4.1 Appointment of Mr Emilio Saracho Rodríguez de Torres, as executive director.

Transcription

1 Proposal of the Board of Directors of Banco Popular relating to the proposals to appoint and ratify Directors subject to item Four of the Agenda of the Extraordinary General Shareholders' Meeting to be held in Madrid on 19 February 2017, at first call, or on 20 February 2017, at second call. 1. Wording of item four on the Agenda 4 Appointment and ratification of directors. 4.1 Appointment of Mr Emilio Saracho Rodríguez de Torres, as executive director. 4.2 Ratification of the appointment of Mr Pedro Larena Landeta, as executive director. 4.3 Ratification of the appointment of Mr Jaime Ruiz Sacristán, as proprietary director. 2. Subject-matter of the report prepared by the Board of Directors. Article 529 decies of the Corporate Enterprises Act, in the drafting given by Law 31/2014 of 3 December, and Article 25 of the Regulation of the Board of Directors of Banco Popular, establish that the proposal to appoint or reappoint member of the Board of Directors corresponds to the Appointments, Governance and Corporate Responsibility Committee, in the case of independent directors, and the Board of Directors itself, in other cases. Such proposals must be accompanied in all cases by a report from the Board setting out the competence, experience and merits of the proposed candidate. The proposed appointment or reappointment of any non-independent director must also be preceded by a report from the Appointments, Governance and Corporate Responsibility Committee. The Board of Directors of Banco Popular has prepared this proposal in compliance with the provisions of the abovementioned articles. 3. Justification for the proposed agreement. The Board of Directors has evaluated the Report made by the Appointments, Governance and Corporate Responsibility Committee in accordance with Section 529 decies of the Corporate Enterprises Act, having analysed the current composition of the Board and its needs

2 evaluating the conditions that must be fulfilled by the Directors to perform their duties, and the dedication required to perform their tasks adequately. As a result of the above and in accordance with the positive report issued for this purpose by the Appointments, Governance and Corporate Responsibility Committee, which is attached as an Appendix, and which the Board of Directors accepts fully, the Board of Directors has assessed the competence, experience and merits of each candidate proposed, in the terms indicated below. Proposal for the appointment of Mr Emilio Saracho Rodríguez de Torres as Executive Director and Chairman. In accordance with the report made by the Appointments, Governance and Corporate Responsibility Committee, the Board of Directors considers that Mr Emilio Saracho Rodríguez de Torres has the requisite skills, experience and merit to hold the position of Executive Director and Chairman, as he meets the requirements established under Article 529 duodecies 1) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors. Proposal for ratification of Mr Pedro Larena Landeta, as Executive Director. In accordance with the report made by the Appointments, Governance and Corporate Responsibility Committee, the Board of Directors considers that Mr Pedro Larena Landeta has the requisite skills, experience and merit to hold the position of Executive Director, as he meets the requirements established under Article 529 duodecies 1) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors. Proposal for the ratification of Mr Jaime Ruiz Sacristán as Proprietary Director. In accordance with the report made by the Appointments, Governance and Corporate Responsibility Committee, the Board of Directors considers that Mr Jaime Ruiz Sacristán has the requisite skills, experience and merit to hold the position of Proprietary Director, as he meets the requirements established under Article 529 duodecies 3) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors. 4. Favorable report for the proposed agreement.

3 Once the corresponding analysis has been completed and the favorable report formulated by the Appointments, Governance and Corporate Responsibility Committee, the Board of Directors approves this report and the proposals for the appointment of Mr. Emilio Saracho Rodríguez de Torres as executive director and the ratification of Mr. Pedro Larena Landeta, as executive director, and Mr. Jaime Ruiz Sacristán, as a proprietary director (the last two initially appointed by co-optation by the Board of Directors), for the four-year term established in the Bylaws, for submission to The Extraordinary General Meeting of Shareholders, in accordance with the provisions of article 529 decies of the Capital Companies Act.

4 Report made by the Appointments, Governance and Corporate Responsibility Committee in relation to the appointment and ratification of the Directors of Banco Popular, to be submitted as item Four on the Agenda of the Extraordinary General Shareholders' Meeting to be held in Madrid on 19 February 2017, at first call, or on 20 February 2017, at second call. I.- Subject-matter of the report prepared by the Board of Directors. Article 529 decies of the Corporate Enterprises Act, in the drafting given by Law 31/2014 of 3 December, and Article 25 of the Regulation of the Board of Directors of Banco Popular, establish that the proposal to appoint or reappoint member of the Board of Directors corresponds to the Appointments, Governance and Corporate Responsibility Committee, in the case of independent directors, and the Board of Directors itself, in other cases. Such proposals must be accompanied in all cases by a report from the Board setting out the competence, experience and merits of the proposed candidate. The proposed appointment or reappointment of any non-independent director must also be preceded by a report from the Appointments, Governance and Corporate Responsibility Committee. To comply with the provisions of the article referred to above, the Appointments, Governance and Corporate Responsibility Committee of Banco Popular has drafted this report on the appointment and ratification of executive directors and proprietary directors, who have been proposed to the Board of Directors for submission to the Company's Extraordinary General Shareholders' Meeting. In accordance with the selection policy for directors approved by the Board of Directors in November 2015, the Appointments, Governance and Corporate Responsibility Committee has based its analysis of the best composition of the Board of Directors on the needs of the Bank. II.- Report to the Board of Directors to be submitted to the General Shareholders' Meeting. 2. Appointment of Mr Emilio Saracho Rodríguez de Torres The appointment of Mr Emilio Saracho Rodríguez de Torres is informed as Executive Director for the statutory period of four years.

5 Mr Emilio Saracho Rodríguez de Torres has the requisite integrity, knowledge, experience and capacity for good governance to perform the duties inherent to his position as Executive Director and Chairman of Banco Popular. a) He has a degree in Economics and Business Science from the Complutense University in Madrid, an MBA from the University of California in Los Angeles, a diploma in Financial and Banking Systems from the IE Business School in Madrid and a postgraduate degree from the Technical University of Madrid. He also obtained a Fullbright scholarship. b) He has held the following professional positions: from 1998 until present at JP Morgan Chase (UK) Holdings LTD. From 2015 until present he has been Vice-Chairman of JP Morgan Chase & Co (the Bank's listed holding company) and a member of the Corporate and Investment Bank Management Committee. From 2012 to 2015 he was Deputy CEO for JP Morgan for Europe, Middle East and Africa (EMEA), responsible for all the Bank's business activity in the region and Chairman of the Steering Committee for the EMEA region. From 2009 to 2012 he was Co-Head of the Corporate & Investment Bank of JP Morgan for Europe, Middle East and Africa (EMEA), based in London. From 2008 to 2009 he was an independent Advisor and Director (ONO, JPM, Cinven, Indra, Cintra). From 2006 to 2008 he was Chief Executive Officer of JP Morgan Private Bank for Europe, Middle East and Africa, based in London and a member of the Private Banking Operating Committee and the European Management Committee. From 1998 to 2006 he was Chairman for Spain and Portugal, head of business for the Iberian Peninsula and a member of the European Management Committee based in Madrid. From 1995 to 1998 at Santander Investment: General Director of Santander Investment, in charge of the Investment Banking unit. From 1990 to 1995 he was Executive Director at Goldman Sachs International. From 1985 to 1990 at Banco Santander de Negocios, S.A.: where he developed and led the investment banking unit of Banco Santander de Negocios. Director General Manager of Corporate Banking in Santander, S.A. ( ). From 1980 to 1985 he was Deputy Vice-President at Chase Manhattan Bank. The Committee therefore considers that Mr Emilio Saracho Rodríguez de Torres exhibits the highest standards of business and professional integrity, as well as the requisite knowledge, skills and experience to hold the position of Director. In addition, the information provided by Mr Saracho leads the Committee to consider that as a director of the Bank he will act with honesty, integrity and independence of ideas, and that he has the capacity to exercise good governance on the Board of Banco Popular. The committee has recognised his ability to

6 dedicate sufficient time to the position, the lack of potential conflicts of interest and his capacity to evaluate and question the decision-making process and the decisions adopted by the Bank's senior management. In accordance with Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, Royal Decree 84/2015, of 13 February, implementing Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions, Bank of Spain Circular 2/2016 of 2 February, and the Policy on Assessing the Suitability of Members of the Board of Directors and the Board as a Whole, approved by the Board of Directors of Banco Popular, the Committee considers that Mr Emilio Saracho Rodríguez de Torres meets the requirements to hold the position of Executive Director and Chairman, as he has the required business and professional integrity, as well as the requisite knowledge and experience to perform his duties, and the capacity to exercise good governance of the institution. The Committee has reached this conclusion having evaluated the content and validity i) of the questionnaire on integrity and good governance filled in by Mr Emilio Saracho Rodríguez de Torres; ii) his professional track record; and iii) the report on suitability issued with the assistance of the Bank's Institutional Advisory department. At the same time, according to the information provided, Mr Emilio Saracho Rodríguez de Torres complies with the limit to the maximum number of positions established by Article 26 of Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, and Bank of Spain Circular 2/2016 of 2 February, and he is considered to be able to dedicate sufficient time to perform the duties inherent to the position of Executive Director and Chairman. The Committee considers that the ratification of the appointment of Mr Emilio Saracho Rodríguez de Torres will help ensure that the Board of Directors of Banco Popular as a whole can continue to have i) the overall knowledge and experience to carry out supervisory duties; ii) the overall knowledge and experience in business management to carry out management duties; and iii) the appropriate diversity of members to avoid errors of judgement. Finally, the Committee considers that Mr Emilio Saracho Rodríguez de Torres complies with the requirements to be considered an Executive Director under Article 529 duodecies 3) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors.

7 2. Ratification of Mr Pedro Larena Landeta, appointed by co-option. The Board of Administration has the legal capacity to appoint directors by co-option. In virtue of this capacity, following previous report by the Committee, the Company's Board of Directors appointed Mr Pedro Larena Landeta as Company Director on 27 July The appointment must therefore be submitted to the Extraordinary General Shareholders' Meeting for ratification, as specified below. Below are the relevant considerations for the proposal for the ratification of Mr Pedro Larena Landeta as Executive Director. Mr Pedro Larena Landeta has the requisite integrity, knowledge, experience and capacity for good governance to perform the duties inherent to his position as director of Banco Popular. He has a Degree in Law from the Autónoma University of Madrid and an MBA from IESE Business School, University of Navarra. He has extensive professional experience in the banking and financial sector, in which he has been working for over thirty years, holding the following positions: Between 1985 and 1994 he held various positions in Corporate Banking at Citibank NA; from 1994 to 1997 he was Director of Corporate Banking at Citibank Portugal, S.A.; from 1997 to 2001 he was Global Director for Corporate Banking and Corporate Finance at Caja Madrid; from 2001 to 2003 he was Regional Director for Catalonia and the Balearic Islands and Deputy Director General of Caja Madrid; from 2003 to 2007 he was General Director of Commercial Banking and Business Development at Banesto; from 2008 to 2010 he was Head of Private and Commercial Customers Europe at Deutsche Bank; and from 2011 onwards he was Head of Private and Commercial Customers International - Chief Executive of all Retail Banking outside Germany at Deutsche Bank. He has participated in various courses on Corporate Finance, Balance Sheet Management, Leadership, Team Management, Structured Products, Structured Finance, Risk Analysis and Regulatory Issues, etc. The Committee therefore considers that Mr Pedro Larena Landeta exhibits the highest standards of business and professional integrity, as well as the requisite knowledge, skills and experience to hold the position of Director and Chief Executive Officer. In addition, the information provided by Mr Larena leads the Committee to consider that as a director of the Bank to date he has acted, and will continue to act in the future, with honesty, integrity and

8 independence of ideas, and that he has the capacity to exercise good governance on the Board of Banco Popular. To this end, it has reviewed his ability to dedicate sufficient time to the position, the lack of potential conflicts of interest and his capacity to evaluate and question the decision-making process and the decisions adopted by the Bank's senior management. In accordance with Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, Royal Decree 84/2015, of 13 February, implementing Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions, Bank of Spain Circular 2/2016 of 2 February, and the Policy on Assessing the Suitability of Members of the Board of Directors and the Board as a Whole, approved by the Board of Directors of Banco Popular, the Committee reaffirms that Mr Pedro Larena Landeta continues to meet the requirements to hold the position, as he has the required business and professional integrity, as well as the requisite knowledge and experience to perform his duties, and the capacity to exercise good governance of the institution. The Committee has reached this conclusion having evaluated the content and validity i) of the questionnaire on integrity and good governance filled in by Mr Pedro Larena Landeta; ii) his professional track record; and iii) the report on suitability issued with the assistance of the Bank's Institutional Advisory department. At the same time, according to the information provided, Mr Pedro Larena Landeta complies with the limit to the maximum number of positions established by Article 26 of Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, and Bank of Spain Circular 2/2016 of 2 February, and he is considered to be able to dedicate sufficient time to perform the duties inherent to the position. The Committee considers that the ratification of the appointment of Mr Pedro Larena Landeta will help ensure that the Board of Directors of Banco Popular as a whole can continue to have i) the overall knowledge and experience to carry out supervisory duties; ii) the overall knowledge and experience in business management to carry out management duties; and iii) the appropriate diversity of members to avoid errors of judgement. With respect to the assessment of the work and effective dedication of the director since his appointment to the present date, this Committee has noted his performance in his position and his attendance and informed participation at Board meetings since his appointment.

9 Finally, the Committee considers that Mr Pedro Larena Landeta complies with the requirements to be considered an Executive Director under Article 529 duodecies 1) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors. 3. Ratification of Mr Jaime Ruiz Sacristán, appointed by co-option. The Board of Administration has the legal capacity to appoint directors by co-option. In virtue of this capacity, following previous report by the Committee, the Company's Board of Directors appointed Mr Jaime Ruiz Sacristán as Company Director on 28 September The appointment must therefore be submitted to the Extraordinary General Shareholders' Meeting for ratification, as specified below. Below are the relevant considerations for the proposal for the ratification of Mr Jaime Ruiz Sacristán as Proprietary Director. Mr Jaime Ruiz Sacristán has the requisite integrity, knowledge, experience and capacity for good governance to perform the duties inherent to his position as director of Banco Popular. He has a degree in Business Administration and an MBA from Northwestern University (USA). He has extensive professional experience in the banking and financial sector, in which he has been working for over thirty-eight years, holding positions such as Credit Director, Corporate Banking Director and Director General. He has been Chairman and Vice-Chairman of the Mexican Banking Association: and d) has extensive experience in management positions, he currently serves as Director in other banks and subsidiary companies, as well as in the Mexican Stock Exchange, S.A.B. de C.V. The Committee therefore considers that Mr Jaime Ruiz Sacristán exhibits the highest standards of business and professional integrity, as well as the requisite knowledge, skills and experience to hold the position of director. In addition, the information provided by Mr Ruiz leads the Committee to consider that as a director of the Bank to date he has acted, and will continue to act in the future, with honesty, integrity and independence of ideas, and that he has the capacity to exercise good governance on the Board of Banco Popular. To this end, it has reviewed his ability to dedicate sufficient time to the position, the lack of potential conflicts of interest and his capacity to evaluate and question the decision-making process and the decisions adopted by the Bank's senior management.

10 In accordance with Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, Royal Decree 84/2015, of 13 February, implementing Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions, Bank of Spain Circular 2/2016 of 2 February, and the Policy on Assessing the Suitability of Members of the Board of Directors and the Board as a Whole, approved by the Board of Directors of Banco Popular, the Committee reaffirms that Mr Jaime Ruiz Sacristán continues to meet the requirements to hold the position, as he has the required business and professional integrity, as well as the requisite knowledge and experience to perform his duties, and the capacity to exercise good governance of the institution. The Committee has reached this conclusion having evaluated the content and validity i) of the questionnaire on integrity and good governance filled in by Mr Jaime Ruiz Sacristán; ii) his professional track record; and iii) the report on suitability issued with the assistance of the Bank's Institutional Advisory department. At the same time, according to the information provided, Mr Jaime Ruiz Sacristán complies with the limit to the maximum number of positions established by Article 26 of Law 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, and Bank of Spain Circular 2/2016 of 2 February, and he is considered to be able to dedicate sufficient time to perform the duties inherent to the position. The Committee considers that the ratification of the appointment of Mr Jaime Ruiz Sacristán will help ensure that the Board of Directors of Banco Popular as a whole can continue to have i) the overall knowledge and experience to carry out supervisory duties; ii) the overall knowledge and experience in business management to carry out management duties; and iii) the appropriate diversity of members to avoid errors of judgement. With respect to the assessment of the work and effective dedication of the director since his appointment to the present date, this Committee has noted his performance in his position and his attendance and informed participation at Board meetings since his appointment. Finally, the Committee considers that Mr Jaime Ruiz Sacristán complies with the requirements to be considered a Proprietary Director under Article 529 duodecies 3) of the Corporate Enterprises Act and Article 15 of the Regulation of the Board of Directors. At the end of the analysis, the proposed appointment of Mr. Emilio Saracho Rodríguez de Torres, as executive director, and the ratification of Mr. Pedro Larena Landeta, as executive

11 director, and of Mr. Jaime Ruiz Sacristán, as a proprietary director (the last two Initially appointed by co-optation by the Board of Directors), for the four-year term established in the By-Laws, are favourably informed for submission to the Extraordinary Shareholders' Meeting, in accordance with Article 529 decies of the Capital Companies Act.