Recordati : Directors' Report on item 3 on the agenda – Report on the remuneration policy and the remuneration paid

This is an English courtesy translation of the original documentation prepared in Italian language

DIRECTORS' REPORTS ON THE PROPOSALS ON THE AGENDA OF THE ORDINARY GENERAL MEETINGS OF

THE SHAREHOLDERS

(29TH APRIL 2022 SINGLE CALL)

Report on item 3 on the agenda of the Ordinary Shareholders' Meeting:

Report on the remuneration policy and the remuneration paid pursuant to article 123-ter, paragraphs 3- bis and 6, of Legislative Decree no. 58 of 24th February 1998:

• a) binding resolution on the first section regarding the remuneration policy;

• b) non-binding resolution on the second section on the remuneration paid for 2021.

To Our Shareholders,

In compliance with article 123-ter of Legislative Decree No. 58/1998 (hereinafter TUF) and article 84- quater of the Regulation issued by Consob with resolution No. 11971 of 14th May 1999 and subsequent amendments (hereinafter the "Issuer's Regulations"), the Report on the remuneration policy and the remuration paid (hereinafter the "Remuneration Report") is given below, approved by the Board of Directors on 17th March 2022, on the proposal of the Remuneration and Nominations Committee.

The Shareholders are invited to adopt:

• a) a binding vote regarding the Remuneration Policy included in Section I of the Remuneration Report pursuant to art. 123-ter, paragraph 3-ter, of Legislative Decree No. 58/1998;

• b) a non-binding vote on the section on the remuneration paid for 2021 (Section II of the Remuneration Report), as provided for by art. 123-ter, paragraph 6, of Legislative Decree No. 58/1998.

The result of the vote will be disclosed to the public in accordance with Art. 125-quater, paragraph 2 of Legislative Decree No. 58/1998.

The Remuneration Report may also be consulted on the company website atwww.recordati.it in the Corporate Governance Section.

*

Milan, 17th March 2022

For the Board of Directors

The Chief Executive Officer

Robert Koremans

1

Report on the Remuneration Policy and the remuneration paid

in accordance with articles 123-ter of the Italian Consolidated Law on Finance and 84-quater of the

Consob Issuers' Regulations

Approved by the Board of Directors on 17th March 2022

Issuer: Recordati Industria Chimica e Farmaceutica S.p.A.

Website:www.recordati.it

Financial year to which the Report refers: 2021

Contents

Letter from the Chair of the Committee for the Remuneration and the Nominations ..................................... 5

Introduction ..................................................................................................................................................... 7

Executive Summary ......................................................................................................................................... 9

2022 New Features ........................................................................................................................................ 12

Section I: 2022 Remuneration Policy Report ........................................................................................ 13 1.

Engagement and remuneration policies ............................................................................................ 14
1.1	Voting results and investor feedback ............................................................................................. 14
1.2	Engagement activities carried out by Recordati .......................................................................... 15
1.3	Pay mix of the Chief Executive Officer and Key Management Personnel ............................... 15
Governance of the remuneration process ......................................................................................... 16
2.1	Bodies and persons involved .......................................................................................................... 16
2.1.1	Shareholders' Meeting ............................................................................................................................ 16
2.1.2	Board of Directors ................................................................................................................................... 16
2.1.3	Remuneration and Nominations Committee .......................................................................................... 18
2.1.4	Other intra-board Committees ................................................................................................................ 20
2.2	Policy approval process ................................................................................................................... 20
2.3	Independent experts and other persons involved ........................................................................ 21
2.4	Derogation procedure in exceptional circumstances .................................................................. 21
The Company's Remuneration Policy ................................................................................................ 22
Purposes of the Policy and its link with corporate strategy ........................................................ 22
Recordati's Sustainability Plan ................................................................................................................. 24

3.

2.

3.1

3.1.1

3.1.2 Compensation and working conditions of employees ................................................................................ 25

3.2	Principles and criteria underlying the Policy ................................................................................. 25
3.3	Implementation of the 2022 Remuneration Policy ....................................................................... 25
3.4	Remuneration of the Board of Directors and of the Board of Statutory Auditors .................... 26
3.4.1	Remuneration of the Board of Directors ................................................................................................. 26
3.4.2	Remuneration of the Board of Statutory Auditors .................................................................................. 26
3.5	Remuneration of the Chair of the Board of Directors .................................................................. 27
3.6	Remuneration of the Chief Executive Officer and of Executive Directors ................................ 27
3.6.1	Market references and peer groups ........................................................................................................ 28
3.6.2	Fixed component of remuneration ......................................................................................................... 29
3.6.3	Short-term variable component (MBO) .................................................................................................. 30
3.6.4	Long-term variable component (LTI) ....................................................................................................... 34
3.7	Remuneration of Key Management Personnel ............................................................................ 35
3.7.1	Fixed component of remuneration ......................................................................................................... 36
3.7.2	Short-term variable component (MBO) .................................................................................................. 36
3.7.3	Long-term variable component (LTI) ....................................................................................................... 37
3.8	Further information on remuneration ............................................................................................. 37
3.8.1	Transaction Bonus and Integration Bonus .............................................................................................. 37
3.8.2	Non-monetary benefits ........................................................................................................................... 38
3.8.3	Severance indemnity ............................................................................................................................... 38
3.8.4	Additional insurance, social security and pension coverage ................................................................... 39

Section II: Report on the remuneration paid for 2021 ......................................................................... 40

Introduction ................................................................................................................................................... 41

Part I .............................................................................................................................................................. 42

• 1. Results of votes ..................................................................................................................................... 42

• 2. Activities of the Remuneration and Nominations Committee ......................................................... 43

• 3. Fixed remuneration ............................................................................................................................... 44

• 4. Variable remuneration .......................................................................................................................... 46

• 5. Remuneration for participation in board committees and for members of the Board of Statutory

Auditors ........................................................................................................................................................... 49

6. Non-monetary benefits ......................................................................................................................... 50

7. Information on the consequences of termination of employment or management relationship

and on the existence of special agreements with Directors and Key Management Personnel ......... 50

8. Annual variations in remuneration paid and corporate performance ........................................... 50

Part II ............................................................................................................................................................. 52

Table 1 - Remuneration paid to Directors, Statutory Auditors, General Managers and other Key

Management Personnel ............................................................................................................................... 52

Table 2 - Stock Options assigned to Directors, General Managers and other Key Management

Personnel members ...................................................................................................................................... 57

Table 3B - Monetary incentive plans for Directors, General Managers and other Key Management

Personnel ........................................................................................................................................................ 61

Table 4 - Shares held by Directors, Statutory Auditors, General Managers and other Key

3RECORDATI S.P.A. | 2021 REPORT ON THE REMUNERATION POLICY AND THE REMUNERATION PAID

Management Personnel ............................................................................................................................... 62