Cellnex Telecom S A : La Sociedad remite el Informe Anual sobre remuneraciones de los consejeros del Ejercicio 2020 1MB

ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF LISTED

COMPANIES

ISSUER IDENTIFICATION

YEAR-END DATE

31/12/2020

TAX IDENTIFICATION CODE (C.I.F.) A64907306

Company Name: CELLNEX TELECOM, S.A.

Registered Office:

Calle Juan Esplandiú 11-13, 28007 Madrid

ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF LISTED

COMPANIESA

REMUNERATION POLICY OF THE COMPANY FOR THE CURRENT FINANCIAL YEAR

A.1

Explain the current director remuneration policy applicable to the current fiscal year. To the extent relevant, certain information may be included by reference to the remuneration policy approved by the General Shareholders' Meeting , provided that the incorporation is clear, specific and concrete.

A description should be given of the specific determinations for the current fiscal year, both of directors' remuneration for their status as such and for the performance of executive duties, which the Board has carried out pursuant to the contracts signed with executive directors and to the remuneration policy approved by the General Shareholders' Meeting.

In any case, at least the following aspects must be reported:

• − Description of the procedures and company's bodies involved in determining and approving the remuneration policy and its conditions.

• − Indicate and, where appropriate, explain whether comparable companies have been taken into account in establishing the company's remuneration policy.

• − Information on whether any external advisor has participated and, if so, the identity of the advisor.

1. Remuneration Policy applicable in 2021:

At the date of preparation of this Report, the current Cellnex's Directors Remuneration Policy is the one approved by the General Shareholders' Meeting on 9 May 2019, which will be in force during fiscal years 2019, 2020 and 2021.

However, the Board of Directors plans to submit a new Directors Remuneration Policy (hereinafter the "Remuneration Policy" or the "Policy") for approval at the General Shareholders' Meeting to be held at the end of March 2021, which, while maintaining the basic lines applied in previous years, introduces some new features.

Most of these new features are related to the adaptation of the Remuneration Policy to the new requirements set forth in Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholders' engagement (hereinafter the "Directive"), which is expected to be transposed into our legal system during the coming months.

From a qualitative point of view, the Policy submitted for approval aims to:

•  Establish as clearly as possible the principles on which it is based, setting out in a transparent manner those activities that are sound remuneration practice:

  • o Balance of different components of remuneration.

  • o Consideration of multiple metrics.

  • o Variable incentives with multi-year periods.

  • o Obligation to permanently hold shares of the Company.

  • o Risk mitigation measures.

  • o Support from external advisors.

•  To state in an equally clear manner the practices to be avoided:

  • o Salary increases or variable remuneration guaranteed a priori.

  • o Use of financial elements that allow speculation on the value of the shares received.

  • o Remuneration of non-executive directors linked to the Company's results, or to individual performance.

•  Include both internal and external factors in its definition:

  • o Internal: results of recent years, creation of shareholder value, strategic priorities in the short and long term, growing importance of ESG criteria, increased transparency requirements, internal equity with remuneration conditions for all employees.

  • o External: changes in the macroeconomic environment, the latest regulatory developments applicable to listed companies, practices of comparable companies and market trends in general, recommendations on good corporate governance at national and international levels, as well as recommendations received in the process of engaging with institutional shareholders.

In addition to the foregoing, from a quantitative point of view the new Remuneration Policy proposes to introduce the following new features:

•  The total remuneration of the Chief Executive Officer is revised to: (i) align it with the results achieved in recent years, in particular the creation of value for our shareholders; (ii) promote the achievement of our strategic priorities; (iii) ensure that it is competitive and allows us to retain key talent.

  As a result, the following has been proposed for fiscal year 2021:

  - An increase in fixed remuneration from €1,000,000 to €1,300,000.

  - Maintenance of the current percentage of annual variable remuneration (100% of fixed remuneration).

-An increase in long-term variable remuneration such that, for the 2021-2023 LTI (long-term incentive), the target amount is set at 183% of fixed remuneration (vs. the 150% of the 2020-2022 LTI) and the maximum incentive is limited to 238% of the fixed remuneration (as of the grant date). It is worth mentioning that the maximum incentive can increase up to 238% of the fixed remuneration, but it can also decrease up to 141%, due to the application of a correction factor (explained later); or even be 0, if the accrual and settlement conditions are not met.

Thus, the weight of variable remuneration in a scenario of maximum fulfilment of objectives is more than 75% of total remuneration.

•  Annual variable remuneration and long-term incentives are linked not only to corporate governance objectives, but also to environmental, social and governance objectives (ESG), linked to our sustainability strategy.

•  The period of application of the malus and clawback clauses is increased from 6 to 12 months in the case of annual variable remuneration. For the long-term incentive, the period of application of this clause is 36 months.

•  It is established that the permanent stock ownership requirement is an element of the Remuneration Policy, independent of the LTI programmes in force at any given time. As of 31 December 2020 the Chief Executive Officer meets (and significantly exceeds) this requirement.

•  The amount of fixed remuneration for membership or chairmanship of the Board of Directors and its Committees (which was increased in 2020 from €100,000 to €115,000 for the Chief Executive Officer) is maintained for 2021. In addition, the limit of the maximum total annual remuneration to be paid to all the directors in their capacity as such is increased by € 200,000, to € 2,200,000. In this regard, it is worth noting the high number of Board and Committee meetings, which was much higher than expected (in 2020, 12 Board meetings were held, 8 meetings of the Audit and Control Committee, and 12 meetings of the Nominations and Remunerations Committee).

The term of this Remuneration Policy will cover the fiscal years 2021, 2022 and 2023.