MFE Mediaforeurope N : 03.05.2024 - Remuneration Report

REMUNERATION POLICY

Introduction

This remuneration policy approved by the Board of Directors on 17 April 2024, as drawn up by the Nomination and Remuneration Committee of the Board of Directors on 9April 2024, sets out the principles and guidelines with respect to the remuneration of MFE-MEDIAFOREUROPE N.V. (hereafter MFE) for the year 2024.

The Remuneration Policy is based on the conviction that there is a close connection between the remuneration of the Chief Executive Officer, the Executive Directors, the company performance and the creation of value over the medium and long term.

In this regard, the pursuit of a Remuneration Policy capable of directing business strategy and ensuring full consistency between overall "management" compensation and company performance is a key element for meeting investor expectations and strengthening the confidence of all stakeholders.

Following the Redomiciliation to the Netherlands, the MFE Remuneration Policy has been designed taking into account all applicable laws and regulations, such as Art. 2:135a of the Dutch Civil Code (DCC), the Dutch Corporate Governance Code (DCGC), and the Articles of Association of the Company.

Executive Summary: Key elements of the Remuneration Policy for CEO, Executive Directors and non Executive Directors

Fixed Component

		• Compensates responsibilities assigned, experience and
	Purposes and Main	distinctive skills possessed.
	Characteristics	• Is in line with the best market practices and such as to
		guarantee an adequate level of retention.
		CEO	1,408,000
	Amount
	Executive
		Directors	Pay linked to the significance of the position.

Variable short- term component

	• Ensures a direct link between remuneration and performance
	results; its purpose is to reward the achievement of corporate
	and personal objectives.
Purposes and Main	• The system of correlation with the Company's results ensures
Characteristics	financial balance and the incentive function of the plan.
	• The upfront allocation of a portion of the medium-long term
	component aims to encourage sustainable performance over
	time.
Mechanism of
correlation with	Group Net Profit and Italy EBIT
Group results
		1,600,000
Amount	CEO	Maximum incidence of short term incentive on
		fixed remuneration: 107%

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			Executive		560,000
				Maximum incidence of short term incentive on
			Directors
				fixed remuneration: 32% (average)
			CEO		Net Financial Position (45%), Group EBIT (45%)
		Performance		and ESG Scorecard (10%)
		Objectives	Executive		Defined according to the scope of assigned
			Directors:		responsibility + ESG Scorecard
		Reference	Budget (which corresponds to a 100% payout).
		Payout scale	Performance range: 91% - 105%
		Payout range: 10% - 125% (0 if performance <91%)
			The plan's regulations allow the Company to utilise the claw-
		Claw-back and	back and malus clauses, which enable the Company, under
		certain circumstances, to decrease the variable remuneration
		Malus
		awarded or clawback variable remuneration already paid, in
			whole or in part.

Variable, medium/long- term component

			• Ensures the growth of the Company's value and the
			achievement of results sustainable over time, the loyalty of the
			Executive Directors, the alignment of the objectives of
			management with those of the shareholders and the support to
	Purposes and Main		the ESG Group Strategy.
	Characteristics		• Under the plan, recipients may choose to convert 25% or 50%
			of their short term target bonus to the long term incentive plan
			into rights to receive shares of the Company; at the same time,
			the Company attributes a corresponding number of rights to the
			beneficiary (by means of a matching right).
			Depending on the short-term portion that the recipients choose
	Amount		to convert, which is doubled by means of the matching right.
		Maximum incidence of long-term incentive on fixed
			remuneration: CEO 142%; AE 43% (average)
	Performance		Free Cash Flow of the Group over the three-year period (40%),
		Adjusted Group Net Profit over the three-year period (40%),
	Objectives
		relative Total Shareholders Return (10%), ESG (10%)
			Three-year forecast for economic and financial indicators (which
	Reference		corresponds to a 100% payout); Competitor panel for TSR,
			Group ESG Target.
	Payout scale		Performance range: 75% - 125%
		Payout range: 50% - 125% (0 if performance <75%)

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				Vesting	The performance is assessed with a time horizon of three years
				for each assignment cycle.
				Lock-Up	20% of the shares earned are subject to a lock-up period of two
				years.
					The plan's regulations allow the Company to utilise the claw-
				Claw-back and	back and malus clauses, which enable the Company, under
				certain circumstances, to decrease the variable remuneration
				Malus
				awarded or clawback variable remuneration already paid, in
					whole or in part.
	Non -Executive				40,000 € (raised to 60,000 € for the Chairman). Fee of 40,000 €
			Amount	(raised to 50,000 € for the Chairmen) is added for the members
	Directors
				of each internal board committee

Theoretical pay mix

	Chief Executive Officer	Executive Directors
	24%	12%
25% of short-term	41%	18%

variable component allocated to LTI

70%

35%

			22%
50% of short-term	42%		37%
variable component			11%
allocated to LTI
			67%
		21%
	Fixed Component	Short term	Medium - Long Term

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Governance model

Bodies and/or individuals involved

The MFE Remuneration Policy is defined clearly and transparently through a shared process involving the Board of Directors, the Nomination and Remuneration Committee, the Shareholders' Meeting and the relevant company department (Central Human Resources, Operations, Technologies and Procurement Department).

The Board of Directors, following proposals by the Nomination and Remuneration Committee, establishes the general compensation policy for the Chief Executive Officer and the other Executive Directors. The Executive Directors do not participate in the discussion and approval of the Remuneration Policy by the Board of Directors.

The Shareholders' Meeting approves the Remuneration Policy at least every four years and in case of any amendments. From 2020, the resolution of the Shareholders' Meeting on the Remuneration Policy is binding, while the Remuneration Report is subject to a non-binding advisory vote by the Shareholders' Meeting.

The Board of Directors is directly responsible for the implementation of the remuneration policy of the Chief Executive Officer and the other Executive Directors for the position they hold in MFE. The CEO and the Central Human Resources, Operations, Technologies and Procurement Department oversee the application of the Remuneration Policy of the Executive Directors.

The authority to establish remuneration for Non-Executive Directors is vested in the Shareholders' Meeting.

As provided for by Art. 2:135a (4) and (5) DCC, any temporary derogations from remuneration policies can only apply in exceptional circumstances, such as where derogation from the Remuneration Policy is necessary to pursue long-term interests and overall sustainability or market longevity and must nevertheless be in line with the principles which guide the Company Remuneration Policy. In such case, the Board of Directors will pass a resolution for a temporary derogation in remuneration matters, as referred to in chapter 3 of this Remuneration Policy, after receiving the opinion of relevant Committees. Also to this effect, the Board of Directors consults experts of professional renown and know-how, after having ascertained their independence and freedom from any conflicts of interests.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee includes three non-executive and independent directors, with proved experience and competences in financial and legal matters whose term in office lasts until the expiry of the mandate of the entire Board of Directors.

The Committee, concerning remuneration, fulfils the following tasks:

1. in accordance with provision 3.1.1 of the Dutch Corporate Governance Code ("Code"), submits a clear and understandable proposal to the Board of Directors concerning the remuneration policy to be pursued with regard to the Directors. The Board of Directors should present the policy (it should include the matters referred to Section 2:135a of the Dutch Civil Code - DCC) to the Shareholders' Meeting for adoption;

1. prepares the remuneration report pursuant to Art. 2:135b of the DCC and provision 3.4.1. of the DCGC;

1. periodically evaluates the adequacy, overall consistency and actual adoption of the Policy concerning individual Board Directors, adopted by the Company, submitting related proposals to the Board of Directors;

1. gives a prior non-binding opinion on proposals related to the compensation and on establishing performance goals related to the variable part of the compensation package of the Chief Executive Officer;

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1. makes proposals to the Board of Directors concerning the criteria, categories of beneficiary, amounts, terms, conditions and procedures for the share-based remuneration plans.

Intervention by Independent Experts

On a regular basis, both the relevant company department (Central Human Resources, Operations, Technologies and Procurement Department) and the Nomination and Remuneration Committee analyse the fairness and competitiveness of the remuneration packages of the Chief Executive Officer, in overall terms and for each component. They also consult independent external advisors free from conflicts of interest and/or companies specialised in executive remuneration that are recognised for their reliability and for the comprehensive nature of their databases used for national and international comparisons and their use of standard methodologies to assess the complexity of assigned roles and powers.

Voting record on the Remuneration Policy

In recent years, the Nomination and Remuneration Committee has paid increasing attention to the voting record of the Shareholders' Meeting on the Remuneration Policy and has given increasing importance to the recommendations on remuneration expressed by proxy advisors. In doing so, it has developed engagement activities and gradually introduced improvements in its policies so as to guarantee maximum alignment with international best practices.

In 2020, the Shareholders' Meeting was convened for the first time to express a consultative vote on the second section of the Report on Remuneration, related to the compensation paid in 2019.

Despite there being essentially zero votes against, conversations with the Proxy Advisors and consideration of their recommendations led the Group to increase the level of disclosure within this Report, with particular reference to the targets of the incentive systems, a feature that also distinguishes this year's Report.

This improvement trajectory has led to a gradual increase in shareholder consent, above 99%, as shown in the following graph related to Remuneration Policy.

* The votes of the years 2017-2019 refer to the Remuneration Report in its entirety; starting from 2020, separate voting has been introduced for the two sections.

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Main changes in the Remuneration Policy

The main changes introduced by this Remuneration Policy concern the CEO's remuneration and the long-term incentive plan. After considering the growing complexity and dimension managed by the group, deriving from the internalization process, it was considered to revise the remuneration of the CEO of MFE. For this, a remuneration benchmark was commissioned to a primary consultancy firm, which confronted the CEO's remuneration with some peer European companies. After this consultation, it was decided to redetermine the CEO's remuneration to make it more coherent with the ones in the market. The proposed increase regarded the short-term variable component of the remuneration (increased to 1.6 million euro), since its incidence on total was not aligned with peers. This way, also thanks to the allocation of part of this component to the long-term variable bonus and the subsequent matching by the company, the results are a better alignment between the remuneration of the CEO and the company performance and a pay-mix in line with the market best practices.

With reference to the medium-long term incentive plan, this policy proposes a new medium-long term incentive and fidelity plan, which the Shareholders' meeting will be asked to approve on 19 June 2024. With the new plan two important features are introduced. Firstly, an ESG objective is added among the performance objectives, and this is meant to furtherly strengthen the ESG strategy that the group is pursuing in the last years, oriented towards the protection of the environment and the maintenance of the excellence levels reached in the valorisation of human capital and diversity, that are of great importance to MFE. The TSR objective has also been made more challenging, determining the target at a higher level than the median in the panel of European media companies against which to measure the relative positioning of the Company's TSR. Secondly, the type of shares involved in the plan is redefined, providing for the attribution of only "MFE A" shares, instead of the two types of shares currently allocated.

Furthermore, this Policy contains an update of the information and an adaptation of the targets and of the ESG objectives in the short-term incentive plan.

Scope and Principles of the Remuneration Policy

The Remuneration Policy is inspired by the following objectives and guiding principles:

1. Alignment with the business strategy

1. Attraction and retention of valuable staff o Link with performance and value creation o Consistency and fairness

	Alignment with the	Values, skills and conduct aligned with the business strategy are reinforced by
	business strategy	having an overall compensation structure that includes a balanced package of
		fixed and variable, material and non-material components. This allows for an
		appraisal of the responsibilities and criticalities of the position held, the quality
		of the professional contribution and the results achieved in the short and
		medium/long term.
	Attraction and retention	MFE believes the Remuneration Policy is a key vehicle for attracting, retaining
	of valuable staff	and motivating key staff and for contributing to the creation of sustainable
		value over the medium and long term for all stakeholders. To this end, the
		Remuneration Policy is structured taking into account scenario analyses and to
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	guarantee competitiveness with the outside market and to ensure internal
	equity, also consistently with the defined performance.
Link with performance	The use of a variable component of the remuneration, split into a short-term
and value creation	and a medium-long-term(share-based) component, makes the Remuneration
	Policy consistent with the creation of sustainable value for its shareholders and
	the growth of the market price of MFE's shares.
Consistency and fairness	Compensation tools are coherently structured to ensure fairness in terms of
	the level of responsibility assigned and contribution to the Group's
	performance and are monitored taking into account pay ratios within the
	Company.

The Remuneration Policy is defined consistently and in order to support the achievement of the Company's main strategic objectives:

1. consolidating the leadership in the nationwide core business by providing a distinctive broadcasting service model, maximising commercial value, streamlining production processes and overseeing regulatory and infrastructural development;

1. evaluating development opportunities for supranational media activities (mainly in OTT, AD Tech and Content).

1. the pursuit of sustainability-oriented growth, focusing on protecting the planet, valuing people through the recognition of diversity and the protection of their well-being, and on the dissemination of an ESG-oriented culture and values through its communication channels.

In order to do this, the Policy provides a steady balance between short and long-term, fixed and variable components, and benefits.

In a market as mature as free-to-air television, variable components aim to reward high profitability - which is essential for creating value for shareholders - and cash generation, and ultimately to support the company's growth strategy. Alongside these indicators, the specific performance objectives assigned to Key Management Personnel under the short-term incentive system based on each of their organisational responsibilities enable the Group to perform its key objectives, with particular reference to the leadership in the advertising market and to the cost reduction. Starting from 2022, in addition to the traditional financial indicators, non-financial indicators have been added, aimed at guiding and supporting the Group's sustainability strategy.

Using exclusively share-basedmedium/long-term incentive instruments helps to direct performance towards creating sustainable value over time. This aim is further supported by extending the vesting and lockup period to a total of 5 years, starting from 2021.

Consistency between Remuneration Policy and People Strategy

The Group's Remuneration Policy has been drawn up to be consistent with human resource management and enhancement policies, which recognise the essential role played by the professional contribution of the Group's people in ensuring business success and development. The Group therefore manages its human resources by respecting the personality and professionalism of each employee, enhancing and developing their professional skills and abilities, and protecting their mental and physical well-being (also in terms of occupational health and safety), all the while promoting loyalty, trust and rejecting all forms of discrimination and exploitation.

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Each employee's pay is determined by an assessment carried out by the Human Resources Department and by the Business Managers which, to ensure that internal pay is competitive with the market benchmarks, considers the area of responsibility, the task performed and principles of fairness within the Group, as well as targeting the attraction and retention of key staff.

In assessing the fairness and competitiveness of remuneration packages, the Group uses the research tools and pay benchmarks provided by leading consultancy firms.

For variable components in particular, the Policy sets profitability targets to serve as a homogenous, coherent and consistent criterion for all compensation instruments used. For instance, it determines the entry point and/or penalty in each of the top manager and executive incentive systems, and is the parameter used as the basis for calculating the company bonus paid to the rest of the workforce.

In particular, from a Pay for Performance perspective, the penalties for only partially achieving the target productivity are proportional according to each employee's level of responsibility and thus the differing impacts they can have on the Group's profits (CEO 100%, Executive Directors and first and second-grade Executives 50%, Other Directors 25%, Middle Manager and Work Officer 0%).

The Group Remuneration Policy inspires the development of principles and criteria underlying the policies applied to all the companies belonging to the Group so that there is consistency among all the remuneration systems of the Group.

In a total reward perspective all employees, regardless of their category, also benefit from numerous welfare and wellbeing services, including health care and supplementary pension plans.

Social Acceptance

The perspective and input of internal and external stakeholders have been taken into account in defining and implementing the Remuneration Policy. In the last years the Group has given increasing importance to the recommendations on remuneration expressed by proxy advisors and investors, pursuing a path of continuous improvement, which led to obtaining an excellent level of AGM's approval on the 2023 Remuneration Policy, with 99.10% of favourable votes.

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Composition of the Remuneration of the Chief Executive Officer and the other Executive Directors

Reference Peer Group

As part of the assessment of the competitiveness of the CEO's remuneration, with the support of a leading consultancy firm specialized in Executive Compensation, a reference Peer Group has been defined consisting of 13 European companies belonging to the Tel.Co., Media & Entertainment sector listed on regulated markets, on which a remuneration benchmark was analysed.

The companies were identified on the basis of dimensional criteria (capitalization, turnover, number of employees).

Peer Group

WPP, Telecom Italia, Publicis Groupe, Vivendi, RTL Group, Lagardère, Koninklijke KPN, ITV, Prosiebensat 1 Media, Informa, Television Francaise 1, Metropole Television, RCS Mediagroup

Structure of Remuneration

The structure of the remuneration of the Chief Executive Officer and the other Executive Directors comprises the following components:

Fixed component	o it is defined with reference to the responsibilities assigned and distinctive
	competencies possessed
	o it is monitored periodically against market benchmarks to guarantee an
	adequate level of retention
Variable short-term	o it ensures a direct link between remuneration and performance results;
component	its purpose is to reward the achievement of corporate and personal
	objectives.
Variable medium/long-	o it ensures the growth of the Company's value and the achievement of
term component	results sustainable over time, the loyalty of the Board of Directors and the
	alignment of the objectives of management with those of the
	shareholders.
Benefits	o include non-monetary forms of remuneration, complementing the other
	remuneration elements; they provide for competitive advantage and
	address the various needs of the executive (welfare and improved quality
	of life).

Fixed component

The fixed remuneration of the Chief Executive Officer and the other Executive Directors is defined in relation to the responsibilities assigned, the complexity of the position, the experience and distinctive competence of each person. It is periodically monitored against market benchmarks, in particular through the use of remuneration

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databases prepared by a leading consulting firm specialised in remuneration, in order to ensure adequate retention. The weight of the fixed component, a distinctive characteristic of the Company, is instrumental in preventing actions based on short-term opportunities.

The fixed component is subdivided into:

1. Gross annual compensation (GAC), related to the significance of the position, which the Chief Executive Director and the other Executive Directors receive if they are employees of the company.

1. Compensation the CEO receives for the position of "Director charged with specific tasks" and the other Executive Directors as members of the Management Board. This compensation is set to 40,000 euros gross per year for the position of Director to which a compensation of 1,000,000 euros gross per year is added for the CEO for the specific position. The Board of Directors will determine the compensation for the Directors charged with specific tasks, in line with this Policy. For the specific positions assigned with reference to the subsidiaries, the competent Boards may determine, in each specific case, the relevant remuneration.

Variable short-term component

The Annual Incentive System adopted by MFE, called SIA, is applicable to the Chief Executive Officer, the other Executive Directors and all Group Executives. This system has the main objective of strengthening and guaranteeing the alignment between how individuals act and short-term company objectives.

The SIA plan is governed by a specific regulation, distributed to each participant, which sets out all the detailed principles of the underlying the system, including the accessory clauses provided by the best practices on incentive matters.

In particular, the plan provides that for each recipient, objectives will be set that relate to their own area of responsibility. The extent to which these individual objectives are achieved will determine the actual bonus paid out, taking into account the target value set for each manager. Deductions may be made to this target value if certain productivity thresholds are not met, as illustrated below.

Mechanism of correlation

Starting from 2019, a single correlation mechanism has been applied to both the Chief Executive Officer and the other Executive Directors, between the Group's economic results and the amount of payable incentives; this can determine a reduction in their target value, based on the performance of two parameters of the financial statements: Group Net Profit and EBIT Italy.56 In addition to being consistent with the principle of internal equity, this single mechanism makes it possible to align the managerial actions towards achieving challenging and shared performance targets among all system recipients.

In particular:

1. If Group Net Profit is negative, the short-term variable component will be reduced to zero for the Chief Executive Officer and will be reduced by 50% for other Executive Directors.

1. If Group Net Profit is positive, the target value may be reduced based on the extent to which EBIT Italy deviates from the corporate budget value, subject to the following scale:

56 For this calculation, pro-forma EBIT was used net of the components of the variable incentive systems based on the profitability parameter

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