Remuneration report

Issuer: Nexi S.p.A.

www.nexi.it

Approved by the Board of Directors on 6 March 2020

Drawn up in accordance with articles 123-ter of Legislative Decree no. 58 of 24 February 1998 and 84-quater of the Consob Issuers' Regulation and related Annex 3A, Schedules 7-bis and 7-ter.

Remuneration report 2 di 44

Nexi 7 Who we are 7	Foreword 6



Vision & Mission 7
Strategy and Values 9
Summary of 2019 results 10
Key indicators of the remuneration policy 10
Overview 11

1.		Governance 13
	1.1	Bodies and people involved13
		- Shareholders' Meeting 13
		- Board of Directors13
		- Remuneration and Appointments Committee14
		- CEO and other relevant functions17
	1.2	The remuneration policy approval process17

2.		Purposes, principles and instruments 18
	2.1	Purposes18
	2.2	Principles19
	2.3	Instruments and recipients19

3.		Remuneration Policy 22
	3.1	Board of Directors 22
	3.2	CEO and General Manager23
	3.3	Executives with Strategic Responsibilities 30
	3.4	Board of Statutory Auditors33
	3.5	Company welfare and sustainable development33

4.	Foreword36
	4.1 Board of Directors 36
	4.2 CEO and General Manager37
	4.3 Executives with Strategic Responsibilities 38
	4.4 Board of Statutory Auditors39
5.	Remuneration Tables 40

Letter from the Chairman of the Remuneration and Appointments Committee

Dear Shareholders,

As Chairman of the Remuneration and Appointments Committee, I am particularly pleased to present you, also on behalf of the Board, the first Report on remuneration policy and remuneration paid by Nexi S.p.A..

The purpose of this document is to increase our stakeholders' awareness of the Company's remuneration policies and to highlight their consistency with the Company's business strategies.

Nexi is a leader in digital payments in Italy.

Strong investments in technology, new specialized and managerial skills, a complete renewal of the commercial offer, and the acquisition of a wider industrial scale have allowed Nexi to specialize more and more in digital payments and to bring the attention of the market on their fundamental role for the banking system and for the country in general.

In addition, Nexi is constantly striving to develop products and services that guarantee concrete benefits to citizens, businesses and Public Administration, encouraging a public debate and a discussion on the benefits that digital payments can bring to the entire country.

The past year has been characterized by important changes, both in terms of governance and in terms of business:

The transition from private to public company through the stock market listing on the 16th of April 2019 clearly certified the Company's maturity, as demonstrated by the entry of new international and national shareholders, projecting the Company into the near future;
The achieved results and the projects undertaken continue to confirm Nexi's ability to be a leader in the digital payments market in line with the objectives set out in the Business Plan focusing on the principles of profitable and sustainable growth, innovation and technological/ digital transformation, as well as operational excellence and human capital development;
The transformation path led Nexi to adopt a new governance: in light of this corporate evolution, together with the profound changes taking place in the market, the new Remuneration and Appointments Committee, established on the 25th of February 2019, taking advantage of the legacy of the previous one, decided to adopt a new remuneration policy in continuity with the previous one, which reflects and supports Nexi's business strategy and values, in line with the guidelines of the Company's strategic plan.

The Board of Directors, based on the proposal of the Remuneration and Appointments Committee, approved the new remuneration policy with the aim of:

creating lasting value for stakeholders: shareholders, customers (banks, merchants, consumers) and employees;
pursuing and ensuring a sustainable growth of the organisation in the medium to long term;
attracting, motivating and retaining people; and
developing a culture of performance and based on merit-based reward recognition.

I believe it is important to go over some of the key elements of Nexi's remuneration policy, based on a responsible approach and on the conscious management of business risks:

Analysis of the evolving trends in remuneration and constant monitoring of market practices with the aim of strengthening Nexi's leadership in the management and development of resources among listed and hi-tech companies and to attract and retain the best skills, while ensuring overall fairness in the compensations granted;
Pre-determined, measurable and complementary financial and non-financial objectives, defined in accordance with the business plan and linked to variable remuneration through:
- long-term incentive plan LTI, introduced in 2019 in order to guide the Company's performance in the medium/long term by aligning Top Management's behaviour with the company strategy and the interests of shareholders; and
- short term incentive plan revised MBO built with logics able to guarantee a correct and transparent management of customers and the corresponding minimization of risks; and
Clear and transparent communication to shareholders and to the entire company, sharing the objectives, principles and tools of the remuneration policy integrated with the assessment and development processes already in place.

Furthermore, in view of the growing attention that Nexi is paying to sustainability matters, the Board of Directors, based on the proposal of the Committee, approved the introduction of a specific objective in the remuneration policy aimed at keeping the management increasingly focused on long-term growth objectives. The Committee is confident that this decision will help raise corporate awareness on a fundamental and current issue such as sustainable economic development, aimed at creating long-term value for stakeholders. The introduction of the first objective in the MBO of the Managing Director and of the Executives with Strategic Responsibilities, i.e. People Value, represents a first step towards the evolution of remuneration policies in line with both the new national and EU regulation for sustainable finance, and with the orientations of the most influential institutional investors.

Together with the Committee's Members, whom I would like to personally thank for their contribution, I believe that this policy - especially in the current context of strong transformation - is consistent with Nexi's vision and strategy and represents a confirmation of the strong commitment to create value for our stakeholders.

I would therefore like to thank you, on behalf of the Committee, for the support you would like to give to the remuneration policy proposed in this Report, which is, I would like to stress, in continuity with the policy approved at the last Shareholders' Meeting.

Marinella Soldi Chairman of the Remuneration and Appointments Committee

Foreword

This Report on the remuneration policy and remuneration paid (hereinafter referred to as the "Report") was approved by the Board of Directors of Nexi S.p.A. (hereinafter referred to as the "Board of Directors" or "BoD" and "Nexi" or the "Company", respectively) on the 6th of March 2020, based on the proposal of the Remuneration and Appointments Committee, in accordance with the applicable laws and regulations1 .

The Report is divided into two Sections: these Sections are preceded by a brief description of the Company and a summary of the main remuneration elements envisaged for the Managing Director and General Manager2 and for the executives with strategic responsibilities3 , in order to provide the market and investors with an immediate overview.

The content of each Section is described in greater detail below:

• Section I

Section I of this document illustrates the remuneration policy adopted by Nexi with a three-year time horizon with reference to the members of the Board of Directors, the Managing Director and General Manager, the Executives with Strategic Responsibilities, and the members of the board of statutory auditors of Nexi S.p.A. (hereinafter the "Board of Statutory Auditors"), specifying the purposes and principles of the current remuneration policy, the bodies involved, and the instruments used to adopt it and implement it. The above is also relevant for the purpose of determining the remuneration policies of the Companies directly controlled by Nexi.

In accordance with the provisions of Article 123-ter, paragraphs 3-bis and 3-ter, of the TUF, Section I of this Report is subject to the binding vote of the ordinary shareholders' meeting of Nexi S.p.A. (hereinafter the "Shareholders' Meeting") called to approve the financial statements as at 31 December 2019.

• Section II:

Section II of this document details the remuneration paid during 2019 to the members of the Board of Directors, the Managing Director and General Manager, the Executives with Strategic Responsibilities, and the members of the Board of Statutory Auditors, as defined by the remuneration policy adopted for that year.

In compliance with the provisions of Article 123-ter, paragraph 3-bis of the TUF, Section II of this Report is subject to the consultative vote of the Shareholders' Meeting called to approve the financial statements as at 31 December 2019.

This Report will be made available to the public at Nexi's registered office (Corso Sempione 55, 20149 Milan) and on the Company's website (www.nexi.it), no later than the twenty-first day prior to the date of the Shareholders' Meeting called to approve the financial statements for the year 2019 and called to make a binding resolution on Section I of this Report, in accordance with the applicable laws and regulations.

¹ Art. 123-ter of Legislative Decree no. 58 of 24 February 1998 - Consolidated Law on Finance ("TUF") as last amended by Legislative Decree no. 49 of 10 May 2019. Art. 84-quater of the Regulation issued by CONSOB with resolution no. 11971 of 14 May 1999 on issuers ("Issuers' Regulation"), as subsequently amended and supplemented and related Annex 3A, Schedules 7-bis and 7-ter.

² The MD of Nexi S.p.A. who also holds the position of Group General Manager ("Managing Director and General Manager" or "MD/GM").

³ The persons who have the power and responsibility, directly and indirectly, for the planning, management and control of the Company (hereinafter the "Executives with Strategic Responsibilities" or "ESRs")

Nexi

Who we are

The Nexi Group4 , leader in the digital payments sector in Italy, through its partner banks, provides services to approximately 900,000 merchants, over 30 million card owners and businesses throughout the country. The business is based on long-term relationships with about 150 affiliated banks, which represent more than 80% of the national banking sector in terms of number of branches5 . Nexi's history dates back to 1939 when six Italian banks established a company (Istituto Centrale delle Banche Popolari Italiane - ICBPI) with the aim of creating a technology and service-based infrastructure and providing support services to Italian cooperative banks (banche popolari).

In December 2015, the entry of a new reference shareholder known as Mercury Italy S.r.l.6 gave rise to an important transformation process that led to the birth of Nexi: the PayTech of the Banks. Over time, the Company grew and gradually expanded its offering both through the organic development of new products and services and through the implementation of synergy-generating acquisitions (the most relevant ones include: CartaSi S.p.A., Bassilichi S.p.A., and Mercury Payment Services S.p.A.).

In recent years, Nexi focused its attention on investments, technological innovation, skills and new products and services that are part of a new strategic vision and are contributing in favouring the digitization of payments in our country.

Vision & Mission

According to our Vision, "all payments will be Digital". Nexi's Mission is inspirational: We want to change the way people and businesses pay and cash-in, making all payments digital so that they are easier, faster and more secure.

For this reason, we are committed, together with our Partner Banks, to offer quality solutions for digital payments that are innovative, simple and secure for people, businesses and for the public administration, working every day to spread them as much as possible in our country. We want to become an excellent company, Italian but with an international profile, which constantly invests in technology and quality, and is always customer-oriented.

4 The following companies are included in the scope of consolidation: Nexi S.p.A., Nexi Payments S.p.A., Mercury Payment S.p.A., and Help Line S.p.A
5 Source: Company's management data
6 Vehicle indirectly held by the following funds: Advent International, Bain Capital and Clessidra

We will achieve this thanks to the commitment, the skills and the passion of our people. This is why we will be recognized as the Champion of digital payments in our country.

Our Vision, Mission and Ambition
Our Vision	Every payment will become digital
Our Mission and Ambition	We want to change the way People and Businesses pay and cash-in every day
Our Positioning	We will make every payment digital, simpler, faster and safer

Today, through its technology, Nexi connects banks, stores and citizens, making digital payments possible. Nexi's mission is to make every payment digital and facilitate the digitization of our country, operating in three market segments with a wide coverage of the payments' value chain by serving, directly or through banks, small merchants, large retail players, corporate companies and consumers.

Ecosystem of services offered by Nexi⁷

• Merchant Services & Solutions:

provides the necessary services to enable the acceptance of electronic payments for merchants through a full range of innovative services that enable transactions through both physical and digital channels (e-commerce).

• Cards & Digital Payments:

provides a wide range of "issuing" services, i.e. related to the procurement, issuance and management of payment cards for individuals and businesses, using advanced anti-fraud systems to ensure speed, reliability and security of user authentication systems and rapid execution of payment transactions.

• Digital Banking Solutions:

provides three types of services: sale and/or management of ATM hardware/software components, clearing services and Digital Corporate Banking services. Furthermore, in collaboration with the CBI (Interbank Corporate Banking) consortium, it manages the Italian open banking infrastructure.

Strategy and Values

Since its birth, Nexi has started a wide and intense transformation process with the aim of being the PayTech of the Banks, through the development of an important business plan based on the following strategic pillars:

Promoting sustainable organic growth by expanding the offering, the penetration rate and use of digital payment products and services generating value for all the shareholders;
Investing in technology, acquiring new skills and accelerating the transformation of the IT platform;
Aiming for operational excellence, reducing costs, improving service levels and keeping banks and customers at the centre;
Developing, in terms of skills and leadership, the best team of people operating in our market; and
Developing our competitive positioning, and increasing growth opportunities in the market also through strategic partnerships and potential extraordinary transactions.

People are one of the strategic levers and a key factor in Nexi's success. The cultural transformation path, which started in 2017, aims at building a corporate identity - One Nexi - based on our Values, leveraging on everyone's aptitudes, passions, skills and experience.

The values we have set for ourselves focus on the future, the customer, excellence, and the ability to be simple, with the will of building together the Nexi of today and tomorrow.

Shape the future	We think positively with confidence in ourselves. We take the initiative. We are always looking for new ideas with the courage to try, without fear of making mistakes. We are curious, we ask questions, we never stop learning. We are passionate about creating new things.
	Live for Customers We look at things through customer's eyes, we always put ourselves in their shoes. We put customer needs first. We do everything we can to find the best solutions. When it is not enough, we do more. The feedbacks we receive help us to improve. When the customer calls, the rest goes in the background.
Be reliable, always	Safety comes first. We respect the commitments we make. We always look for absolute quality: zero defects. We take our responsibilities beyond our tasks.
Make it simple	We do everything we can to make life easier for our customers, even when it is complex. We focus on what is important. We tell each other things straightforwardly and simply. We are quick in deciding and effective in acting. We make life easier also for our colleagues.
Build together	We win together, we lose together. We help each other with a smile. We have a common vision and we confront each other openly to achieve it together. We build together on the richness of our experiences, ideas and skills.

Summary of 2019 results

"In the last year we have consolidated our positioning as PayTech leader in the Italian digital payments market. In 2019, we invested more in technology and expertise than anyone else in Europe in our sector, to bring more innovation, quality and security to our customers. This allowed us to continue on our path of growth and of sustainable development and to make simpler and highly innovative solutions that make life easier for citizens, businesses and the Public Administration available to our partner Banks. The extraordinary transactions that took place during the year also allowed us to increase the scale, perspective and investment capacity of the Company, all necessary elements to take advantage of the opportunities offered by an increasingly dynamic market in the process of international consolidation. We will continue along this investment path, alongside with the Banks, with the conviction that digital payments represent a strategic platform for the development of our country".

Paolo Bertoluzzo Managing Director of Nexi S.p.A.

In 2019, the Nexi Group registered:

EBITDA of €502.5 million, emphasising an organic growth of 18.5% y/y thanks to solid revenue growth, continued focus on cost containment and operating efficiency, and synergies related to past acquisitions made in advance with respect to the plan.
Revenues were €984.1 million, up 7.1% y/y net of zero margin hardware resale contracts (+5.7% y/y nominal growth); and
Transformation costs, recorded below EBITDA, amounted to approximately €51.9 million in 2019, down 60% compared to 2018; in 2019 the strong focus on investments in technology and innovation was confirmed, with total Capex amounting to €167.3 million (equal to 17% of Revenues).

Key indicators of the remuneration policy

Our remuneration policy is an essential element of our strategy, and is one of the elements that helps in implementing it in accordance with our values. The strategic drivers are reflected in the variable incentive schemes: the short-term (MBO) and long-term (LTI) incentive plans are structured in such a way that the targets and measurement metrics8 are consistent with the business objectives in a medium/long-term sustainability logic according to the prevailing correlations:

		SHORT TERM - MBO					LONG TERM - LTI
		Ebitda	Revenues	Operating Cash flow	Opex	Customer: NPS	IT Strategy	People Engagement	Relative TSR	Cumulative Operating cash flow
	Growth	l	l	l			l	l	l	l
	Technology			l	l	l	l	l	l	l
Strategic	Excellence	l		l	l	l	l	l	l	l
Drivers	People						l	l	l	l
	Development	l	l						l

8 With reference to the measurement metrics a brief description follows for Net Promoter Score, IT Transformation and People Engagement, respectively. The Net Promoter Score is an indicator that detects the experience perceived by end customers (owners, merchants and banks), in order to continuously improve the service offered. The NPS used is the relational NPS, detected by asking customers to express their level of satisfaction with the relationship with Nexi, answering, on a scale from 0 to 10, the question: ''based on your recent experience, would you recommend Nexi?". Based on the feedback received from Customers, the NPS is calculated over the relevant period, applying the following formula: (% Promoter - % Detractor)*100. IT Transformation is measured through the progress of the activities envisaged in the Company's IT strategy plan by means of a metric that expresses at an aggregate level the percentage of operational completion. This measurement is based on verification that the individual milestones of the plan have been reached, which take on different significance in relation to the volume of work actually carried out and the significance of the activity completed. People Engagement is the level of satisfaction that employees express through the People Survey, Nexi's people listening tool, managed by a third party company; it is measured through the balanced engagement index taking into consideration those who expressed a positive evaluation net of those who expressed a negative evaluation, on a mix of indicators that assess the level of satisfaction, the sense of pride/belonging, and the desire to recommend company/products/services

Overview

Remuneration Policy

The main elements and characteristics of the remuneration policy of Nexi's CEO and General Manager and Executives with Strategic Responsibilities are summarized in the table below.

REMUNERATION ELEMENT	PURPOSE	KEY FEATURES	VALUES	PAG. RIF.
Fixed remuneration	To recognise the value of the role held and responsibilities assigned, also taking into account the experience, skills and contribution required	It consists of the Gross Base Salary (so-called RAL) which represents the fixed component of the total remuneration, aimed at recognising performance even if the variable components are not paid. It is defined in line with the responsibilities and impact of the role, to ensure fairness of treatment. It is aligned with the median of the reference market; for top performers it is aligned with the highest values of the external market (according to benchmark with the reference peer groups9 carried out with the support of an independent external consulting firm)	CEO/GM Gross Base Salary (RAL): €1,200,000 ESRs Commensurate on average with the role held and responsibilities assigned.	P 23 P 30
Short-term incentive (MBO)	To guide the Company's performance in the short term through the identification of objectives aligned with the Company's strategy, budget and annual economic financial plans, in compliance with the principles of mitigation of the main risks	Plan based on the results achieved in the short term, over a period of 1 year against specific measurable and complementary objectives. The achievement of the objectives will result in the granting of economic/ monetary incentives, paid out within the first half of the fiscal year following the relevant year. Entry gate starting from which the incentive can be granted: Group EBITDA ≥ 85% of target value. Likewise, no MBO incentives are paid out, even when the other objectives are achieved, if the individual objectives assigned to the individual beneficiary are not achieved. There are malus and clawback clauses CEO/GM Key Performance Indicators ("Key Performance Indicators" or "KPIs") and related weights:: • Group EBITDA (40%) • Operating Free Cash Flow (20%) • Group Revenues (20%) • Individual objectives (20%) - Operational excellence: Group OPEX; - Customer Centricity: Net Promoter Score; - Transformation: IT Operational Plan; - Sustainability/People Value: Engagement Index People Survey ESRs: Key Performance Indicators (KPIs): • Group EBITDA • Economic, financial and non-financial objectives related to the specific responsibilities of the BU/Area • Individual objectives including Sustainability/ People Value	CEO/GM: Target incentive: 130% of Gross Base Salary (RAL) % Payout vs target incentive: from 0% to 200% % Payout vs RAL: maximum 260% ESRs Target incentive differentiated according to the assigned role Target incentive (ESR average): 62% of RAL % Payout vs. target incentive: from 0% to 200%. % Payout vs. maximum RAL (ESR average) 124%	P 24 P 30

9 Companies selected according to defined parameters and indicators, guaranteeing their suitability for remuneration comparison purposes

REMUNERATION ELEMENT	PURPOSE	KEY FEATURES	VALUES	PAG. RIF.
Long-term incentive (LTI)	To guide company performance in the medium/long term by aligning management behaviour with company strategy and creating value for stakeholders. To retain key people in the company	This is a variable incentive system that provides for the assignment of rights to receive ordinary Nexi shares free of charge to a selected panel of employees of the Company (based on banding and performance criteria), over a medium-long term (three years), vesting of which is conditioned by the achievement of set objectives. CEO/GM and ESRs Assignment of rights to receive Nexi's ordinary shares, Performance Shares, free of charge, based on performance criteria over a medium-long term (three years). • Assignment frequency: Rolling (3 allocation cycles: 2019-2021; 2020-2022; 2021-2023) • Performance period: three years • Entry Gate: Three-year Operating Cash Flow ≥ 80% of Target OCF • Performance indicators: - (50%) Relative Total Shareholder Return (TSR) - (50%) Cumulative Operating Cash Flow • Holding Period: 1 year for 50% of the shares vested • There are malus and clawback clauses	CEO/GM: Target amount: 130% of RAL % Payout vs. target incentive: from 0% to 200% % Payout vs RAL: maximum 260% ESRs: Target amount: 100% of RAL % Payout vs. target incentive: from 0% to 200% % Payout vs RAL: maximum 200%	P 26 P 32
Benefits	To integrate other remuneration elements into a broader logic of sustainable welfare	Benefits are an important component of the remuneration package as a complement to the other remuneration elements, in a broader logic of sustainable welfare (referred to in the dedicated section in paragraph 3.5). They differ according to the category of beneficiaries and type; they are aligned with market practices, and are consistent with the regulations and the provisions of the collective bargaining agreements in force.	Main types for CEO/ESRs: Supplementary pension; Supplementary healthcare; Insurance coverage (medical expenses, death, permanent disability) Mixed-use car	P 29 P 32
Other instruments: severance payments and non-competition agreements	To protect the company from any risk of litigation and/ or competitive risk in cases of termination of the employment period To protect the employee in case of damages	CEO/GM: • Treatment in the event of removal from office or termination of employment ESRs: • Treatment in case of termination of employment • Non-competition agreements CEO/GM and ESRs: • Directors & Officers Policy Discretionary one-off bonuses cannot be granted to the CEO and Executives with Strategic Responsibilities.	CEO/GM: severance payments equal to 24 gross monthly payments (details in paragraph 3.2) ESRs: severance payments equal to 24 gross monthly payments in accordance with the provisions of Article 2121 of the Italian Civil Code non-competition agreements Consideration commensurate with the extent and duration of the agreement.	P 29 P 32

Section I - Remuneration Policy

1. Governance

The governance of the process of defining the remuneration policy is consistent with the laws and regulations currently in force and with the provisions of the by-laws.

1.1. Bodies and people involved

The bodies and people involved in the preparation and approval of the remuneration policy, as well as the verification of its correct implementation, are listed below, indicating their respective roles and responsibilities.

Shareholders' Meeting
Board of Directors
Remuneration and Appointments Committee
CEO and other relevant functions

Shareholders' Meeting

With regard to the matters of interest in this Report, the Shareholders' Meeting:

defines the remuneration of the members of the Board of Directors at the time of appointment and for the entire term of office;
determines the remuneration of the members of the Board of Statutory Auditors;
approves incentive plans based on financial instruments on the proposal of the Board of Directors; and
approves this Report in accordance with the provisions of Article 123-ter of the TUF.

Board of Directors

The Board of Directors - as of the date of this document - consists of 13 members, with a three-year term of office (until the approval of the financial statements as at 31 December 2021).

The Board of Directors

approves the remuneration of directors with delegated powers and other directors holding particular positions following analysis of the proposals made by the Remuneration and Appointments Committee, after consulting the Board of Statutory Auditors;
approves the remuneration for participation in internal board committees10 after consulting the Board of Statutory Auditors;
approves the remuneration of Executives with Strategic Responsibilities as well as the first reports of the CEO in the various forms provided for by current policy;
approves the short-term (MBO) and long-term (LTI) variable incentive plans, including the objectives, the degree of achievement, the beneficiaries, and the regulations implementing these plans; and
approves the remuneration policy and this Report, submitting them to the subsequent vote of the Shareholders' Meeting.

The Chairman of the Board of Directors participates, upon invitation, in the meetings of the Remuneration and Appointments Committee, calls and chairs the meetings of the Board of Directors, coordinates its work, and ensures that adequate information is provided to all directors, verifying the implementation of the resolutions of the Board of Directors, including those concerning remuneration.

¹⁰ Strategic Committee, Control, Risk and Sustainability Committee pursuant to art. 7 of the Corporate Governance Code as defined below, Related Parties Transactions Committee pursuant to art. 4 of the Corporate Governance Code and following the provisions of the Related Parties Regulation adopted by resolution no. 17221/2010, a Remuneration and Appointments Committee pursuant to articles 5 and 6 of the Corporate Governance Code (the "Internal Board Committees").

Remuneration and Appointments Committee

a. Composition

The Remuneration and Appointments Committee (hereinafter also referred to as the "Committee") was established on 25 February 2019 pursuant to the Corporate Governance Code11. The powers, responsibilities and tasks of the Committee are defined by a specific set of rules, approved by the Board of Directors on 8 March 2019. In accordance with the provisions of the Corporate Governance Code, the Committee is made up of three directors, all non-executive and the majority of whom, including the chairman, meet the independence requirements set forth in the TUF and the Corporate Governance Code, and have the knowledge, skills and experience necessary to perform the tasks assigned to them, in compliance with the provisions of art. 6 of the Corporate Governance Code.

The Remuneration and Appointments Committee of Nexi – at the date of this document - is composed of three members.

Previously, and up to the date of 25 February 2019 indicated above, there was a Remuneration Committee; we would like to thank this Committee for the important role it played in defining the remuneration policy, which was then refined, assessed and revised by the new Committee set up in February 2019.

b. Mode of operation

The Committee shall meet as often as is appropriate for the proper performance of its functions and tasks. The Chairman chairs the meetings of the Committee, prepares its work, directs, coordinates and moderates the discussion. Minutes of the meetings are regularly taken and the Chairman provides information at the earliest meeting of the Board of Directors.

For meetings to be valid, a majority of members is required and decisions/resolutions are taken by a majority of those present.

The chairman of the Board of Statutory Auditors or another statutory auditor designated by him/ her participates in the work of the Committee; the Chairman of the Board of Directors, the Vice Chairman and the CEO, the other members of the Board of Directors, the executives in charge of the various functions and any other person whose presence is deemed to assist in the best performance of the Committee's functions with regard to all or some of the items on the agenda may also participate, upon the invitation of the Committee.

The Committee has the right of access to the information and company functions necessary for the performance of its duties and may engage external consultants within the limits set out by the Board of Directors. The Company makes available to the Committee the appropriate financial resources to carry out its tasks within the limits of a budget approved by the Board of Directors on the basis of a reasoned proposal by the Committee, which defines its size annually. No director attends the Committee's meetings at which proposals concerning his or her remuneration are submitted to the Board of Directors, except in the case of proposals concerning all members of committees established within the Board of Directors.

c. Role and powers of the Committee

In line with the Corporate Governance Code, the Committee plays a pivotal role in the process of defining and governing the remuneration policies of Nexi and the Companies directly controlled by Nexi. The Committee assists the Board of Directors by carrying out investigative, propositive and consultative functions with regard to assessments and decisions concerning the policy for the remuneration of

Directors and Executives with Strategic Responsibilities. In particular, the Committee: • makes proposals to the Board of Directors regarding the remuneration of Directors and Executives with Strategic Responsibilities, for the latter with the involvement of the CEO;
periodically assesses the adequacy, overall consistency and concrete application of the policy for the remuneration of Directors and Executives with Strategic Responsibilities adopted by the Company, making use, in this regard, of the information provided by the CEO, making proposals on the subject to the Board of Directors, if necessary;
examines in advance the Remuneration Report, to be made available to the public for the Annual General Meeting;

11 The Corporate Governance Code for listed companies approved by the Corporate Governance Committee and promoted by Borsa Italiana, ABI, Ania, Assogestioni, Assonime and Confindustria to which Nexi adheres (hereinafter the "Corporate Governance Code").

submits proposals or expresses opinions to the Board of Directors on the remuneration of executive directors and other directors holding particular offices and of Executives with Strategic Responsibilities, as well as on the setting of performance objectives related to the variable component of such remuneration;
monitors the application of the decisions taken by the Board of Directors, verifying, in particular, the actual achievement of the performance objectives related to the variable component of remuneration; and
makes proposals to the Board of Directors regarding the adoption of remuneration policies and/or incentive systems applicable also to directors, managers and employees within the Group.

The Chairman of the Committee reports to the Board of Directors on the activities carried out by the Committee.

d. Meetings held and annual cycle of activities

The Committee met 5 times from the date of commencement of trading on the MTA (Online Stock Market) (16 April 2019) until 31 December 2019. For the sake of thoroughness, please note that - prior to 16 April 2019 - the Committee met 4 times. Overall, the average attendance of meetings during 2019 was 90%. The meetings were always attended by the Chairman of the Board of Statutory Auditors or one permanent statutory auditor and, each time, by the statutory auditors designated by him. Below are the main matters addressed by the Committee during 2019.

TOPIC	DATE	MATTERS IN DETAIL
Remuneration policy of Nexi and the companies	15-Jan	• Short-term variable incentive plan (MBO), including control functions: approach, beneficiaries, scheme, and operating mechanisms
directly controlled by Nexi	31-Jan	• Long-term variable incentive plan (LTI): approach, beneficiaries, scheme, and operating mechanisms • Remuneration short-term policy of Nexi and the companies directly controlled by Nexi: remuneration policies, short- and long-term incentive plans and other remuneration instruments (severance payments, non-competition agreements and entry bonus) • Analysis of the remuneration benchmarks of the CEO/GM and his first line • Remuneration for the CEO/GM • MBO objectives for the CEO/GM and the Heads of control functions
New Committee	25-Feb	Creation of a new Remuneration and Appointments Committee
Governance of the Remuneration and Appointments Committee Composition/ emoluments of the Board of Directors and Board of Statutory Auditors	08-Mar	• Rules of the Remuneration and Appointments Committee • Composition of the Board of Directors of the companies directly and indirectly controlled by the Parent Company and related emoluments • Composition of the Board of Statutory Auditors and related emoluments • Members of the Remuneration and Appointments Committee • Calendar of meetings of the Remuneration and Appointments Committee for the year 2019 and definition of the related topics
Implementation of the 2018 Remuneration Policy Assignment of MBO objectives to CEO/GM and control functions	19-Mar • Verification of the implementation of the 2018 remuneration policy, with reference to the remuneration policies for the first lines of the CEO/GM and calculation of the MBO for the CEO/GM and its first lines • Examination of the final statement of the Company's 2018 results for the purposes of the short-term incentive plans and the productivity bonus (VAP)
Regulation of the long-term incentive plan - LTI	19-Apr	• Regulation of the long-term incentive plan (LTI): - Financial KPIs and calculation mechanisms - Legal and fiscal aspects and budget
Regulation of the short-term incentive plan (MBO)	06-May	• Regulation of the short-term incentive plan (MBO): details of the type of objectives with reference to the commercial structure and the personnel responsible for offering products to customers (Provisions on Transparency) and operating rules (e.g. treatment in case of new hiring, )

TOPIC	DATE	MATTERS IN DETAIL
2020 Annual cycle of activity of the Remuneration and Appointments Committee	19-Sept	• Annual cycle of activity of the Remuneration and Appointments Committee. For Q4 2019 and Q1 2020, focus on: - Board Evaluation and Succession Planning - Revision and refinement of the remuneration policy and regulation of short- and long-term incentive plans - AoB: revision of the LTI assignment criteria for new hires.
Board Evaluation	24-Oct	• Board Evaluation: selection of the consulting firm to be entrusted with the task
Analysis of the remuneration policy of Nexi and the companies directly controlled by Nexi	25-Nov	• Revision of the remuneration policy on the basis of recommendations by external advisors for Corporate Governance Advisory12 and Compensation/Benefit & Executive Remuneration13 matters, respectively, in order to receive appropriate recommendations in view of the 2020 meeting season • Succession planning: selection of the consulting firm to be entrusted with the task

The following diagram illustrates the annual cycle of activity of the Remuneration and Appointments Committee:

12 Morrow Sodali S.p.A.

13 Mercer Italia of the Marsh&McLennan Group

CEO and other relevant functions

The CEO makes proposals to the Committee regarding the remuneration of Executives with Strategic Responsibilities and is involved by the Committee in the remuneration policy decisions concerning these individuals.

The Chief Administrative Officer (CAO) structure starts the remuneration policy process, supports the Committee in the operational management of meetings, providing technical support - also in terms of reporting - and prepares the material for the definition of remuneration policies. In addition, together with the competent corporate functions, it contributes to the identification, monitoring and subsequent final calculation of the economic-financial objectives linked to the short-term incentive (MBO) and long-term incentive (LTI) plans and prepares the documentation for the implementation of the remuneration policy (e.g. incentive plan rules).

The entire process of identifying and calculating the quantitative objectives of the incentive plans is carried out with the support of the Chief Financial Officer (CFO) function.

The control functions are involved and collaborate in various ways in the definition and implementation of the remuneration policy and/or subsequent verification of the correct implementation of remuneration policies. In particular:

The Compliance & Anti Money Laundering (AML) function verifies that the remuneration policy is in line with the applicable remuneration provisions with reference to the supervised companies present within the Group and ensures that the company's conduct complies with the relevant regulatory framework.
The Risk Management function verifies that the remuneration policy (in particular with regard to short- and long-term variable incentives) is consistent with the company's operations and risk profiles.

The aforementioned functions examine the remuneration policy ex ante, each for the matters falling within their respective responsibilities, with a view to submitting it to the resolution of the Shareholders' Meeting.

Finally, the Audit function oversees the entire process of identifying and calculating the quantitative objectives of short- and long-term variable incentive plans and verifies the correct settlement of fixed and variable components, in line with the approved remuneration policy.

The above functions report to the relevant bodies on the results of the checks carried out, indicating corrective measures, if necessary.

1.2. The remuneration policy approval process

The remuneration policy regarding the Board of Directors, Board of Statutory Auditors and Executives with Strategic Responsibilities, on the proposal of the Committee, was approved by the Board of Directors on 6 March 2020, at the same time as the approval of this Report. The Board of Directors submits it to the vote of the Shareholders' Meeting which approves Section I of this Report with a binding vote and Section II with a consultative vote.

Consistent with the applicable laws and regulations on this matter and with the guidelines of the Corporate Governance Code, the process of approving the remuneration policy consists of the following steps and involves the bodies and persons indicated below:

2. Purposes, principles and instruments

The remuneration policy was approved by the Board of Directors on the proposal of the Remuneration and Appointments Committee and defined in accordance with the recommendations of the Corporate Governance Code and in compliance with applicable laws and regulations for listed companies14. Pursuant to the new art. 123-ter of the TUF, the policy contributes to the company's strategy, the pursuit of long-term interests and the sustainability of the Company and illustrates the way in which it makes this contribution.

2.1. Purposes

The remuneration policy reflects and supports Nexi's business strategy and values, with the aim of strengthening its leadership in the management and development of resources among listed companies, with a particular focus on the hi-tech sector. The remuneration policy has the following purposes:

To create lasting value for shareholders, while also respecting the interests of our customers and employees;
To pursue and guarantee a sustainable growth of the organization in the medium-long term, in line with the guidelines of the Company's strategic business plan, through a conscious management of business risks;
To attract, motivate and retain people whose aptitudes, passions, skills and experience are a key factor in Nexi's success; and
To develop a culture of recognition of merit, through remuneration systems linked to the results achieved in the short and medium term, as well as to the behaviours put in place.

14 Art. 123 ter of the TUF. Art. 84-quater of the Issuers' Regulation and related Annex 3A, Schedules 7-bis and 7-ter.

2.2. Principles

The remuneration policy is based on the following principles that guide remuneration programmes and subsequent actions:

• Alignment with values and business strategy

The approach of a balanced remuneration package between fixed and variable remuneration is considered a key driver for the alignment with Nexi's objectives and behaviours put in place. In particular, variable incentive systems represent a fundamental instrument in driving performance and impact on company results: they are structured so that the targets and measurement metrics are consistent with business objectives in the short and long term.

• Performance

Remuneration policies have a direct link with performance and people's contribution to sustainable business results according to a meritocratic approach, particularly rewarding top performers.

We assess the performance of our employees according to explicit and defined criteria (WHAT and HOW):

WHAT: clear and measurable qualitative and quantitative, individual and company objectives. HOW: behaviours put in place in line with company values.

We expect at least one feedback session to facilitate alignment with the expected targets and possible corrective actions.

• Competitiveness and fairness

The remuneration package in all its elements is consistent with the role and responsibilities assigned, at all levels of the company. We weigh company roles in terms of impact and responsibility in accordance with a codified and internationally recognised system (banding) to ensure a consistent and fair approach to the role held. We carry out external benchmarking - including benefits - with the relevant peer groups, both in terms of pay-mix and salary levels, with the support of an independent external consulting firm. We constantly monitor market practices against which we measure ourselves, both nationally and internationally; the objective is to ensure that remuneration decisions are made effectively to ensure that remuneration packages are competitive to attract and retain key competencies, and to ensure internal fairness.

• Transparency and communication

The criteria for remunerating our people are clear and transparently communicated to shareholders, employees and outsiders.

2.3. Instruments and recipients

The purposes and principles set out above are reflected in the key elements of the remuneration of executive directors and directors holding special offices and of Executives with Strategic Responsibilities, as illustrated below:

KEY ELEMENTS OF REMUNERATION
FIXED COMPONENT	VARIABLE COMPONENT		WELFARE & BENEFITS	OTHER INSTRUMENTS
Fixed salary	Short-term incentive MBO	Long-term incentive LTI	Welfare program and benefits	Severance payments/ Non-competition agreements/D&O Policy

Fixed component of remuneration

This is the fixed salary, commensurate with the role held and responsibilities assigned, also taking into account the experience, skills and contribution required. It is sufficient to remunerate performance if the variable component is not paid and can be adjusted over time. For these purposes, Nexi, with the support of independent external consultants, constantly monitors market practices and remuneration benchmarks both in terms of pay-mix and salary. With reference to the CEO/GM and Executives with Strategic Responsibilities, comparisons have been made with similar roles in Italian industrial groups, selected within the FTSE MIB Index, with a focus on the high-tech, services and banking sectors.

For non-executive directors, remuneration is limited to the fixed component only, in line with the guidelines of the Corporate Governance Code, and no form of variable remuneration linked to the achievement of performance objectives is envisaged.

EMOLUMENTS
Fixed component of remuneration	Recipients
Pursuant to Art. 2389 Civil Code paragraph 1	Non-executive directors
Pursuant to Art. 2389 Civil Code paragraph 3	Directors holding special offices: • Non-executive Chairman • Non-executive Vice Chairman
Remuneration for participation in the Internal Board Committees	• Non-executive Directors
FIXED SALARY
Fixed component of remuneration	Recipients

Fixed component of remuneration	Recipients
Gross Base Salary (RAL)	• CEO and General Manager • Executives with Strategic Responsibilities

With regard to the Board of Statutory Auditors, the members receive an annual emolument, defined by the Shareholders' Meeting. In accordance with the role and responsibilities of this body, members of the Board of Statutory Auditors are not entitled to receive any variable remuneration.

EMOLUMENTS OF MEMBERS OF THE BOARD OF STATUTORY AUDITORS
Fixed component of remuneration	Recipients
Emoluments	• Chairman of the Board of Statutory Auditors • Members of the Board of Statutory Auditors

Variable component of remuneration

The variable component of remuneration is defined through short-term (MBO) and medium/ long-term (LTI) incentive plans.

These incentive plans are associated with pre-determined, complementary and measurable objectives linked to the achievement of economic, operating, financial and non-financial results in a rolling logic consistent with Nexi's budget, strategic plan and the interests of shareholders.

	SHORT-TERM INCENTIVE PLAN - MBO (Management By Objectives)	LONG-TERM INCENTIVE PLAN - LTI (Long Term Incentive)
Definition	Variable incentive system based on the results achieved over the year, against set objectives (company, specific and individual). The achievement of the objectives is linked to economic/monetary incentives, paid within the first half of the fiscal year following the relevant year.	Variable incentive system that provides for the assignment of rights to receive ordinary shares of Nexi SpA, free of charge, to a selected panel of employees of the Company, over a medium-long term (three years), vesting of which is conditioned by the achievement of set objectives.
Purposes	• To guide company performance in the short term by identifying objectives aligned with the Company's strategy, budget and annual business plans; • To orient and focus people on business priorities while respecting the principles of mitigation of major risks	• To guide company performance in the medium/long term by aligning management's behaviour with company strategy and create value for stakeholders; • To retain key people in the Company with high-impact roles for the organisation and who have relevant skills that can represent a competitive advantage for the Company.
Beneficiaries	• CEO/GM • According to banding and role (sales area).	• CEO/GM • Selected panel of employees with open-ended contracts identified according to banding15 and performance16 criteria

These incentive plans are governed by specific rules that are consistent and compliant with the applicable laws and regulations.

In compliance with the risk mitigation principles, these incentive plans provide for:

specific entry gates below which no disbursement/ vesting can take place;
maximum incentive levels, linked to the actual achievement of performance conditions;
malus clauses that allow for the reduction or non-payment of the variable component in the event of conduct during employment period that has caused or may cause serious damage or significant loss to Nexi or other Group companies;
clawback clauses that allow for the total or partial return of the variable component in the event of a breach of the rules set out in Article 114-quinquies.3 of the TUB; of conduct during employment period that has caused or may cause serious damage or significant loss to Nexi or other Group companies; or payment of the variable component on the basis of data that proved to be manifestly incorrect.

In view of the three-year horizon of Section I of this Report, with reference to the long-term variable incentive (LTI), the Company will consider defining and implementing a new plan with effect from 2022, the year from which the current plan will no longer be in force.

Benefits

Benefits are an important component of the remuneration package as a complement to the other remuneration elements, in a broader logic of sustainable welfare (referred to in the dedicated section in paragraph 3.5). They differ according to the category of beneficiaries and type; they are aligned with market practices, consistent with the applicable laws and regulations and with the provisions of the collective bargaining agreements in force.

Other instruments

Severance payments and non-competition agreements are instruments designed to protect the Company from potential risks of litigation and/or competition in cases of termination of employment. These treatments are consistent with the remuneration received, in line with the recommendations set out in the Corporate Governance Code and consistent with the provisions of law and the applicable collective bargaining agreements.

The CEO and General Manager and Executives with Strategic Responsibilities are not entitled to receive discretionary one-off bonuses.

16 Evaluation of our employees according to explicit and defined criteria (WHAT and HOW).

¹⁵ An internationally codified and recognized system to weigh corporate roles in terms of impact and responsibility.

OTHER INSTRUMENTS
Componente	Destinatari
Severance payments	• CEO and General Manager • Executives with Strategic Responsibilities on an individual basis
Non-competition agreements	• Executives with Strategic Responsibilities on an individual basis
One-off Bonus	• Not applicable to CEO/GM and Executives with Strategic Responsibilities

For all other people, in order to strengthen their commitment and increase the possibility of retention, one-off bonuses may be granted, within the limits of what is approved in the budget, in the following cases:

to recognize high performance and particularly significant results for the year, as part of the annual remuneration review process; and
to reward the additional contribution made in relation to the ordinary work activity in the case of special projects; these are absolutely exceptional cases, for amounts below the fixed annual salary, in any case linked to the beneficiary's stay in service for a certain period.

A D&O17 policy is guaranteed for members of the Board of Directors, CEO and General Manager, Executives with Strategic Responsibilities and members of the Board of Statutory Auditors.

3. Remuneration policy

This chapter details Nexi's three-year remuneration policy for members of the Board of Directors, the CEO and General Manager, Executives with Strategic Responsibilities and members of the Board of Statutory Auditors, as approved by the Board of Directors on 6 March 2020. This policy takes into account market practices and external benchmarking with reference peer groups, both in terms of pay-mix and remuneration levels, carried out with the support of an independent external consulting firm18.

3.1 Board of Directors

Chairman of the Board of Directors

The remuneration of the non-executive Chairman of the Board of Directors provides for the payment of only the fixed component, in the form of a total gross annual remuneration of €300,000, with reference to the 2019-2021 mandate. This remuneration includes the emolument pursuant to article 2389, paragraph 1, of the Italian Civil Code approved by the Shareholders' Meeting for the office of Director. The non-executive Chairman also receives an additional emolument of €10,000 as a member of the Strategic Committee.

There is a reimbursement, on submission of receipts and invoices, for expenses incurred in the performance of the function. A Directors & Officers (D&O) policy is also guaranteed.

Vice Chairman of the Board of Directors

The remuneration of the non-executive Vice Chairman provides for the payment of only the gross annual fixed component of €150,000. This remuneration includes the emolument pursuant to article 2389, paragraph 1, of the Italian Civil Code approved by the Shareholders' Meeting for the position of director. The Vice Chairman also receives an additional emolument of €10,000 as a member of the Strategic Committee.

There is a reimbursement, on submission of receipts and invoices, for expenses incurred in the performance of the function. A D&O policy is also guaranteed.

¹⁷ Directors & Officers: "Civil liability policy for the Board of Directors and Board of Statutory Auditors of the Company"

¹⁸ Mercer Italia of the Marsh&McLennan Group

Non-executive directors

The other non-executive/independent directors receive only the fixed component, divided between an annual fee, approved by the Shareholders' Meeting in the amount of €50,000 gross per year for the 2019-2021 term of office, and an additional fee for participation in the Internal Board Committees, determined by the Board of Directors for the 2019-2021 term of office as follows:

Chairman: €25,000
Directors: €10,000

In line with the recommendations of the Corporate Governance Code, non-executive directors are not eligible to participate in variable incentive plans linked to performance objectives. There is also no distinction in terms of remuneration between directors who meet the independence requirement and those who are not independent.

There is a reimbursement, on submission of receipts and invoices, for expenses incurred in the performance of the function. A D&O policy is also guaranteed.

3.2 CEO and General Manager

Remuneration for the role of CEO and General Manager includes a fixed component, a variable component (short- and long-term incentives), benefits and severance payments.

The short- and long-term variable components closely linked to the business plan constitute a significant part of the pay-mix in order to recognize and enhance the results achieved in a sustainable way over time, aligning management's behaviour with the company strategy, creating value for stakeholders.

The directorship and employment relationships are inseparable: therefore, the termination of the employment period will also result in the termination of the offices and powers of CEO and vice versa.

The remuneration package assigned to the General Manager as an employee, which is described below, also remunerates for the position of CEO of Nexi and any other position, assignment of powers and/or responsibilities assumed during the relationship, for which the CEO and General Manager does not receive any further remuneration.

Fixed remuneration

The fixed remuneration for the position of General Manager was resolved by the Board of Directors and is €1,200,000 per year, with effect from 1 April 2019.

Short-term variable remuneration - MBO

The CEO and General Manager, as General Manager, is the beneficiary of the short-term variable incentive plan (MBO) approved by the Board of Directors on the proposal of the Remuneration and Appointments Committee.

With reference to the variable incentive plan - MBO -, the general scheme of the incentive instrument applicable at company level is illustrated below.

a. Beneficiaries

• Beneficiaries are identified according to banding and role (sales area)

b. Purposes

To guide the Company's performance in the short term, by identifying objectives aligned with the Company's strategy, budget and annual business plans.
To orient and focus people on business priorities while respecting the principles of mitigation of major risks.

c. Structure

There is an entry gate, below which no MBO disbursement takes place. This is represented by the achievement of at least 85% of the Group's EBITDA target value. Likewise, no MBO is disbursed if the individual targets (referred to in the following point) assigned are not achieved.
In line with the Company's strategic drivers focused on profitable growth, innovation and technological/digital transformation, operational excellence, people and value creation, the MBO scheme sets out pre-determined, measurable and complementary economic-financial and non-financial objectives (linked to strategic projects and sustainability) according to the following types:
- company objectives (e.g. Group EBITDA)
- specific objectives by Business Unit and Area (where applicable), and
- individual objectives.
Each objective is associated with a Key Performance Indicator (KPI) and a percentage weight differentiated according to the role held and responsibilities assigned.

The current MBO scheme19 for the CEO/GM is shown below:

19 With reference to the definitions of the KPIs relating to Net Promoter Score, IT Transformation and Engagement Index, please refer to note 8.

• Group EBITDA and People Value are also common objectives for all Executives with Strategic Responsibilities.

d. Target incentive and operating mechanisms

The target incentive is the amount of the MBO bonus payable upon achievement of the set objectives; it is equal to a percentage of Gross Base Salary ("RAL") and is differentiated according to the role held and responsibilities assigned: for the CEO/GM it is equal to 130% of the RAL.
The maximum MBO bonus payable cannot exceed 200% of the target incentive.
For each objective and its KPI, the expected objective and the range within which the objective is considered not achieved (minimum value) or achieved at the maximum level (maximum value) is defined.

If the level of achievement of the objective is equal to, or lower than the minimum value, the payout (amount of the incentive paid to the target) is equal to zero; if the level of achievement of the objective is equal to the target, the payout is equal to 100% of the target incentive; if the level of achievement is equal to, or higher than the maximum value, the payout is equal to 200% of the target incentive.

The following example scheme applies to the CEO/GM:

• With particular reference to the Group EBITDA, the range of achievement of the objectives is between 90% and 105% according to an asymmetrical linear curve and provides for a different payout depending on the level of achievement of the objective. Below is the overall MBO of the CEO/GM with its objectives, KPIs, weights and range of

achievement.

e. Malus and clawback clauses

There are specific malus and clawback clauses:

Malus clauses: they allow the variable component to be reduced or not to be paid in the event of conduct during the employment period, which has caused or may cause serious damage or significant loss to Nexi or other Group companies; and
Clawback clauses: they allow for the total or partial restitution of the variable component in the event of a breach of the provisions set out in article 114-quinquies.3 of the TUB; or of conduct during the employment period, which has caused or may cause serious damage or significant loss to Nexi or other Group companies; or payment of the variable component on the basis of data that has proven to be manifestly incorrect.

f. Effects of termination of employment period

• Payment of the MBO bonus is subject to the beneficiary's employment relationship being in force at 31 December of the relevant year. In the absence of this condition, no bonus is paid, even if the company and individual objectives are achieved. With regard to the CEO/GM, in the event of termination of employment during the year without just cause or in the event of resignation for just cause, the MBO bonus is paid on a pro-rata temporis basis.

Long-term variable remuneration - LTI

The CEO and General Manager, as General Manager, is a beneficiary of the Long-Term Incentive Plan (LTI) approved by the Board of Directors on the proposal of the Remuneration and Appointments Committee.

With reference to the Long-Term Incentive Plan (LTI), the general scheme applicable at company level is illustrated below.

a. Purposes

To guide the Company's performance in a sustainable way in the medium/long term, aligning management's behaviour with the company strategy and creating value for stakeholders.
To retain key people in the Company who hold high-impact roles for the organization and who have relevant skills that can represent a competitive advantage for the Company.

b. Beneficiaries

Beneficiaries of the plan are a selected panel of employees hired on open-ended contracts, identified according to the criteria of banding and performance.

c. Features for CEO/GM and Executives with Strategic Responsibilities

The plan:
provides for the assignment of rights to receive a certain number of ordinary shares of Nexi S.p.A. free of charge to a selected panel of employees of the Company (with an open-ended contract according to banding and performance criteria), over a medium/long-term period (three years). The shares assigned are Performance Shares, i.e. ordinary shares of the Company, ownership of which is transferred to the employee upon achievement of pre-determined company performance objectives over a specific period of time;
is for a three-year period and provides for the assignment of rights to receive Nexi S.p.A. shares on an annual basis;
provides for a vesting period of 3 years, with transfer/vesting of shares in rolling mode;
provides for a holding period, a further period of non-trading of financial instruments after the expiry of the vesting period, equal to one year for 50% of the number of shares transferred;

d. Structure and operating mechanisms

There is an entry gate, below which no transfer/vesting of shares is envisaged: the actual Cumulative Operating Cash Flow must be at least 80% of the target Operating Cash Flow.
In line with the Company's strategic drivers, the Key Performance Indicators (KPIs) that influence the vesting of the Performance Shares are as follows:
- Relative Total Shareholder Return
- Cumulative Operating Cash Flow

RELATIVE TOTAL SHAREHOLDER RETURN
DEFINITION AND CALCULATION MECHANISM	• The Relative Total Shareholder Return (Relative TSR) is the difference between the actual TSR and the benchmark. • The actual TSR, i.e. the total return on investment for the shareholder, is an indicator that measures the creation of value for the shareholder and is calculated by adding to the change in the share price during the vesting period the effect of dividends per share paid during the same period, according to the following formula:
	(Final Price - Initial Price + Dividends) TSR = Initial Price
	• The benchmark is constructed on the basis of the following indices, with the same percentage weight (33%), identified by sector: • Global Digital Payments Infrastructure Index21; • EURO STOXX Technology22; • Index of the Italian Stock Exchange FTSE MIB. The benchmark is calculated as the arithmetic mean of the percentage change in the above-mentioned indices during the vesting period.
LEVEL OF ACHIEVEMENT OF THE OBJECTIVE	The amount of Performance Shares assigned is calculated according to the following table, with an achievable cap of 200%. Relative TSR Performance Shares From To From To -10% 0% 0% 100% 0% +20% 100% 200% (cap) For performance indicator values within one of the ranges shown in the table above, the number of Performance
	Shares will be determined by linear interpolation between the extremes of that range.

	CUMULATIVE OPERATING CASH FLOW
DEFINITION	• The amount of Performance Shares allocated is calculated according to the following table, with an achievable cap of 200%.
	OCF = EBITDA - CAPEX - Transformation Costs 23
	• The target OCF is the sum of the OCFs provided in the annual budgets of the vesting period. • Relative OCF = percentage change (Δ%) between the Cumulative OCF and the Target OCF
LEVEL OF ACHIEVEMENT OF	• The amount of Performance Shares allocated is calculated according to the following table, with an achievable cap of 200%.
THE OBJECTIVE	∆% OCF Cumulative Performance vs Target Shares
	From To From To
	-10% 0% 0% 100%
	0% +7% 100% 200% (cap)
	For performance indicator values within one of the ranges shown in the table above, the number of Performance Shares will be determined by linear interpolation between the extremes of that range.

The amount of Performance Shares vested at the end of the vesting period will be determined using the methods set out above, applied independently:
- for 50%, the amount allocated will be defined through the Relative TSR KPI; and
- for 50%, the amount allocated will be defined through the Relative OCF KPI.
The amount of the Performance Shares is equal to the sum of each amount defined by the aforementioned KPIs and the maximum payout can be 200% of the rights assigned.
The amount of the number of rights, with reference to the CEO/GM is 130% of the RAL.

²¹ It is a proprietary, regulated, market capitalization-weighted index of companies active in the electronic transaction market that facilitate the efficiency, speed and management of such transactions. The index includes companies whose main activity includes: credit card networks, electronic transaction processing and related products, services and software (payments Fintech).

²² It is a Eurozone stock index created in 1998 by STOXX Limited and includes a representation of the main industrial sectors in the area. The index includes 19 macro sectors (including Technology) defined according to the Industry Classification Benchmark (ICB): companies are classified according to their primary source of revenue..

²³ Transformation Costs: non-recurring costs related to the Group's transformation programme from 2016.

Di seguito lo schema LTI per l'AD/DG:

g. Malus and clawback clauses

There are specific malus and clawback clauses:

Malus clauses: they allow not to allocate or to reduce the number of shares in the event of conduct during the course of the employment relationship, which has caused or may cause serious damage or significant loss to Nexi or other Group companies; and
Clawback clauses: they allow for the total or partial return of the shares or their economic value to be claimed in the event of a breach of the provisions set out in article 114-quinquies.3 of the TUB; or of conduct during the course of the employment relationship, which has caused or may cause serious damage or significant loss to Nexi or other Group companies; or assignment of the shares on the basis of data that has proved to be manifestly incorrect.

h. Effects of termination of employment

The allocation of shares is subject to the continuation of the employment relationship until the date of delivery of the share allocation letter, and provided that no notice period following resignation or termination is under way at that date. If the employment is terminated before that date:

for beneficiaries classified as good leavers the allocation of the Shares will be made on a pro-rata temporis basis; and;
beneficiaries classified as bad leavers will automatically lose all rights under the plan and will not receive any share.