Banca IFIS S p A : Report on Remuneration Policy and Remuneration Paid - 2024

1

Banca Ifis | Report on Remuneration Policy and Remuneration Paid

-

Report on Remuneration Policy and Remuneration Paid 2024

2024

Letter from the Chairman to Shareholders

Dear Shareholders,

pursuant to Article 123-ter of Italian Legislative Decree No. 58 of 24 February 1998 (TUF [Italian Consolidated Finance Act], hereafter "TUF"), you are called to decide for or against Section I of this report.

With this report, Banca Ifis S.p.A.'s Board of Directors aims to comply with the requirements of Article 123-ter of TUF, banking industry regulations and the corporate governance rules contained in the Corporate Governance

Code, as specified below.

In particular, in light of the opportunity provided by Appendix 3A, Template No. 7-bis of the "Issuers' Regulation", to comply, in a single document, with the requirements of Article 123-ter of the TUF and with the Bank of Italy's Supervisory Provisions on remuneration, this report includes additional information, in aggregate form, on so-called "Risk Takers" not included within the scope of the above article of the TUF.

Detailed information is also supplied regarding the contents of the "Information Document on Remuneration Plans based on Financial Instruments" (pursuant to Article 114-bis of the TUF and Article 84-bis of Consob's [Italian Financial Market Regulatory Authority] Issuers' Regulation). The Report on Remuneration Policy and Remuneration Paid and the Information Document on Remuneration Plans based on Financial Instruments are available at:http://www.bancaIfis.it/Corporate-Governance/Shareholders' Meeting.

Information on the requirements of reporting to the public pursuant to the Supervisory Provisions for banks - Bank of Italy Circular No. 285 of 17 December 2013 - on corporate Governance, can be found in the Report on corporate governance and shareholding structures which can be found athttp://www.bancaifis.it/Corporate-Governance/Corporate-Documents

Ernesto Furstenberg Fassio

Chairman of Banca Ifis

CONTENTS

1. Background ....................................................................................................................................... 7

1.1. Applicable provisions ................................................................................................................. 7

1.2. Report structure ......................................................................................................................... 8

SECTION I - Remuneration and incentive policies .................................................................................... 9

1.Principles and purposes of the remuneration and incentive policies and gender neutrality .................... 9

2.Highlights of the 2024 Remuneration Policy ...................................................................................... 12

3.Bodies and subjects involved in the preparation, approval and possible revision of the remuneration

policy and responsible for its correct implementation ........................................................................... 13

3.1 The Shareholders' Meeting ............................................................................................................. 14

3,2 The Board of Directors ................................................................................................................... 14

3.3 The Remuneration Committee ........................................................................................................ 16

3.4. The Sustainability Committee ........................................................................................................ 18

3.5 The Chief Executive Officer ............................................................................................................ 19

3.6. The General Management ............................................................................................................. 20

3.7. Departments involved in the process of defining remuneration policies .......................................... 20

4.Remuneration of the members of the Board of Directors and the Board of Statutory Auditors .............. 21

4.1 Remuneration of the Directors and Auditors of the Parent Company ................................................ 21

4.2 Remuneration of the Directors and Auditors of the Subsidiaries ....................................................... 22

5.Recipients of Remuneration and Incentive Policies and Policy governing the identification process of the

identified staff .................................................................................................................................... 22

6.Remuneration structure .................................................................................................................... 23

7.Ratio of variable remuneration to fixed remuneration ......................................................................... 25

8.Variable remuneration: access gates ................................................................................................ 26

9.Variable remuneration: ex post correction mechanisms ..................................................................... 27

9.1. malus clauses .............................................................................................................................. 27

9.2 Claw back clauses ......................................................................................................................... 29

9.3 Prohibition of hedging strategy ....................................................................................................... 30

10. Methods of payment of variable remuneration ........................................................................... 30

• 11. INCENTIVE SYSTEM ................................................................................................................. 31

• 11.1. Short-term incentive systems .................................................................................................... 31

• 11.2. In particular: ESG objectives ...................................................................................................... 34

• 11.3. Medium- to long-term incentive schemes ................................................................................... 36

• 12. Remuneration of the Parent Company's CEO .............................................................................. 36

• 12.1 Short-term incentive scheme for the Parent Company's CEO .......................................................... 36

• 13. Short-term variable remuneration of Co-General Managers ......................................................... 37

• 14. Variable remuneration of Heads of Control functions ................................................................. 39

• 15. Short-term variable remuneration of other staff, including the identified staff ............................. 40

• 16. Short-term variable remuneration for sales staff ........................................................................ 40

• 17. Implementation methods for the Bank of Italy Provisions on transparency of the banking and

financial transactions and services - the Group's sales network ............................................................ 41

18. Remuneration of Financial Agents ................................................................................................. 42

19. Remuneration of non-employee contract workers .......................................................................... 43

20. Treatment for termination of office or of employment ..................................................................... 43

20.1 Treatment for termination of office or of employment for the identified staff . ................................ 43

20.2. Treatment for termination of office or of employment for personnel that are not identified staff .... 45

21. Implementation of Policies in Subsidiaries ................................................................................ 46

22. Exemptions .............................................................................................................................. 46

SECTION II .......................................................................................................................................... 47

Part One .............................................................................................................................................. 47

1.Implementation and Implementation of Section I of the Remuneration Policies 2023 during FY 2023...47

2. Remuneration of the members of the Board of Directors (also for participation in board Committees) and

of the Statutory Auditors, as well as of the members of the Supervisory Body ........................................ 49

3.Remuneration of the CEO .................................................................................................................. 50

4.Remuneration of the Co-General Managers ....................................................................................... 54

Co-General Manager - Chief Operating Officer .............................................................................. 55

The FY 2023 Short-Term Incentive Plan. ........................................................................................ 56

6. Opening access gates to variable remuneration for all staff and verification of malus/claw back

conditions ........................................................................................................................................... 59

7. Allocation of indemnities and/or other benefits for termination of office or termination of employment

during the financial year ...................................................................................................................... 59 8.Comparison information between the annual change in the total remuneration of the members of the Board of Directors and Controllers, the company's results and the average gross annual remuneration of

employees .......................................................................................................................................... 60

Section II ............................................................................................................................................. 62

Part two: fees paid in 2023 .................................................................................................................. 62

Table 1: remuneration paid to members of the administration and control bodies, general managers and

other key managers (figures in thousand Euro) ..................................................................................... 62

Table 2: Stock options assigned to members of the administration bodies, general managers and other key

managers ............................................................................................................................................ 65

TABLE 3A: Incentive plans based on financial instruments, other than stock options, for members of the

administration bodies, general managers and other key managers ........................................................ 66

TABLE 3B: monetary incentive plans for members of the management body, general managers and other

key managers ...................................................................................................................................... 67

Schedule of shareholdings of directors, auditors, the general manager and other key managers ............. 68

Table 1: equity investments of the members of the administrative and control bodies and general managers

68

Table 2: holdings of other key managers .............................................................................................. 68

Policy relating to the identified staff identification process ................................................................... 82

Report on Remuneration Policy and

Remuneration Paid 2024

1.Background

1.1. Applicable Provisions

The Remuneration Report (hereinafter the "Report") was prepared for the Banca Ifis Group (the "Group") in accordance with:

• • article 123 ter of the TUF, rubric "Report on Remuneration Policy and Remuneration Paid";

• • article 114-bis of the TUF, entitled "Disclosure of information to the market on awards of financial instruments to corporate officers, employees or contractors";

• • Consob Regulation No. 11971/1999 as updated with the amendments made by resolution No. 21623 of 10 December 2020 (hereinafter also referred to as the Issuers' Regulation), with particular reference to articles 84-quater, entitled "Report on remuneration", and 84-bis, entitled "Information on the allocation of financial instruments to corporate officers, employees or collaborators", as well as Annex 3A, Schedule No. 7 bis "Report on Remuneration Policy and Remuneration Paid", of the Issuers' Regulation and Schedule No. 7 "Information document forming the subject of the illustrative report of the administrative body for the shareholders' meeting called to resolve on remuneration plans based on financial instruments";

• • the Provisions on "Remuneration and incentive policies and practices" currently in force, issued by the Bank of Italy and contained in Circular No. 285 of 17 December 2013, as in force over time (hereinafter, the "Supervisory Provisions");

• • the Bank of Italy - Correctness of relations between intermediaries and customers, published by the Bank of Italy with Provision of 19 March 2019 in implementation of the European Banking Authority's Guidelines on remuneration policies and practices for personnel responsible for offering banking products and third-party sales network personnel;

• • the relevant European legislation and, in particular:

  • o Delegated Regulation (EU) No. 923 of 25 March 2021, supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards setting out the criteria to define managerial responsibility, control functions, material business units and a significant impact on a material business unit's risk profile (the "Identified Staff" or "Risk Takers");

  • o Decision (EU) 2022/368 of the European Central Bank of 18 February 2022 on the procedure for excluding staff members from the presumption of having a material impact on the risk profile of a supervised credit institution;

  • o the Guidelines on Remuneration Policies and Practices published by the EBA on 2 July 2021, pursuant to Directive 2013/36/EU.

The principles and recommendations contained in the "Corporate Governance Code" regarding remuneration were also taken into account (art. 5 of the Corporate Governance Code).

The provisions of the November 2020 ECB documents are also considered in the ESG ("Guidance on Climate and Environmental Risks. Supervisory Expectations for Risk Management and Disclosure")and June 2021 EBA documents ("EBA Report on management and supervision of ESG risks for credit institutions and investment firms" on management and supervision of environmental, social and governance risks of credit institutions) were also taken into account, that require the inclusion of ESG parameters in staff remuneration and incentive mechanisms, as well as the Bank of Italy's "Supervisory Expectations on Climate and Environmental Risks" of April 2022 and the "Action Planson Integrating Climate and Environmental Risks into LSI Business Processes: Key Evidence and BestPractices"of December 2023.

1.2. Report structure

Based on the current provisions, as mentioned above, this Report is divided into the following sections:

• • Section I: aimed at illustrating the Group's remuneration policy for the General Management, general managers and executives with strategic responsibilities and, without prejudice to the provisions of Article 2402 of the Italian Civil Code for the members of the supervisory bodies, as well as for "Risk Takers" and other staff not falling within the scope of Article 123-ter of the TUF, and the procedures used to adopt and implement this policy; this section describes the policy envisaged for FY 2024;

• • Section II: structured into two parts:

  • o the first is aimed at showing each remuneration item with name for the members of the management and control bodies, the general management and, in aggregate form, for key managers, as well as for "Risk Takers" not included within the scope of Article 123-ter of the TUF (in addition to the illustration of how Banca Ifis took into account the vote expressed in 2023 on Section II of the Report on Remuneration Policy and Remuneration Paid in 2022);

  • o in the second part there is an analytical report, in tabular form, as indicated in Annex 3, Template No. 7 bis of the Issuers' Regulation, of the compensation paid during FY 2023 or related to it, for any reason and in any form, by the company and by subsidiaries or associates; the additional information required pursuant to Article 450 of Regulation (EU) No. 575 of 26 June 2013, and in compliance with the models and instructions identified in the Implementing Regulation (EU) No. 637 of 15 March 2021, is also given in tabular form for Banca Ifis and for the other companies of the Group.

For incentive plans based on financial instruments, detailed information is contained in the Information Document on Remuneration Plans based on Financial Instruments.

SECTION I - Remuneration and incentive policies

1.

Principles and purposes of the remuneration and incentive policies and gender neutrality

The Parent Company, in the exercise of its management and coordination powers, defines this Group remuneration and incentive policy in line with the characteristics of the Group and of each subsidiary and in compliance with the provisions in force.

The remuneration policy shall be in effect for one year.

This policy is defined by the Parent Company with the aim of aligning the conduct of management and staff with the interests of all stakeholders, directing their action towards the achievement of sustainable medium-to-long term objectives - including sustainable finance objectives that take into account, inter alia, environmental, social and governance (ESG) factors - within the framework of a prudent assumption of current and prospective risks, as well as helping to attract, motivate and retain people with the professional qualities required to profitably pursue in accordance with corporate values and according to a policy of prudent risk management, including strategies for the monitoring and management of non-performing loans (in line with the provisions of the prudential control process), the short and/or medium/long-term objectives correlated with the Group's strategic objectives, thereby contributing to the achievement of results aimed at strengthening the Company's operational, economic and financial solidity in the long term and safeguarding the sustainability of the Banca Ifis Group.

The remuneration and incentive policy was defined taking into account the remuneration and working conditions of its employees. And so, among other things and in particular:

• • the Bank, in defining the remuneration of all employees, not only respects the remuneration parameters set out in the relevant National Collective Bargaining Agreement but also applies the improved conditions set out in the second-level collective bargaining agreement in force over time;

• • the achievement of ESG objectives adopted by the Bank, and reflected in the annual incentive scheme (see below par. 11.2), include parameters concerning the improvement of the working conditions of the entire workforce (e.g. maintaining gender equality)

The policy is inspired, in particular, by the principles set out below:

• • promote sound and effective risk management by not encouraging risk taking above the tolerated level of risk;

• • promote the competitiveness and good governance of the Group;

• • attract and retain in the company individuals with professionalism and skills suitable for the Group's needs, especially when they play important roles within the company organisation;

• • encourage compliance with all legal and regulatory provisions, as well as transparency and correctness in relations with customers, discouraging any violation and/or unfair commercial practice;

• • make corporate objectives consistent with the Group's sustainable growth objectives;

• • seek the best alignment between the interests of different stakeholders;

• • focus on risk containment policies;

• • avoid altering or undermining the risk alignment effects inherent in remuneration arrangements;

• • avoid creating situations of conflict of interest.

Focus: gender neutrality

The Bank, which has always been attentive to issues of diversity and inclusion, promotes networks and initiatives for training and empowerment of women and supports flexibility in order to combine the needs of work and family.

Banca Ifis's commitment to gender equality is expressed in an increasingly inclusive culture, which is reflected in work-life balance policies and welfare to support family needs, in particular to support maternity, parental leave and other situations of family difficulties, thanks to the activation of the increasing adoption of flexible working methods.

In this context, since December 2021, Banca Ifis has been the first Italian bank to be certified for gender equality by the Winning Women Institute, a company committed to spreading the principle of gender equality within the world of work. According to the Dynamic Model Gender Rating, which is based on the achievement of quantitative and qualitative KPIs, the levers subject to assessment are: opportunities for growth within the company, pay equity and HR processes, flexibility for maternity protection.

On 5 December 2023, all the companies of the Banca Ifis Group (with the exception of Revalea S.p.A., acquired by Ifis Npl Investing S.p.A. on 31 October 2023, and the foreign subsidiaries not falling within the regulatory scope of reference) achieved UNI/PdR 125:2022 certification, recognising that all the companies concerned have and implement a gender equality quality management system compliant with the standard. Remuneration policies are gender-neutral and contribute to the pursuit of complete equality in the economic and regulatory treatment of staff. They promote an equal level of remuneration for staff, including in terms of the conditions for its recognition and payment, for equal work.

The Bank has prepared a Policy to promote diversity and inclusiveness that aims to outline the method by which the Group guarantees that all employees (and collaborators) are treated with no direct or indirect distinction or preference, based on age, gender, sexual orientation, marital status, religion, language, ethnic or national origins, physical or mental disabilities, state of pregnancy, maternity or paternity, including through adoption, personal beliefs, political opinions, affiliation or trade union activities.

In accordance with the values and principles pursued by the Banca Ifis Group, the aforementioned Policy, complete with the Management System and Strategic Plan for Gender Equality, identifies the thematic areas of intervention, which make it possible to frame in the most complete way all the aspects linked to the theme of inclusiveness and embrace the complexity that characterises the Group's project on Gender Diversity and Inclusion: attraction and retention, reward and promotions, development, training, welfare policies, culture and change management.

10