness
    • …
    Human capital • Talent Management and Succession Planning
    • Sustain Value Through People (e.g. gender/pay for performance indexes)
    • …
    Compliance
    culture • Tone from the top on compliance culture
    • Regulatory requirements and policy implementation
    • …
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    The different categories represent economic and non economic
    goals and are mapped into clusters of business, as shown in the
    picture below, to help identifying the most relevant standardized
    KPIs (all certified by relevant functions) for each business, with
    specific focus on risk-adjusted, sustainability-driven metrics and
    economic measures.
    Sustainability KPIs (see next page) are the goals that meet
    current needs without compromising the ability of the Company
    to generate profit in the future and which have an impact on the
    creation of medium /long-term value for one or more stakeholders.
    KPI Bluebook business clusters
    ASSET
    GATHERING
    COMMERCIAL
    BANKING ITALY CIB
    CEEGROUP/
    CEO FUNCTIONS
    COO AREA GERMANYAUSTRIA
    › Stakeholder Value and KPI
    The KPI Bluebook includes also sustainability indicators aiming
    at measuring client satisfaction, employees’ engagement level,
    and Succession Planning Index (further details are included in the
    Integrated Report published on UniCredit website).
    A. Since 2017.
    B. Under definition in 2018.
    Customer first benchmarking

    Definition: analysis of
    competitive positioning of
    UniCredit on the topic of
    strategic KPIs, such as reputation
    and customer satisfaction.
    Assessing the level of service
    provided, as well as image, both
    by Customers and Prospects

    Listening Methodology: the
    assessment is conducted on the
    main countries where the group
    operates, through an
    investigation that involves both
    Individual and Corporate
    segments. Respondents are
    customers of the banks of
    UniCredit and of the local
    competitors

    Used indexes: Customer First
    Index A, as a combination of
    satisfaction and preference.
    Additional supporting behaviors
    will be measured, such as
    recommendation, share of
    wallet, propensity to buy,
    attrition risk, etc.

    Supplier: Kantar TNS •
    Definition: analysis of
    satisfaction perceived by the
    Internal Customer, evaluating the
    Department which is providing
    the service. Purpose is to
    simplify the process and improve
    its effectiveness. In addition,
    specific employee experiences
    may be measured, evaluated by
    the employee quickly after the
    experience took place
    • Listening Methodology: the assessment is conducted on the
    major group perimeters, through
    a periodic web survey, on
    employees who have taken
    advantage of the services
    concerned
    • Used indexes: Overall Satisfaction, Effort Score for
    employees

    Supplier: Kantar TNS • Definition: analysis of the
    company "climate" and of the
    "People engagement" (i.e. for
    the stakeholder employee), in
    order to identify the drivers of
    motivation and satisfaction
    vis-à-vis the Company
    • Listening methodology: the research is run for group
    employees, trough a recurring
    web survey
    • Used indexes: Engagement Index, by a methodology in line
    with international best in class
    standards
    • Supplier of the technical platform is an external
    provider
    B, while the survey is
    managed internally by the
    People Insight function
    Internal service quality People engagement
    Succession planning index
    EDP is the Group Management
    Review process which allows to
    plan, manage and develop the
    group Leadership pipeline:
    • ~ 4,300 Executives involved, of which around 2,600 discussed
    during the EDP session across
    the group
    • Local EDP sessions to discuss all the position in EDP

    The Top Management positions subject to the discussion with
    the Chief Executive Officer
    EDP AT A GLANCE
    • Definition: The succession planning coverage ratio allowing to calculate the
    percentage of about 120 senior management group positions for which a
    successor pipeline has been identified. The aim is to assure a sustainable
    leadership pipeline

    Methodology: The succession plan analysis follows a structured process
    based on Executive Development Plan EDP outcomes

    Provider: Internal. The Coverage Ratio is yearly shared with the Board of
    Directors at the end of the process
    With reference to 2017, as shared with the Board of Directors, 93.5%
    of the strategic positions has a formalized succession plan
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    70 71
    › Goal Setting Framework
    With the reshaping of the group compensation approach, the Goal
    Setting process is impacted, especially for senior management
    whose variable remuneration, from 2017, has been more aligned to
    the group long term value creation and results.
    Since the new 2017-2019 Long Term Incentive Plan is launched,
    the Performance Screen for the Group CEO and the General
    Manager is not reported in this paragraph, as the LTI Plan for the
    CEO and the General Manager substitutes entirely the short term
    incentives. The LTIP scorecard is reported at paragraph 5.5.
    For the other senior managers for whom the 2017-2019 LTI
    Plan covers partially the total variable remuneration, annual
    Performance Screens reflects mainly the targets related to the
    Strategic Plan Transform 2019 (in particular for business Roles) and
    aligned with the Risk Appetite Framework, with differences given
    by the perimeter of reference and the relevant activities.
    Moreover, a specific KPI “Tone from the top on compliance culture”
    is envisaged, related to integrity towards conduct principles
    and spread of compliance and risk culture, to enhance overall
    organization awareness on these topics within the more general
    risk management framework.
    The goal setting framework described above is the starting point
    for goal cascading to group Executives and lower levels, where
    applicable. In the picture below is reported an illustrative example
    of goal cascading.
    Identified StaffKPIs
    ROAC
    ROAC
    (retail)
    ROAC
    (retail)
    ROAC
    (retail)RACE
    (corp.)
    RACE
    (corp.)
    RACE
    (corp.) New
    bus. EL
    New
    bus. EL
    New
    bus. EL
    Avg. PDPerf.
    stock EL
    Perf.
    stock EL
    Perf.
    stock EL
    % rating
    aging ∆ Gross
    NPE yoy
    ∆ Gross
    NPE yoy
    ∆ Gross
    NPE yoy
    ∆ Gross
    NPE yoy ∆ Op.
    costs
    ∆ Op.
    costs
    ∆ Op.
    costs
    ∆ Op.
    costs Cross
    selling
    Cross
    selling
    Cross
    selling
    Cross
    selling Tone from
    the top
    Tone from
    the top
    Tone from
    the top
    Tone from
    the top
    ILLUSTRATIVE
    SEVP
    1st reporting
    line
    2nd reporting
    line
    Other reporting lines
    The Group Long Term Incentive Plan (2017-2019 LTI Plan),
    approved by the Board of Directors on January, 10 2017, is
    aimed at aligning senior management interests to the long term
    value creation for the shareholders, to share price and group
    performance appreciation and sustaining a sound and prudent
    risk management, orienting the performance management
    measurement on a multi-year horizon.
    The Plan has also the characteristic to be qualified as a “retention”
    tool in order to retain key group resources for the achievement of
    the mid-long term group strategy.
    The 2017-2019 LTI Plan provides for an incentive in UniCredit free
    ordinary shares to employees who hold key roles within UniCredit
    in several installments and over a multi-year period, subject to the
    achievement of specific performance targets linked to the Strategic
    Plan Transform 2019 .
    5.5 Group Long Term Incentive Plan (2017-2019 LTI Plan)
    A. Defined upfront on the basis of 3 years of compensation.B. Malus conditions that reduce the payable amount based on profitability, liquidity, capital position.C. 100% upfront for Key Players not Identified Staf f.
    UniCredit Chief Executive Officer
    UniCredit General Manager
    Senior Executive Vice Presidents of UniCredit
    Executive Vice Presidents of UniCredit
    and of the Legal Entities of the group
    Other Key roles ~ 200 beneficiaries,
    including selected Talents not belonging
    to the aforementioned clusters
    The personnel belonging to Company Control
    Functions is not included in the Plan.
    The beneficiaries of the LTI Plan are:
    2017-2019
    LTI Plan: main features
    Amount at stake A
    Performance period • 3 years (aligned to UniCredit Strategic Plan Transform 2019)
    • 100% of total max variable remuneration for CEO and GM
    • 50% of variable remuneration for SEVPs
    • 30% of variable remuneration for EVPs of UniCredit and of the Legal Entities of the group
    • Smaller amount for Key Players (~ 200)
    Deferral period • 3 years deferral (Regulatory) subject to "malus" conditions B
    • Additional compulsory holding years (after which the shares become free to sell, only
    if the share ownership guidelines are respected)
    Vehicles and vesting • 100% UniCredit Shares
    • Cliff vesting of the award for CEO; ratable vesting for GM, SEVPs, EVPs and other Key Players C
    • Claw-back clause foreseen for 4 years after shares vesting
    Performance awards
    One award based on:
    • Gateway conditions on profitability, liquidity, capital and risk position
    • Achievement of a set of performance conditions focused on group targets, aligned to
    the Strategic Plan Transform 2019
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    72 73
    Allocation view
    The different percentages of payments in shares, starting from
    2020, are defined considering beneficiary categories, as described
    in the table below.
    The assigned shares will be subject to a three-year deferral period
    from the date of approval of the LTI Plan, as required by law.
    The overall final amount will be defined on the basis of the
    achievement of specific performance conditions linked to the
    Strategic Plan Transform 2019 , subject to continuous employment
    at each date of payment.
    Moreover, the shares will be assigned only on the basis of the
    respect of the minimum conditions of Company assets, capital and
    liquidity (“malus condition”), as well as in terms of the conduct
    of compliance with respect to the law, Company and group
    compliance rules, Company policies and to the integrity values
    mentioned in the Code of Conduct (including claw-back clauses).
    With reference to the performance period, if the threshold for the
    cumulative conditions is not reached, the award will be zeroed; on
    the other hand, the failure to reach the threshold for the conditions
    to be assessed at the end of each year implies the pro rata
    reduction of the incentive.
    With reference to the deferral period, if the threshold for the
    cumulative conditions is not reached, the award will be reduced
    from 50% to 100%, based on the assessment of the general
    context in which the result has been reported; on the other side,
    the failure to reach the threshold for the conditions to be assessed
    at the end of each year implies the pro rata reduction of the
    incentive.
    The claw-back rules are applied for the next 4 years to all
    payments regardless of the specific scenario (cliff or rateable
    vesting).
    LTI Plan 2017-2019
    PERFORMANCE PERIOD DEFERRAL PERIOD
    Cliff Vesting
    Chief Executive Officer
    2 Installments
    General Manager + Senior
    Executive Vice Presidents
    4 Installments
    Executive Vice Presidents & other
    Key Players (Identified Staff )
    100% Upfront Vesting
    Other Key Players
    (Not Identified Staff )
    HOLDING 1 YEAR
    100% UPFRONT SHARES
    HOLDING 2 YEARS
    40% UPFRONT SHARES
    HOLDING 1 YEAR
    20% DEFERRED SHARES
    HOLDING 1 YEAR HOLDING 1 YEAR
    20% DEFERRED SHARES 20% DEFERRED SHARES
    HOLDING 2 YEARS
    40% UPFRONT SHARES
    HOLDING 1 YEAR
    60% DEFERRED SHARES
    HOLDING 1 YEAR PERFORMANCE PERIOD
    GATEWAYS & RISK ADJUSTMENT MALUS CONDITIONS
    PERFORMANCE PERIOD
    PERFORMANCE PERIOD
    PERFORMANCE PERIOD CLIFF VESTING 100%
    SHARES
    AWARD GRANT
    2017
    Strategic Plan Transform 2019 Claw-back period
    2018 2019 2020 2021 2022 2023
    It is expected a correlation mechanism with risk, based on a
    qualitative assessment of the Risk Appetite Framework and carried
    out through the annual risk dashboard (more details in the parag.
    5.3) during the Plan time horizon. Based on this assessment, a
    progressive reduction of the incentive can be envisaged until
    zeroing, in case of material breaches of RAF across the period.
    It is foreseen also a qualitative assessment by the Remuneration
    Committee and the Board of Directors on the basis of non-purely
    formulistic elements, to keep into consideration the value creation
    for shareholders (i.e. Total Shareholder Return) in absolute and
    relative terms, the achievement of further managerial KPIs
    included in the Plan Transform 2019 (i.e. cross selling, funding
    gap, etc.), the market context, the remuneration trends, etc., that
    could reduce down to “zero” or increase up to maximum 20% the
    payments of the Plan (no upward discretionality for CEO). However,
    the overall final value of the assignments of the LTI Plan could not
    exceed the 100% of the original assignment.
    Once the achievement of the performance indicators has been
    checked, the Board of Directors will grant the assignments of
    the shares, on the basis of the percentages of payments and the
    installments foreseen for the different beneficiary categories.
    Evidence of misconduc t or gross negligence by the beneficiar y during the per formance, deferral period and claw-back period (e.g. breach of code of conduc t and other internal rules, especially concerning risks) will trigger malus & claw-back conditions.A. NOP excluding income from buy-back of own debt and from the fair value accounting of own liabilities.B. Net Profit stated in the Balance Sheet, excluding any ex traordinar y items as considered appropriate by the Board of Direc tors upon Remuneration Commit tee proposalC. Measured ever y year at Dec 31st.D. CE T1 capital ratio is the CE T1 capital of the institution expressed as a percentage of the total risk exposure amount (RWA). Minimum CE T1 required by ECB for the payment of variable compensations for 2018. For the next years, in case Authorities recommendations change the threshold will be updated accordingly. In case Authorities recommendations are not applicable, R AF Trigger will be applied. In line with the ECB recommendations on variable remunerations, the CE T1 ratio requirement is increased from 10.3% to 10.4% according to the “linear path” towards the “fully loaded” requirement to be reached by Januar y 1, 2019. Thanks to the lower P2 SREP requirement applied to the group in 2018, the increase is lower than previously estimated on the basis of regulator y requirements in place last year.E. The >100% threshold is defined as limit in the 2017 R AF. This threshold is higher than the Minimum Regulator y Target for 2017 (80%). For the nex t years, in case of change in the Minimum Regulatory Target as more restrictive than the threshold currently used, the same will be updated accordingly.F. The >100% threshold is defined as limit in the 2017 R AF, in absence of a Minimum Regulator y requirement for 2017 but foreseen for the 2018 (100%). For the nex t years, in case of change in the Minimum Regulator y Target as more restric tive than the threshold currently used, the same will be updated accordinglyG. Malus conditions are measured on a yearly basis before the payment of the deferred installments.
    • ∑ 2017-19 NOP Adjusted A > 0
    • ∑ 2017-19 Net Profit B > 0
    • CET1r fully loaded C,D ≥ 10.4%
    • Liquidity Coverage Ratio C,E > 100%
    • Net Stable Funding RatioC,F > 100%
    • No significant breach of RAF across the period • ∑ 2020-22 NOP Adjusted
    A > 0
    • ∑ 2020-22 Net Profit B > 0
    • CET1r fully loaded C,D ≥ 10.4%
    • Liquidity Coverage Ratio C,E > 100%
    • Net Stable Funding RatioC,F> 100%
    PERFORMANCE PERIOD
    2017 2018 2019
    Strategic Plan Transform 2019 Claw-back period
    DEFERRAL PERIOD
    2021 2022 2023 2020
    GATEWAYS & RISK ADJUSTMENT MALUS CONDITIONS G
    Gateways, Malus Conditions and Claw-back
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    75 74
    For the purpose of determining the number of shares to be
    allocated, the performance indicators specified in the LTI Plan
    and evaluated at the end of the period of the Plan, consistent
    For the selection of performance indicators, a limited number of
    specific indicators has been included, taking into consideration the
    trade-off between the clarity and immediacy of the evaluation, versus
    the inclusion of a greater number of KPIs, which would offer a broader
    coverage but less incisiveness on the final evaluation.
    In addition, target referred to the group perimeter have been defined
    for all participants, in order to ensure alignment to Plan Transform
    2019 , as announced to the market.
    As required by law, distribution of share payments foresees share
    retention periods (a retention period of 2 years for upfront shares and
    of 1 year for deferred shares).
    Share conversion price was defined on the basis of the average price
    of shares during the 30 days prior the Board of Directors of Jan 10,
    2017 that approved the Plan. The price, in line with the decision taken
    during the same session of the Board of Directors, has been then
    adjusted following the reverse stock split and by applying the AIAF
    adjustment factor (“K Factor”) to neutralize the dilutive effect of the
    Share Capital increase for cash. 18 The final price resuming from these
    adjustments is equal to € 13.816.
    Following the finalization of the individual allocation process, the
    maximum number of UniCredit shares to be allocated under the Plan
    is equal to 5,320,443. The CEO and the General Manager are allocated
    a maximum number of 521,134 shares each.
    The 2017-2019 LTI Plan envisages an expected impact on UniCredit
    share capital of approximately 0.24% 19, assuming that all the free
    shares will be assigned to employees. The total dilution for all share
    plans currently in place, including 2018 Group Incentive System,
    equals 0.82%.
    with Plan Transform 2019 targets, are the following ones for all
    beneficiaries. 17
    The Board of Directors could establish to assign free UniCredit
    ordinary shares that will be freely transferable at the end of the
    shares retention period, or in the year of the assignment, but subject
    to restrictions on the transfer for the share retention period (2 years
    for upfront payments and 1 year for deferred payments).
    During the implementation phase, potential changes can be made
    to the LTI Plan, in order to ensure compliance with the laws and
    regulations from time to time in force in the countries where the
    group Legal Entities are established. Such amendments shall be
    adopted in accordance with the provisions applicable and in particular
    with the “Disposizioni di Vigilanza per le Banche in materia di
    politiche e prassi di remunerazione e incentivazione” (Circular n.285 of
    December 17, 2013, 7th update of November 18, 2014).
    2017 progress status
    An update on the LTI Plan progress status was provided to the
    Remuneration Committee on February 6, 2018.
    All the entry conditions (gateways&risk adjustment) have been met
    i n 2 0 1 7.
    The Company 2017 results referred to the LTI Plan KPIs are fully on
    track towards 2019 targets achievement.
    Only to contextualize the progress status, and with no impact on
    2019 assessment, 2017 results on the LTI KPIs are:
    • ROAC 12.1%( 2017 target 9.1%) 20
    • Cost/Income ratio 57.9% (2017 target 60.9%)
    • Net NPE € 21.2 bn (2017 target € 23.2 bn).
    The actual evaluation of the overall LTI Plan, including the appraisal of
    performance targets, will be carried out at the end of the three years
    performance period (i.e. at the end of 2019 on end-of-Plan targets).
    17. As specified in the par. 5,4, for the Group Chief Executive Of ficer and for the General Manager, the LTI Plan substitutes entirely the shor t term incentives.18. Share Capital increase and reverse stock split approved by the General Shareholders’ Meeting on Januar y 12, 2017.19. Fully loaded in the first year.20. ROAC at 12.5% CE T1 ratio target (allocated capital based on CE T1 ratio target constant at 2019 level).
    A Net Non Performing Exposure (after provisions)
    B Linear progression (eg. 50% payout for ROAC at 8.5%)
    KPIPerimeter
    ROAC Weight
    Target
    Transform 2019
    Value
    creation
    Cost/
    Income ratio Industrial
    sustainability
    NET A NPE Group
    Group
    Group
    9%
    52%
    20.2 bn
    50%
    25%
    25% Risk
    Assessment criteria
    Treshold Payout
    ≥ 9%
    8% - 9%
    < 8% 100%
    0% - 100%
    B
    0%
    ≤ 52%
    55% - 52%
    > 55% 100%
    0% - 100%
    B
    0%
    ≤ 20.2 bn
    22 - 20.2 bn
    > 22 bn 100%
    0% - 100%
    B
    0%
    In 2008 the UniCredit Group Employee Share Ownership Plan
    “Let’s Share” (The Plan) was launched for the first time, offering
    to employees the possibility to invest in UniCredit ordinary shares
    at favourable conditions. So far, more than 10,000 individuals
    have participated in “Let’s Share” from 14 countries overall:
    Austria, Bulgaria, Czech Republic, France, Germany, Hong Kong,
    Hungary, Italy, Luxembourg, Poland, Romania, Serbia, Slovakia
    and the United Kingdom.
    On May 26, 2017, as approved by the Annual General Meeting on
    April 14, 2016 and in connection with the 2016-2019 Strategic
    6. Group Employee Share
    Ownership Plan
    UniCredit affirms the value of share ownership as a valuable tool for enabling the engagement, affiliation
    and alignment of interests among shareholders, management and the overall employee population.
    Plan Transform 2019 , the 2016 employee Share Ownership Plan
    (“Let’s Share for 2017”) was launched.
    The Plan offered to participants the opportunity to purchase
    UniCredit shares, receiving a 25% discount in the form of free
    shares granted by the Company, subject to a 1-year holding
    period. The Plan provided for the shares to be purchased on the
    market with no diluting impact on share capital.
    During the Strategic Plan horizon, new solutions can be evaluated
    to enhance employee share ownership.
    Section III
    Annual Compensation Report - 6. Group Employees Share Ownership Plan
    UniCredit ? Group Compensation Policy 2018
    Section III
    Annual Compensation Report - 5. Group Compensation Systems
    Group Compensation Policy 2018 ? UniCredit


    76 77
    7. Compensation Data
    The vested component from previous years refers to cash and
    equity awards to which the right has been matured as the
    performance conditions have been achieved:
    • the vested components in cash refer to Group Incentive System
    2016 and, if present, to other forms of variable remuneration;
    • the vested components in shares refer to Group Incentive Systems
    2013, 2014 and 2015 and, if present, to other forms of variable
    remuneration.
    The unvested component from previous years refers to cash and
    equity awards to which the right has not yet matured and for which
    any potential future gain has not been yet realized and remains
    subject to future performance:
    • the unvested components in cash refer to Group Incentive
    Systems 2015, 2016 and, if present, to other forms of variable
    remuneration;
    • the unvested components in shares refer to Group Incentive
    Systems 2014, 2015 and 2016 and, if present, to other forms of
    variable remuneration.
    The value of the shares shown as unvested equity is calculated
    considering the arithmetic mean of the official market closing price
    of UniCredit ordinary shares during the period January 23-February
    23, 2018.
    Variable remuneration paid with reference to 2017 from previous
    years includes payouts based on demonstrated multi-year
    performance achievements related to Group Incentive Systems
    plans and, if present, to other forms of variable remuneration.
    All stock options granted under existing group LTI plans represent
    zero gain for the beneficiaries as long as the entry conditions will
    not allow the exercise.
    7.1 2017 Remuneration Outcomes
    Data in k.A. 2017 full year gross fixed remuneration, except for non-executive Direc tors, whose fees are those ac tually paid for 2016 and calculated pro rata on the basis of the methodology provided by Ar ticle 84-quater of Consob Issuers Regulation no. 11971.B. 2017-2019 LTI Plan not included since it is long-term per formance and it has not been evaluated.
    During 2017, 27 beneficiaries were awarded a total remuneration equal to or greater than € 1 m. In particular:
    Severance and sign-on payments defined in 2017 to 87 Identified
    Staff 21 amounted to € 55,657,065.
    The highest severance payment paid to a single beneficiary was equal
    to € 5,657,888.
    The payments were determined in line with Group Policy guidelines and
    relevant legal and contractual framework.
    For other details on severance payments, namely local calibrations and
    exceptions applied in 2017, refer to paragraph 5.2.
    The total compensation costs at group level amounted at € 6,905 m in
    2017, out of which the variable compensation pool amounted € 511 m.
    21. Data related to severance payments include payments to individuals who - having lef t the group during the first quar ter of 2017 - were not mapped as Identified Staf f for 2017 but were considered as such in 2016.
    FixA €Shares
    Upfront
    €Shares B Deferred
    Variable 2017
    €Shares
    Vested in 2017
    €Shares
    Un-Vested
    Deferred Variable from previous exercises

    Shares
    Variable paid in
    2017 from previous exercises
    Num.
    CEO
    Other executive
    Directors
    Non executive
    Directors
    General Manager
    Deputy General
    Manager & SEVP
    EVP
    SVP
    Other relevant staff Population
    (as at Dec 31, 2017)
    1
    0
    17
    1
    18
    102
    430
    5730
    0
    0
    0
    1,682
    5,105
    17,315
    20,3270
    0
    0
    0
    0
    144
    287
    9 0
    0
    0
    0
    2,523
    6,155
    12,627
    8,9630
    0
    0
    0
    4,206
    10,114
    22,455
    22,053 0
    0
    0
    0
    746
    1,321
    2,702
    4,3940
    0
    0
    373
    5,522
    10,986
    17,441
    15,947 0
    0
    0
    291
    4,857
    8,824
    19,802
    24,8020
    0
    0
    164
    2,699
    4,078
    5,746
    363
    0
    0 0
    200
    3,946
    7,009
    11,516
    8,112
    0
    0 0
    477
    13,006
    23,344
    34,605
    31,753
    1,200
    0
    3,606
    1,200
    12,809
    36,980
    92,995
    96,858
    1 ≤ TC < 1.5 m
    Total
    Compensation (TC) N° Identified Staff
    1.5 ≤ TC < 2 m
    2 ≤ TC < 2.5 m
    2.5 ≤ TC < 3 m
    3 ≤ TC < 3.5 m
    3.5 ≤ TC < 4 m
    4 ≤ TC < 4.5 m
    4.5 ≤ TC < 5 m
    TC ≥ 5 m
    22
    5
    0
    0
    0
    0
    0
    0
    0
    Section III
    Annual Compensation Report - 7. Compensation Data
    Section III
    Annual Compensation Report - 7. Compensation Data
    Group Compensation Policy 2018 ? UniCredit UniCredit ? Group Compensation Policy 2018


    78 79
    Total compensation policy for non-executive Directors, group
    Identified Staff and for the overall group employee population
    demonstrates in particular how:
    • remuneration of the non-executive Directors, as approved by the
    AGM, does not include variable performance-related pay;
    • variable remuneration for group Identified Staff is in line with
    their strategic role, regulatory requirements and our pay for
    performance culture;
    7.2 2018 Remuneration Policy
    • the general employee population is offered a balanced pay-mix
    in line with the role, scope and business or market context of
    reference.
    In line with Capital Requirements Directive (CRD IV) a specific limit
    to the ratio of the variable and fix component of the compensation
    has been established.
    Our employees enjoy welfare, healthcare and life balance benefits
    that supplement social security plans with minimum contractual
    requirements. These benefits are intended to provide substantial
    guarantees for the well-being of staff and their family members
    during their active careers as well as in retirement.
    In Italy, among the complementary pension plans, there are
    defined benefit plans and defined contribution plans. In most
    cases, benefits are paid out once the retirement requirements are
    satisfied. In defined benefit plans the benefit’s calculation is known
    in advance, while in defined contribution plans the benefit depends
    on allocated asset management results.
    From 2017 complementary pension plans in Italy are external
    pension funds, legally autonomous from the group.
    These plans are closed and do not allow new subscriptions, the
    only exception is represented by the defined contribution plan
    section of the “Fondo Pensione per il Personale delle Aziende del G
    gruppo UniCredit” (which was composed by approximately 35,200
    enrolled active employees in 2016, as reported in the 2016 Pension
    Fund Annual Report). Within this section subscribers can distribute
    contribution depending on their own risk appetite - among various
    investment lines (one in the Insurance sector, three in the Finance
    sector - corresponding to Short, Medium and Long Term options),
    characterized by different risk/yield ratios. In addition, the enrolled
    employees may open complementary pension plan positions in
    favor of their family members dependent for tax purposes.
    Moreover, in most countries where UniCredit is present,
    complementary pension plans are available for the employees.
    More details and information can be found in our Integrated Report
    and the relevant Supplement.
    7.3 2017 Benefits Data
    Fixed and other non-perfomance
    related PayCompensation Pay-Mix
    Variable
    performance-related Pay
    Chairman and Vice-Chairman Group employee population
    Directors
    Statutory Auditors
    Business Areas
    A
    Corporate center/Support functions B
    Overall group Total Group employee population Non-executive Directors
    100%
    100%
    100%
    92%
    93%
    93% 0%
    0%
    0%
    8%
    7%
    7%
    A. Commercial Banking Italy (excluding the local Corporate Centre), Commercial Banking Germany (excluding the local Corporate Centre), Commercial Banking Austria (excluding the local Corporate Centre), Corporate & Investment Banking (excluding the governance functions), Asset Gathering, CEE, Non-Core. B. Corporate Center Global, COO Ser vices, the governance func tions in CIB and the local Corporate Centres in Italy, Germany and Austria.
    Section III
    Annual Compensation Report - 7. Compensation Data
    Section III
    Annual Compensation Report - 7. Compensation Data
    Group Compensation Policy 2018 • UniCredit UniCredit • Group Compensation Policy 2018


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WSZYSTKIE KOMUNIKATY SPÓŁKI
Informacje o spółce
Nazwa:UniCredit S.p.A.
ISIN:IT0005239360
NIP:00348170101
EKD:
Adres: via Alessandro Specchi 16 00186 Roma
Telefon:+39 0288622612
www:www.unicredit.eu 
Kalendarium raportów
2018-08-01Raport półroczny
2018-10-08Raport za III kwartał
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