Remuneration Report

REPORT ON THE REMUNERATION POLICY IN 2023 AND COMPENSATION PAID IN 2022

2 |

LETTER OF THE CHAIRMAN OF THE REMUNERATION AND NOMINATIONS COMMITTEE

Dear Shareholders,

as Chairman of the Remuneration and Nominations Committee, I am pleased to submit for your review the "Report on the Remuneration Policy in 2023 and Compensation Paid in 2022", prepared in compliance with current legislation and approved by the Board of Directors on March 8, 2023, which represents for Italmobiliare an important moment of open and transparent communication versus shareholders and other stakeholders about the Group's remuneration system.

2022 was another year marked by extraordinary and dramatic events. Faced with an increase in the cost of raw materials and energy as a result of these events, Italmobiliare has shown evidence of considerable resilience, managing to achieve a significant level of growth in the overall turnover of the portfolio companies, while limiting the decline in profit margins. Our strong point was a pro-active approach to risk management, financial planning, the introduction of strategic sustainability policies and initiatives and the activation of intra-group synergies. At the same time, Italmobiliare's development policy was not put on hold and new investments were made to ensure that the portfolio companies could keep growing and creating value.

The remuneration policy represents a key element for achieving results, guiding corporate conduct and helping to strengthen Italmobiliare's values. In carrying out its functions, the Committee has continued to oversee the process of policy definition, implementation and monitoring, which is designed to ensure alignment with constantly evolving regulatory provisions and with a sustainable strategy on the part of Group, facilitating the achievement of results in line with its sustainable mission.

The 2022 Remuneration Policy received broad consensus from the Shareholders' Meeting. This Report aims to pursue the objective of transparency and clarity in presenting the information in line with the path undertaken in recent years. As in the past, the 2023 Remuneration Policy has been established with the aim of responding to the expectations of the main shareholders and stakeholders, taking market best practices into consideration. In preparing this policy, we continued listening to and analysing the suggestions and indications received from all stakeholders, identifying any areas for improvement suggested by the main proxy advisors with whom we maintain an open and constructive dialogue.

The 2023 Remuneration Policy has some new elements. Given that 2022 saw the end of the 2020-2022 Phantom Stock Grant Plan with bonuses due to be paid in 2023, the Policy provides for the launch of a new Phantom Stock Grant Plan for the period 2023-25, subject to the approval of the Shareholders' Meeting. In order to strengthen Italmobiliare's commitment to sustainability, the new Plan includes ESG objectives, already envisaged in the annual incentive plan, identified in close coordination with the Sustainability Committee. Furthermore, an in-depth analysis of the incentive practices adopted by companies similar to Italmobiliare by sector, most of them unlisted, and the objective of focusing management more on creating value in their handling of the Company's individual shareholdings, led the Committee to propose the introduction of a medium-long term incentive, the Value Creation Sharing Incentive. Its aim is to share the value created by extraordinary transactions and the Report provides details of this plan.

As Chairman of the Remuneration and Nominations Committee, I renew the Company's commitment to ensure that its Policies contribute to the implementation and success of the programmes and strategic objectives pursued by the Group, in the hope that they will receive positive feedback from the Shareholders and Stakeholders. I will now pass on the baton to the next Remuneration and Nominations Committee, which will take office after the appointment of the new Board of Directors, as the current mandate is about to expire. Trusting that you will appreciate the important work that we have performed and that you will find the information useful and comprehensive, we submit for your attention the Group's "Report on the Remuneration Policy in 2023 and the Compensation paid in 2022". We hope that we will have your support during the Shareholders' Meeting.

4 |

Vittorio Bertazzoni Chairman of the Remuneration and Nominations Committee

INTRODUCTION

This Report on the Remuneration Policy and the Compensation Paid was approved by the Board of Directors of Italmobiliare on March 8, 2023, on the proposal of the Remuneration and Nominations Committee, and will be put to a binding vote on Section I and an advisory vote on Section II at the Shareholders' Meeting on April 27, 2023.

The Report is composed of two sections:

Section I – Report on the Remuneration Policy – which explains Italmobiliare's Remuneration Policy for 2023 with reference to the members of the Board of Directors, the Chief Executive Officer/Chief Operating Officer, the Key Management Personnel and the members of the Board of Statutory Auditors, indicating, in particular, the objectives pursued, guiding principles, any amendments with respect to the previous year, bodies involved and the procedures used to adopt and implement the Policy;
Section II – Report on Compensation Paid – which explains the compensation paid during the year ended December 31, 2022 by Italmobiliare S.p.A., its subsidiaries and associate companies, to the Directors, Key Management Personnel and members of the Board of Statutory Auditors; it provides an analytical report on the compensation paid to them during the year in implementation of the current Remuneration Policy (as approved by the Shareholders' Meeting on April 21, 2022).

The text of the Report is made available to the public at the registered office, on the authorised storage platform () and on the Company's website, no later than the twenty-first day prior to the date of the Shareholders' Meeting called to approve the 2022 financial statements and requested to vote on a binding resolution on Section I and a non-binding resolution on Section II of this Report, in accordance with governing regulations pursuant to art. 123-ter, paragraph 3-ter and 6 of the Consolidated Law on Finance.

SUMMARY

6 |

Purpose and principles of the Remuneration Policy and how it is linked to strategy

Italmobiliare's 2023 Remuneration Policy, defined in accordance with the Company's governance model and the recommendations made by the Corporate Governance Code to which the Company adheres, has the aim of ensuring the alignment of management's interests with the interests of shareholders and all its stakeholders. In this sense, it constitutes one of the fundamental tools for pursuing the sustainable success of the Italmobiliare Group, through the creation of long-term shared value, thereby contributing to the global challenges and, at the same time, protecting and strengthening its financial performance for the benefit of the shareholders and of all other stakeholders.

In fact, the Italmobiliare Group is inspired by and promotes values in its own sphere of activity and in that of the other Group companies that are consistent with the most advanced international governance practices. Among these, there is the United Nations Global Compact, the most important strategic initiative of corporate responsibility. The Italmobiliare Group adheres to it through a formal and substantial declaration of commitment to promote a healthy, inclusive and sustainable global economy, respectful of labour and human rights, able to safeguard the environment and actively involved in promoting integrity in every aspect of the business. To this end, Italmobiliare shares, supports and applies the Ten Fundamental Principles of the Global Compact in its sphere of influence and actively contributes to achieving the United Nations Sustainable Development Goals.

By establishing a direct relationship between pay and performance, the Remuneration Policy aims to attract, retain and motivate people with the professional qualities required to manage the Company in line with its Mission to play "an active and continuous role in the process of portfolio growth and enhancement by combining development, internationalisation and innovation with an effective governance and risk management model, and full ESG integration at all stages of investing".

The following table summarises the purposes and characteristics of the various components of remuneration envisaged by Italmobiliare's Policy; it also shows the levels of compensation resulting from application of the Policy for the 2020-2022 term of office. The 2023 Shareholders' Meeting will decide on the remuneration of the Directors pursuant to art. 2389, paragraph 1 for their 2023-2025 term of office. Subsequently, the new Board of Directors will determine the remuneration for the Directors holding particular offices in line with the criteria laid down in this Policy.

SECTION I – REPORT ON THE REMUNERATION POLICY 2023 | 7

The remuneration of the executive members of the Board of Directors for their 2023-2025 term of office will be determined after the Shareholders' Meeting.

8 |

SECTION I - REPORT ON THE REMUNERATION POLICY IN 2023

CHANGES	10
SHAREHOLDERS ENGAGEMENT RESULT OF THE 2022 VOTE ON SECTION I – REPORT ON THE REMUNERATION POLICY	10
GOVERNANCE AND PARTIES INVOLVED 1. Shareholders' Meeting 2. Board of Directors	11 11 12
3. Remuneration and Nominations Committee 4. Board of Statutory Auditors	13 15
PURPOSE AND PRINCIPLES OF THE REMUNERATION POLICY AND HOW IT IS LINKED TO ITALMOBILIARE'S STRATEGY	16
EMPLOYEES' REMUNERATION AND WORKING CONDITIONS	19 19
1. Pay Mix
MARKET PRACTICE	20
REMUNERATION OF THE BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS	21
REMUNERATION OF THE CHIEF EXECUTIVE OFFICER/CHIEF OPERATING OFFICER	22
1. Fixed Remuneration	23
2. Short-term variable remuneration (MBO)	23
3. Long-term variable remuneration	25
4. Value Creation Sharing Incentive 5. Benefits	27 27
REMUNERATION POLICY FOR KEY MANAGEMENT PERSONNEL	28
1. Fixed Remuneration	28
2. Short-term variable remuneration (MBO)	29
3. Long-term variable remuneration	30
4. Value Creation Sharing Incentive 5. Benefits	30 30
CLAWBACK	30
SEVERANCE INDEMNITY POLICY	31
SECTION II - REPORT ON COMPENSATION PAID IN 2022
PART I	32

Result of the 2022 vote on Section II – Report on Compensation Paid	32
Business results for 2022	32
Description of the compensation paid to Directors, Statutory Auditors and Key Management Personnel
Annual change in compensation and performance	37

PART II	39

Detailed tables 39

SECTION I - REPORT ON THE REMUNERATION POLICY IN 2023

CHANGES

10 |

The main changes to Italmobiliare's Remuneration Policy in 2023 include:

a strengthening of the link between incentive systems, strategic guidelines and Sustainability Plan with the inclusion of ESG indicators, already envisaged in the MBO System, also in the long-term incentive plan;
the introduction of a new long-term incentive plan (LTI) for the three-year period 2023-2025, substantially in line with the 2020-2022 Plan;
the introduction of a medium/long-term incentive system aimed at sharing the value created through extraordinary transactions (Value Creation Sharing Incentive), considering the remuneration practices of the sector in which Italmobiliare operates.

SHAREHOLDERS ENGAGEMENT RESULT OF THE 2022 VOTE ON SECTION I – REPORT ON THE REMUNERATION POLICY

Italmobiliare recognizes the great importance of constant dialogue and continuous interaction with the main recipients of the Remuneration Policy, aimed at guaranteeing continuous improvement and adoption of market best practices and the implementation of the main areas of improvement indicated by the Shareholders and the Proxy Advisors, as also emerges from the positive trend in the last 5 years.

For this reason, Italmobiliare devoted its attention during the year to understand and further elaborate the indications received at the last Shareholders' Meeting and took them into account in adopting the improvements included in this report. In particular, retaining and introducing a great level of transparency in relation to disclosure.

GOVERNANCE AND PARTIES INVOLVED

The definition of the Remuneration Policy involves multiple parties and corporate bodies, as envisaged by the Bylaws, current regulations and the governance model adopted by the Company. In particular, this involves the Remuneration and Nominations Committee, the Board of Directors and the Shareholders' Meeting. The Company's Human Resources Department actively supports the parties involved in the Policy definition.

THE PROCESS OF DEFINITION AND APPROVAL OF THE REMUNERATION POLICY

The Remuneration and Nominations Committee, the Chief Executive Officer/Chief Operating Officer and the Board of Directors are in charge of implementing the Policy.

The Board of Statutory Auditors monitors application of the Remuneration Policy over time.

1. Shareholders' Meeting

In relation to remuneration, the Shareholders' Meeting:

At the time of appointment and for the term of office, determines the compensation of the members of the Board of Directors and the Board of Statutory Auditors;
Resolves on financial instrument-based remuneration plans, on the proposal of the Board of Directors;
On approval of the annual financial statements, will vote for or against Section I of the Remuneration Report in a binding vote and on Section II in an advisory vote, pursuant to article 123-ter of the Consolidated Law on Finance, as amended by Legislative Decree 49 dated May 10, 2019.

2. Board of Directors

Italmobiliare's Board of Directors currently in office (2020-2022 mandate) is made up of 12 Directors. Their mandate expires on approval of the financial statements at December 31, 2022.

The composition of the Board currently in office for the 2020-2022 mandate is as follows:

Laura Zanetti(1)	Chairman
Livio Strazzera(1)	Deputy Chairman
Carlo Pesenti	Chief Executive Officer Chief Operating Officer
Vittorio Bertazzoni(2)	Independent director
Giorgio Bonomi
Mirja Cartia d'Asero(2)	Independent director
Valentina Casella(2)	Independent director
Marco Cipelletti(2)	Independent director
Elsa Fornero(2)	Independent director
Sebastiano Mazzoleni
Luca Minoli
Chiara Palmieri(2)	Independent director

(1) Independent director (pursuant to Legislative Decree 58, February 24, 1998).

(2) Independent director (pursuant to Legislative Decree 58, February 24, 1998 and the Corporate Governance Code).

With regard to remuneration, the Board of Directors:

Defines and approves the Policy, based on the proposal made by the Remuneration and Nominations Committee;
On the recommendation of the Remuneration and Nominations Committee, and after consulting with the Board of Statutory Auditors, determines the remuneration of Directors holding particular offices;
With the support of the Control and Risk Committee, appoints and dismisses the Head of the Internal Audit function, defining his/her remuneration in line with Company policies;
On the recommendation of the Remuneration and Nominations Committee, establishes the performance objectives linked to the variable component of the remuneration of Directors holding particular offices and Key Management Personnel;
Checks, also making use of information received from the Remuneration and Nominations Committee and the relevant company departments, achievement of the performance objectives to which the incentive plans and short-term variable remuneration are linked;
In accordance with the Policy, decides on any incentive plans, including those based on financial instruments, to submit to the Shareholders' Meeting for approval.

EXCEPTIONS TO THE ELEMENTS OF THE 2023 REMUNERATION POLICY

On the proposal of the Remuneration and Nominations Committee and in compliance with the Related Party Transactions Procedure, the Board of Directors may, in exceptional circumstances, that could compromise pursuit of the Company's long-term interests or its ability to remain on the market, as provided for by article 123-ter, paragraph 3-bis of the CLF, and by art. 84-quater of the Issuers' Regulation, temporarily waive the remuneration policy if the requested waiver is consistent with the pursuit of the long-term interests and sustainability of the Company as a whole or to ensure its ability to remain on the market.

The elements of the remuneration policy to which exceptions may apply are the following:

Fixed remuneration;
Short-term variable remuneration;
Long-term variable remuneration;
Value Creation Sharing Incentive;
Severance indemnity policy.

3. Remuneration and Nominations Committee

The Remuneration and Nominations Committee comprises only Directors classed as independent according to the requirements laid down by the Consolidated Law on Finance and the Corporate Governance Code, with suitable knowledge and experience in matters of finance or remuneration policies.

The Remuneration and Nominations Committee has the following composition at the date of this Report:

The Board of Statutory Auditors and Human Resources Director are also regularly invited to attend the Committee meetings. No Director is present at the part of meetings when their remuneration is discussed. Minutes are taken of the meetings and the Chairman informs the Board of the meetings held at the first opportunity. Member Oo

Members of the Remuneration and Nominations Committee

The Remuneration and Nominations Committee has the aim of guaranteeing that the remuneration policies established for Directors, including those who have been delegated powers or appointed to particular positions, and for Key Management Personnel are formulated by a body that does not have any interest in them, in compliance with recommendation 26 of the Corporate Governance Code, to which the Company adheres. The Committee only plays an advisory role; the power to determine the remuneration of Executive Directors and Directors holding particular offices lies with the Board of Directors, which consults with the Board of Statutory Auditors in accordance with art. 2389, third subsection of the Italian Civil Code.

Tasks of the Remuneration and Nominations Committee (in the remuneration area)

It makes proposals to the Board on the definition of the remuneration policy; it periodically assesses the overall adequacy and consistency of the remuneration policy, monitoring its application in practice.

It assesses proposals to introduce short- and long-term incentive systems, cash- and share-based, to be submitted for the approval of the Board of Directors.

It submits proposals to the Board of Directors, or expresses opinions, on the remuneration of Executive Directors and other Directors holding particular offices, as well as on setting performance objectives.

It proposes performance objectives to the Board related to the variable component of the remuneration of Executive Directors, Directors holding particular offices and Key Management Personnel.

It checks, also making use of information received from the relevant company departments, achievement of the performance objectives to which the long-term incentive plans and variable remuneration are linked.

It expresses opinions on the indemnities to be paid to key management personnel in the event of their early termination; it evaluates the possible effects of termination on the rights assigned as part of incentive plans based on financial instruments.

It proposes to the Board temporary exceptions to the Remuneration Policy in the presence of exceptional circumstances and in compliance with the Related Party Transactions Procedure.

In going about its duties, the Committee can use corporate departments and resources as necessary each time to ensure the best possible fulfilment of its tasks, or independent third-party experts. The duties of the Committee and how it is meant to function are governed by the Regulation of the Board of Directors adopted in 2021, which can be found in the "Governance/Documents and Procedures" section of the Company's website.

The Committee met three times during 2022 with the participation of all of its members and those of the Board of Statutory Auditors; meetings lasted approximately one hour on average. In two out of three meetings it performed the functions of both the Nominations Committee and the Remuneration Committee; in one it only performed the functions of the Remuneration Committee.

The Committee was assisted by Willis Tower Watson, an independent consultancy, in preparing the remuneration policy for 2022 and 2023 and in the definition of the new long-term incentive plan for the period 2023-2025 to be submitted to the Shareholders' Meeting, in addition to the introduction of a new medium-long term incentive system, the Value Creation Sharing Incentive, aimed at sharing the value created by extraordinary transactions.

In 2022, the Committee carried out the following activities concerning remuneration: it examined the Company's report on the remuneration policy in 2022 and compensation paid in 2021 to be submitted to the Board of Directors and subsequently to the Shareholders' Meeting; it verified achievement of the performance objectives for the purpose of determining the short-term variable remuneration to be paid to the Chief Executive Officer-Chief Operating Officer and to key management personnel (MBO 2021); it made a proposal to the Board of Directors for the variable remuneration of the Chief Executive Officer/Chief Operating Officer and key management personnel for 2022 (MBO 2022); launched in-depth activities aimed at preparing the Company's new long-term incentive plan and introducing the new medium-long term variable system to support extraordinary transactions and definition of the remuneration policy for 2023.

SECTION I – REPORT ON THE REMUNERATION POLICY 2023 | 15

As regards its functions as the Nominations Committee, in 2022 the Committee examined the results of the 2021 self-assessment process, which were then submitted to the Board of Directors; reviewed the questionnaire to be used for the 2022 self-assessment process, after agreeing not to use an independent consultant; started the preparatory preliminary investigations for the formulation of the opinion on the quantitative and qualitative composition of the Board of Directors, in view of the renewal of the corporate bodies.

In 2023, up to the date of approval of the Report, the Committee has met twice, performing the functions of both the Nominations Committee and the Remuneration Committee at both meetings. Among its activities involving remuneration, it has examined this Company's report on the remuneration policy for 2023 and on the compensation paid in 2022 to be submitted to the Board of Directors and subsequently to the Shareholders' Meeting; checked whether the performance objectives had been achieved in order to determine the short-term variable remuneration to be assigned to the Chief Executive Officer/Chief Operating Officer and key management personnel (MBO 2022) and the long-term variable remuneration (Phantom Stock Grant Italmobiliare 2020-2022); shared the structure of the MBO 2023 of the Chief Executive Officer/Chief Operating Officer and of key management personnel; examined the structure and the disclosure document of the new long-term incentive plan (Phantom Stock Grant Italmobiliare 2023-2025), and the proposed introduction of a new medium-long term variable component, the Value Creation Sharing Incentive; examined a benchmark analysis, which was then submitted to the Board of Directors, regarding the remuneration of directors and statutory auditors, for use in the preparation of a proposal for the Shareholders' Meeting.

Furthermore, in its capacity as Nominations Committee, it examined the results of the 2022 self-assessment process, which were then submitted to the Board of Directors; it also made a proposal regarding the guidance opinion on the qualitative and quantitative composition of the newly appointed Board of Directors, which was subsequently approved by the Board.

Italmobiliare's 2023 Remuneration Policy was approved by the Board of Directors upon proposal by the Remuneration and Nominations Committee, in the meeting held on March 8, 2023, concurrently with its approval of this Report.

4. Board of Statutory Auditors

With regard to remuneration, the Board of Statutory Auditors expresses opinions required by governing regulations in reference to, in particular, the remuneration of Directors holding particular offices, pursuant to Art. 2389 of the Italian Civil Code, verifying their consistency with the Company's Remuneration Policy. The Board of Statutory Auditors regularly attends the meetings of the Remuneration and Nominations Committee.

PURPOSE AND PRINCIPLES OF THE REMUNERATION POLICY AND HOW IT IS LINKED TO ITALMOBILIARE'S STRATEGY

Italmobiliare's 2023 Remuneration Policy, explained in this Report, is defined in accordance with the Company's governance model and the recommendations made by the Corporate Governance Code, to which the Company adheres, and has the aim of ensuring the alignment of management's interests with the interests of shareholders and all its stakeholders.

The Remuneration Policy is also defined taking into account the best market practices adopted by listed companies and a continuous monitoring and control of risk. To this end, each of the components of the remuneration offered to the Company's management team responds to a precise purpose in pursuit of this strategic vision and, thanks to a suitable balance of fixed and variable components, helps structure a compensation package that guarantees effective alignment between management's remuneration and shareholders' interests, expressed first and foremost by the proportional nature of the variable components accrued and the results achieved in the short and long term.

In its long history as a holding company of diversified interests in the industrial and financial sector, Italmobiliare was one of the first in Italy to adopt a modern approach to sustainability. Already in the 1990s it had launched ambitious sustainability programmes at its main industrial subsidiaries, fully integrated into the strategic development priorities and coordinated by dedicated functions. Thanks to this experience, the Company has developed a full-time commitment to best practices, from principles to policies, from processes to products, from local and global initiatives to reporting tools.

Today, through the flow of investments and disposals and the management over time of the investments held in its portfolio, Italmobiliare Investment Holding wants to achieve sustainable success for the entire Group, assigning priorities and mobilizing financial resources in a targeted and selective manner. The aim is to contribute to global challenges and, at the same time, protect and strengthen financial performance for the benefit of the shareholders and all other stakeholders. The sustainability of the portfolio companies' development is the metric for evaluating the creation of shared value over time.

Confirming its commitment, in 2020 the Italmobiliare Group joined the United Nations Global Compact, with a view to integrating ESGs even more deeply into the holding company's business strategy with increasingly effective supervision of subsidiaries and associates:

1. assessment of the ESG profile of the companies subject to potential investment, applying the principles and criteria defined by the Responsible Investment Policy;
1. active ownership during the management of portfolio companies, through active dialogue and continuous support towards the integration of environmental, social and governance success levers into the business strategy;
1. transparency and reporting of ESG performance in all management phases up to disposal, also with a view to ensuring that the path undertaken will continue.

In June 2021, taking inspiration from the highest global points of reference, Italmobiliare's Board of Directors approved a profound review of the Group's own points of reference in terms of identity and governance: a Code of Ethics, Sustainability Policies and a Responsible Investment Policy, three interdependent and coordinated documents that trace the path consistently and effectively from a commitment to certain values to day-to-day operations.

Together, they apply in all of the Group's activities, in relations with all its companies or counterparties and in the active involvement of all stakeholders in its sphere of influence, supporting Italmobiliare in best expressing the ultimate role of the investor: transformative capacity, expertise, management skills and capital for a healthy,

inclusive and sustainable global economy, respectful of labour and human rights, able to safeguard the environment and actively involved in promoting integrity in all aspects of the business.

For this reason, specific objectives have been adopted within the short-term incentive plan scorecard since 2022, aimed particularly at creating, refining and rationalising the essential elements to consolidate the path, just begun, to integrate ESGs with the Group's internal processes. Similarly, the 2023-25 long-term incentive plan provides for the introduction of ESG metrics.

Components of remuneration	Characteristics and Purpose
FIXED REMUNERATION	 Includes all fixed annual remuneration (i.e. gross annual pay from employment, directors' fees, compensation for specific offices, …);  It is defined in such a way as to adequately remunerate the role, i.e. the nature of the activity carried out and the responsibilities assigned to it, even in the event of a reduction or absence of variable components.
MBO (Short-term variable incentives)	 This is commensurate with the role held, i.e. the nature of the impact on the Company's overall performance in the medium/long term;  It is connected with the achievement of annual quantitative and/or qualitative performance objectives, which can be objectively measured and are consistent with the goals set out in the Company's strategic plan and sustainability policy;  It is designed to contract or increase proportionally to the degree of achievement of the objectives assigned and the value creation generated.
LTI (Long-term variable incentives)	 This is commensurate with the role held, i.e. the nature of the impact on the Company's overall performance in the short term;  It is connected with the achievement of multi-year quantitative and/or qualitative performance objectives, which can be objectively measured and are consistent with the goals set out in the strategic plan and in the sustainability policy with the primary goal of creating value for shareholders;  It is designed to contract or increase proportionally to the degree of performance generated with respect to the objectives assigned.
Value Creation Sharing Incentive (Non-recurring medium/long term variable incentive)	 It is connected with the achievement of multi-year quantitative performance objectives, which can be objectively measured and are consistent with the goals of creating value for shareholders;  It is designed to contract or increase more than proportionally to the degree of performance generated by extraordinary operations.

The Italmobiliare Remuneration Policy, with reference to the type of components of remuneration to be paid to the various categories of policy beneficiaries, is defined in such a way as to be consistent with the indications given in the Corporate Governance Code and the guidelines issued by the main proxy advisors, as well as with market practice. Specifically:

The remuneration of Non-Executive Directors consists only of fixed compensation, so it is not linked to the Company's results;
The remuneration of the Chief Executive Officer/Chief Operating Officer and Key Management Personnel consists of a fixed part and a variable part, with the latter in turn consisting of a short-term and a medium/longterm component and representing significant part of total remuneration; starting from 2023, an additional stable but non-recurring medium-long term variable component will also be introduced, linked to the creation of value in extraordinary transactions (Value Creation Sharing Incentive).
The remuneration of the Financial Reporting Officer and the Head of Internal Audit consists of a fixed part which is predominant with respect to the variable part. The short-term variable component is primarily linked to goals relating to the role and responsibilities.

FOCUS ON VARIABLE REMUNERATION LINKED TO RESULTS

Value Creation Sharing Incentive

Performance measurement period: linked to the time horizon of the investment

KPIs:

Internal Rate of Return (IRR) of the investment condition for the accrual of the bonus
Capital gains generated by single transactions

CAP: YES

Clawback and/or Malus: YES

√ Suitable balance of fixed / variable
√ Performance measurement period consistent with the investment time horizon
√ Limit to variable remuneration (CAP)
√ Predetermined, measurable objectives linked to the creation of value

EMPLOYEES' REMUNERATION AND WORKING CONDITIONS

The Company monitors working conditions and remuneration on an annual basis in order to promote a consistent remuneration policy for all employees, at the level of both the Parent Company and the Subsidiaries, in line with the Principles of the Sustainability Policies. The greatest efforts in the Human Resources area include initiatives in the following areas:

Health & Safety
Training
Engagement
Diversity & Inclusion, also with a focus on the gender gap and gender representation in portfolio companies
Benefits and Welfare Policies.

1. Pay Mix

The Remuneration Policy is defined in such a way as to guarantee a suitable balance of fixed and variable components and, of the latter, between short-term (annual) and medium/long-term (multi-year) variable components. The method by which the adequacy of said balance has been defined is connected with the nature of the role, its impact on the pursuit of corporate objectives and market practice for similar roles.

The current pay mix referring, for the Chief Executive Officer/Chief Operating Officer, to the 2020-2022 term of office is shown below:

The "Target" pay mix refers to the potential full achievement of the performance objectives linked to the annual variable component (MBO) and the long-term variable component (LTI) (100% achievement of objectives). Similarly, the "Maximum" pay mix refers to the scenario whereby there is an overperformance of all objectives linked to the annual variable component (MBO) and the long-term variable component (LTI) (maximum score of objective achievement). The presentation does not take into consideration the component connected to the Value Creation Sharing Incentive: this element, albeit stable, envisages a time horizon for measuring performance and paying bonuses directly linked to investment transactions which cannot be defined ex-ante; moreover, since its value is linked to capital gains deriving from investments, it cannot be communicated ex-ante for reasons of confidentiality.

Monetary disbursements may also be envisaged that from time to time, through bonuses and one-off discretionary payments, reward certain results or performance that are not already included in the short and medium/long-term variable components of remuneration. The disbursement of one-off cash bonuses to particularly strategic management figures who have stood out by making exceptional individual contributions, is an important mechanism by which to differentiate and ensure meritocratic selection and, therefore, to retain excellent resources. These forms of remuneration are assigned by the Board of Directors on the recommendation of the Remuneration and Nominations Committee, after hearing the opinion of the Board of Statutory Auditors pursuant to art. 2389 of the Italian Civil Code, if appropriate.

MARKET PRACTICE

The Company regularly monitors the main national and international market practices, also by carrying out specific benchmarking remuneration analyses, carried out by the independent international consultancy firm Willis Tower Watson, in order to verify the competitiveness of its remuneration offer.

For the purposes of the market analyses carried out for the positions of Chief Executive Officer/Chief Operating Officer, Chairman of the Board of Directors, Non-Executive Directors and members of the Board of Statutory Auditors, the following peer groups consisting of companies were identified. They are considered comparable based on their size in financial terms and type of business:

ROLE	CRITERIA	PEER GROUP
Chief Executive Officer / Chief Operating Officer	Listed Italian and international holding companies, comparable by type of business and economic-financial size	Atlantia, CIR, IMMSI, Intek, Tamburi Investment Partners, Corp Financiera Alba, Eurazeo, Exor, ICG Group, Indus Holding, KKR & Co., Melrose Industries, Sofina, Wendel
Chairman of the Board of Directors	Listed Italian companies belonging to the FTSE Mib and FTSE Mid Cap index	Aeroporto di Bologna, Amplifon, Anima Holding, Italgas, Prysmian, Safilo Group, Webuild
Non-Executive Directors Board of Statutory Auditors	Italian listed companies belonging to the FTSE Mid Cap index	Anima Holding, Autogrill, Carel Industries, Cementir Holding, CIR, Danieli & Co, Datalogic, De Longhi, Dea Capital, Interpump Group, Maire Tecnimont, OVS, Tamburi Investment Partners, Webuild, Zignago Vetro

REMUNERATION OF THE BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS

At the date of this Report, Italmobiliare's Board of Directors consists of an Executive Director, i.e. the Chief Executive Officer/Chief Operating Officer, and Non-Executive Directors. The remuneration of the Chief Executive Officer/Chief Operating Officer is described in the next section. The other Directors who hold particular offices (Chairman, Deputy Chairman) receive an additional remuneration approved by the Board of Directors, following the April 2020 Shareholders' Meeting that appointed it, on the proposal of the Remuneration and Nominations Committee, having heard the opinion of the Board of Statutory Auditors, pursuant to art. 2389 paragraph 3 of the Italian Civil Code. Non-Executive Directors only receive a fixed remuneration linked to the office and an attendance fee to be paid on the basis of participation at meetings of the Board Committees, in accordance with the resolutions of the Shareholders' Meeting. Non-Executive Directors do not receive variable components of remuneration. The composition of this remuneration is based on the complexity of the positions held and the time commitment required, in line with market benchmarks.

The Directors are also entitled to reimbursement of the expenses incurred for their office and a D&O (Directors & Officers) Liability insurance policy, which covers third-party liability of the corporate bodies in going about their duties. The Chairman may also be assigned specific illness and injury policies.

Chairman	340,000 € *
Deputy Chairman	60,000 € *
Non-Executive Directors	40,000 €
Attendance fee for the meetings of the Board Committees	3,000 € /meeting

COMPENSATION OF THE BOARD OF DIRECTORS IN OFFICE UP TO THE DATE OF APPROVAL OF THE FINANCIAL STATEMENTS AT DECEMBER 31, 2022

* Including the director's compensation of € 40,000.

The Board of Statutory Auditors' compensation is established by the Shareholders' Meeting at the time of their appointment.

The compensation of the Board of Statutory Auditors decided by the Shareholders' Meeting in April 2020 is adequate to the competence, professionalism and commitment required, and consistent with market standards, as shown by the benchmark analysis carried out in early 2020 with the help of Willis Tower Watson as advisor.

COMPENSATION OF THE BOARD OF STATUTORY AUDITORS IN OFFICE UP TO THE DATE OF APPROVAL OF THE FINANCIAL STATEMENTS AT DECEMBER 31, 2022

Chairman	75,000 €
Auditors	50,000 €

The 2023 Shareholders' Meeting will decide on the remuneration for the 2023-2025 term of office pursuant to art. 2389, paragraph 1, within the scope of its powers. The Board of Directors that will take office after the Shareholders' Meeting called in April 2023 to approve the 2022 financial statements, on the proposal of the Remuneration and Nominations Committee and having heard the opinion of the Board of Statutory Auditors, will resolve, within the scope of its powers, the compensation pursuant to art. 2389 paragraph 3 of the Italian Civil Code in compliance with the guidelines of this Policy.

In particular, the proposal that will be submitted to the Shareholders' Meeting takes into account the evidence of the benchmark analysis carried out with the help of the advisor Willis Tower Watson. This proposal provides for a basic fee for each Director of € 40,000 per year, as well as an attendance fee of € 3,000 for each Board committee meeting attended.

Likewise, the next Shareholders' Meeting will be called upon to appoint the Board of Statutory Auditors, which will remain in office until the approval of the financial statements at December 31, 2025, establishing at the time of appointment the related remuneration which will be defined in a way that is appropriate for the competence, professionalism and commitment required, and consistent with the results of the benchmark analysis carried out with the help of Willis Tower Watson. This proposal provides for a fee for the Chairman of € 75,000 per year and a fee for each Standing Auditor of € 60,000 per year for their entire term of office.

REMUNERATION OF THE CHIEF EXECUTIVE OFFICER/CHIEF OPERATING OFFICER

Remuneration of the Chief Executive Officer/Chief Operating Officer is defined in line with the powers conferred and the principles and purpose of the Company's Remuneration Policy, as well as in line with market benchmarks for similar positions in comparable companies.

The remuneration package of the Chief Executive Officer/Chief Operating Officer is structured into its various components in such a way as to guarantee:

Consistency between the results achieved and the variable remuneration schemes implemented by establishing performance objectives that involve a reasonable amount of challenge for the person concerned;
Alignment with the best market practices in terms of remuneration pay mix (fixed and variable components of remuneration);
A link between the short- and long-term Company results, in terms of creating value;
The correct remuneration according to role, powers and responsibilities;
Long-term loyalty and retention.

The remuneration of the Chief Executive Officer/Chief Operating Officer is defined according to criteria that assure a suitable balance of fixed and variable components of remuneration and, with regard to the latter component, of short- and long-term variable components also taking into consideration the introduction of the Value Creation Sharing Incentive in 2023. This structure promotes a solid alignment between the remuneration disbursed and/or accrued and the creation of value in the long-term.

The policy for the remuneration of the Chief Executive Officer/Chief Operating Officer is made up as follows:

1. Fixed Remuneration

In line with the decision-making process already described, the Board of Directors that will be appointed for the 2023-2025 term of office will determine the remuneration of the Chief Executive Officer/Chief Operating Officer on the proposal of the Remuneration Committee.

In total, the fixed component is determined in such a way as to ensure an adequate and sustainable remuneration, even if the variable component should decline. This is in accordance with the objectives of this policy. The Remuneration and Nominations Committee conducts regular analyses of the external competitiveness of the fixed remuneration, so as to assess the consistency of the remuneration of the Chief Executive Officer/Chief Operating Officer with respect to the same roles held in comparable companies. This analysis was carried out in early 2020 and, in view of the renewal of the corporate bodies at the beginning of 2023, with the help of Willis Tower Watson as advisor.

The compensation for the roles held in subsidiary companies and/or associates are repaid in full to Italmobiliare.

For the 2020-2022 mandate, the fixed component of remuneration of the Chief Executive Officer/Chief Operating Officer established by the Board of Directors on the proposal of the Remuneration and Nominations Committee was considered commensurate with the powers and responsibilities assigned to him. It was confirmed at € 1,000,000 per year.

2. Short-term variable remuneration (MBO)

The Chief Executive Officer/Chief Operating Officer, as well as other Key Managers of the Company, are recipients of an annual incentive scheme (the MBO plan), which entitles them to receive a cash bonus when specific performance objectives are achieved, measured over a time frame of one year and consistent with the Company's strategic objectives, set annually.

The MBO plan envisages the assignment of objectives that are challenging, feasible, measurable, able to be influenced by the persons to whom they are assigned and which are consistent with their responsibilities. The objectives are a combination of Group economic-financial metrics, strategic and operational objectives that are under the influence of each manager and specific objectives related to ESG factors.

As a rule, the MBO plan's annual performance scorecard includes between two and five objectives. For each objective, a minimum level is defined, below which it is considered that the objective has not been attained, a target level at which the objective is deemed to have been achieved 100% and a maximum level, set as a for the maximum achievement. The target performance level, achievement of which gives entitlement to receive 100% of the incentive assigned, is normally defined in line with the Company's budget.

The level of achievement of the MBO card as a whole is defined as the weighted sum of the level of achievement of each objective for the weight assigned.

If objectives are achieved at target level, i.e. 100% of performance, the Chief Executive Officer/Chief Operating Officer accrues the right to receive a monetary bonus equal to 100% of the MBO target; this bonus has a value of up to 72.5% of the fixed remuneration.

The MBO plan envisages payment of a bonus in the event that the minimum level of results is achieved, at which point the bonus accrued is 66% of the MBO target. Achievement of the maximum level of results entails the accrual of a bonus equal to 166% of the MBO target.

PERFORMANCE CURVE / PAYOUT

Below are the objectives that make up the scorecard of the MBO plan, attributable to profitability, value creation and sustainability requirements, and which favour the orientation of the main corporate priorities in the short term. These objectives were considered in line with the strategic management priorities in terms of both development and cost control, as well as being in line with best practices as emerged from the analyses carried out with the support of external consultants.

MBO SCORECARD FOR THE CHIEF EXECUTIVE OFFICER/CHIEF OPERATING OFFICER

The Company reserves the right not to disclose the value of the targets underlying the indicators, as it considers such information to be sensitive.

3. Long-term variable remuneration

A significant component of the Italmobiliare Remuneration Policy is focused on a medium/long-term time frame, so as to strengthen the link with the shareholders' interest in creating value. The Chief Executive Officer/Chief Operating Officer, Key Management Personnel and some key managers of the Company selected by the Chief Executive Officer are recipients of the "2023-2025 Phantom Stock Grant Plan" (LTI Plan), whose main characteristics are described below. For more details, please refer to the Disclosure Document available on the Company's website in the section on Governance/ Shareholders' Meeting.

The LTI plan's main aim is to link a significant portion of the remuneration of the Chief Executive Officer/Chief Operating Officer as well as of the other beneficiary managers, to the achievement of economic-financial performance that can be sustained over time and is consistent with the primary goal of creating value for shareholders. The LTI plan also strengthens management retention and commitment towards achieving strategic company objectives.

The LTI plan aims to remunerate long-term performance measured by achieving two targets: the first one is the net asset value (NAV) per share; this objective, in addition to being in line with best practices as emerged from the analyses carried out with the support of external consultants, was considered in line with the business priorities in terms of both development and cost control, as well as being in line with the short-term goals. The second objective is the ESG Performance, assessed by the main specialist rating agencies (CDP, Sustainalytics, S&P), considering both the number of ratings that have improved and any improvement in terms of assessment. The chosen indicator synthetically reflects all aspects of sustainability (E, S, G) considering the entire investment portfolio. The three ratings chosen are defined in "rate the raters" studies as those most appreciated by investors and ESG experts.

The Plan provides for the assignment of a specific number of Rights to receive Phantom Stocks linked to the value of the Company's shares at the end of the Performance Period, in relation to the achievement of the objectives described above in the three-year period of reference.

Thanks to the structure that creates a direct link between the remuneration to be paid, the performance of Italmobiliare's share price and the Company's results, this type of Plan aims to ensure a correlation between the creation of value for the shareholders and for the managers who perform key functions in the achievement of strategically important results.

OBJECTIVES OF THE 2023-2025 PHANTOM STOCK GRANT PLAN

The final bonus therefore depends on:

the number of Phantom Stocks accrued (based on Group performance);
the value of the Shares, based on stock market performance.

Performance objectives linked to the target NAV per share and relating to the ESG performance are set by the Board of Directors in accordance with the Company's strategic objectives.

Each objective contributes independently to the determination of the Plan.

If objectives are achieved at target level, i.e. 100% of performance, the Chief Executive Officer/Chief Operating Officer accrues the right to receive a monetary bonus equal to 100% of the LTI target. This bonus has a value upon assignment of up to 150% of the fixed remuneration per year.

A threshold level is envisaged, below which the right to receive the incentive is not accrued, and a maximum limit, upon achievement of which the maximum incentive is accrued.

The number of Phantom Stock attributable will be defined according to the following incentive curve:

PERFORMANCE CURVE / PAYOUT

on reaching a minimum level of performance, a number of Phantom Stocks equal to 66% of the rights to receive the assigned Phantom Stocks will be attributed. No Phantom Stock will be attributed below this minimum level;
on reaching the target performance level (100%), a number of Phantom Stocks equivalent to the number of rights to receive the assigned Phantom Stocks (100%) will be attributed;
on reaching a maximum level of performance, a number of Phantom Stocks equal to 166% of the rights to receive the assigned Phantom Stocks will be attributed. No additional Phantom Stock will be attributed on reaching a performance level above this cap;
for intermediate performances between the minimum level and the target, and between the target and the maximum, a calculation by linear interpolation will be applied, with reference to the share of the incentive linked to NAV. With reference to ESG performance, the bonuses are calculated on the basis of a scalar curve.

Given the direct connection between the bonus and the value of the share, the impact of any distribution of dividends during the 3-year vesting period has to be taken into account. So, in order to maintain the plan's incentive effect unchanged, at the end of the vesting period a number of additional Phantom Stocks equal to the value of any dividends paid out during the performance period will be assigned.

4. Value Creation Sharing Incentive

Consistent with the purpose of strengthening the link between variable remuneration and the creation of shareholder value, the 2023 Remuneration Policy provides for the introduction of a medium-long term incentive plan called the Value Creation Sharing Incentive.

The purpose of the Value Creation Sharing Incentive is to reward management's contribution to value creation in relation to investment management: the plan recognizes a monetary bonus directly correlated to the capital gains generated by exit operations. The Incentive promotes retention and has been defined taking into consideration the remuneration models applied by European companies, often unlisted, with a business model close to that of Italmobiliare, but in such a way as to guarantee bonuses that are not excessive in value and, in any case, defined in accordance with the overall economic performance of the Company.

For each transaction, the Incentive provides for the definition of a bonus pool at the exit equal to a percentage of the financial performance of the transaction above the target threshold in terms of Internal Rate of Return (IRR). The bonus pool determined in this way is paid to the managers involved in managing the investment according to distribution criteria defined ex-ante and consistent with the critical nature and responsibilities of the individual recipient's role. There is a cap on the value of the incentive paid at an individual level, equal three times the total annual remuneration (face value).

The recipients of the Value Creation Sharing Incentive are the Chief Executive Officer/Chief Operating Officer, the Key Management Personnel and the managers recipients of the LTI Plan.

In the context of the Value Creation Sharing Incentive, the measurement of performance considers a medium-long term period, consistent with the time horizon of the investment. For each investment, the incentive provides for possible payment of bonuses after the exit.

5. Benefits

Non-monetary benefits may be granted, such as company car for both personal and business use. There are also supplementary pension plans, health insurance and life insurance policies to integrate those provided for by the National Collective Labour Agreement for Managers of companies producing goods and services, in line with market practices.

As with other Directors, the Chief Executive Officer/Chief Operating Officer benefits from a third-party liability insurance policy that has been taken out for events related to the exercise of his functions, in compliance with the provisions set forth with regard to his offices, except in cases of wilful misconduct and fraud.

Italmobiliare already has welfare plans in place for Company employees which can also be extended to managers.

28 |

REMUNERATION POLICY FOR KEY MANAGEMENT PERSONNEL

Italmobiliare promotes a remuneration policy for Key Management Personnel that is consistent with that described in the previous section for the Chief Executive Officer/Chief Operating Officer. This policy takes into account:

recognition of the role and responsibilities in terms of their strategic nature;
competitiveness with market remunerations;
internal fairness for figures of similar or comparable level;
retention and loyalty.

The remuneration policy applicable to Key Management Personnel is structured as follows:

The compensation package is structured in such a way as to assure a suitable balance of fixed and variable components of remuneration and, with regard to the latter component, of short- and long- term variable components. This structure promotes a solid alignment between the remuneration disbursed, the results achieved during the year and the creation of value in the long term.

Italmobiliare has currently chosen the Head of Investment Management, the Administrative Director/Financial Reporting Officer and two managers from the Development & Investment Department, as Key Management Personnel.