Remuneration of key management personnel

Specifically, article 229.1f) of the Corporate Enterprises Act establishes that Board members may not carry out – on their own behalf or on the behalf of others – activities which actually or potentially constitute effective competition with those carried out by the Company or which, in any other way, permanently conflict with the Company's interests. Article 230 of the Corporate Enterprises Act stipulates that this prohibition can be lifted if the Company is not expected to incur damages or it is expected that it will be indemnified for an amount equal to the benefits expected to be obtained from the exemption. Express and separate approval of the exemption must be obtained from shareholders at the Annual General Meeting.

In this regard, Ignacio Garralda was appointed proprietary director at the Annual General Meeting of 6 April 2017, representing the shareholder Mutua Madrileña Automovilista, Sociedad de Seguros a Prima Fija (“Mutua Madrileña”). Mr Garralda is Chairman and CEO of Mutua Madrileña, the parent of a business group which, much like the CaixaBank Group, operates in numerous sectors of the insurance universe, with a presence also in pension fund management, investment fund management and the real estate business. Both entities maintain their strategic alliance through SegurCaixa Adeslas, a company owned by Mutual Madrileña (50%) and the CaixaBank Group (49.92%) and engaged in the exclusive development, marketing, sale and distribution of general insurance products in Spain, this despite the fact that Mutual Madrileña competes with SegurCaixa Adeslas in all insurance sectors except Health. This situation is expressly addressed in the Shareholders' Agreement signed by both companies.

In view of the scant relevance of the level of competition between both groups in the insurance, pension fund and investment fund management, and real estate business sectors – which, after reviewing the situation, is the case to this date – and of the advantages that Mr Garralda would contribute to the CaixaBank Board of Directors arising from his long-standing experience and qualifications, in addition to facilitating greater development of the current strategic alliance between both groups, a motion was laid before the Annual General Meeting of 6 April 2017 agreeing to exempt him from the non-competition obligation set out in article 229.1 f) of the Spanish Corporate Enterprises Act, and allowing him, within the framework provided, to hold office and discharge functions at companies belonging to the group at which Mutua Madrileña is the parent and in direct and indirect investee companies of Mutua Madrileña that arise from the interest or the discharge of functions in Mutua Madrileña. Similarly, within the scope of the exemption, the Board of Directors approved a specific protocol to ensure that CaixaBank is not exposed to any damage as a result of the exercising of his duties as a board member, which is subject to monitoring by the Company.

Meanwhile, Marcelino Armenter was appointed a proprietary director in the Annual General Meeting of 5 April 2019, representing the shareholder Fundación Bancaria Caixa d’Estalvis i Pensions de Barcelona, 'la Caixa” and Criteria Caixa, S.A.U. (CriteriaCaixa). From January 2017 to November 2019, Mr Armenter was a member of the Board of Directors of Grupo Financiero Inbursa, a Mexican company specialised in providing financial services, primarily in Mexico. Therefore, at the time of his appointment as director of CaixaBank, Mr Armenter was a non-executive proprietary director of Grupo Financiero Inbursa. He was appointed at the proposal of CriteriaCaixa, as the latter holds a significant stake in Grupo Financiero Inbursa. CaixaBank has entered collaboration agreements with Grupo Financiero Inbursa, whereby both entities act directly in geographic areas that do not overlap, but rather complement one another. Despite considering that Mr Armenter's roles and functions in Grupo Financiero Inbursa did not represent effective competition with the Company, given that article 229 of the Corporate Enterprises Act refers to 'potential' competition, to avoid any risk of not adhering to the terms of said Act and, insofar that there was no reason to expect any damage for the Company and that his incorporation into the CaixaBank Board of Directors would provide relevant benefits derived from his vast experience and qualifications in the banking sector, another motion was laid before the Annual General Meeting to, as well as appoint Mr Armenter as a director, agree to exempt him from the non-compete obligation established in article 229.1.f) of the Corporate Enterprises Act, allowing him to hold office and discharge any roles and positions in Grupo Financiero Inbursa. This proposal was approved at the General Meeting held on 5 April 2019.