Banca Monte dei Paschi di Siena S p A : Group remuneration report 2024

Report on the remuneration

policy 2024 and on compensation paid

2024 Report on the remuneration policy and on compensation paid

Courtesy translation: in case of discrepancy between the Italian language original text and the English language translation, the Italian text shall prevail.

Letter from the Chairperson of the Remuneration Committee

Gianluca Brancadoro

Dear Shareholders,

as Chairman of the Remuneration Committee, I am pleased to present the Annual Remuneration Report of Banca Monte dei Paschi di Siena for 2024. Consistent with previous years, the 2024 Remuneration Policy ensures a link with the strategic guidelines outlined in the 2022-2026 Business Plan "A Clear and Simple Commercial Bank", in order to generate a positive impact for people, customers, stakeholders and the environment, within the framework of clear and transparent governance.

The year 2023 saw the renewal of the Board of Directors and the establishment of a new Remuneration Committee, which has worked to equip the Bank with remuneration tools and architectures that take into due consideration remuneration benchmarking analyses and are suitable for making the Bank competitive in the labour market, functional to the pursuit of corporate objectives and consistent with

investors' expectations for the future, with a view to the pursuit of sustainable success and long-term value creation.

The Bank's governance model guarantees full cooperation between the various bodies and functions, as well as adequate control and a precise scanning of the prodromal acts for all remuneration decisions taken within the Group, ensuring that they are taken in an independent, informed and timely manner, in order to avoid conflicts of interest or unfairness.

The Committee took part in each phase of the remuneration processes, discussing them with the Bank's structures, verifying alignment with the commitment to value creation, through the close "pay for performance" link, as the guiding principle of the incentive system.

The main objective was to direct the definition of a remuneration policy that, in support of the Group's strategy, would be aligned with the corporate values, based on principles of fairness and merit,

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sobriety, transparency, and long-term orientation, and at the same time be capable of attracting, motivating and retaining the best professionals in a particularly complex and challenging context, which must also take into account the commitments assigned by the European Commission as part of the 2022-2026 Business Plan.

Confirming this approach, the architecture defined for the short-term incentive system aimed at combining a responsible approach in the conscious management of business risks and a self-financing mechanism of the systems themselves. The correct focus on the Group's performance has also been envisaged, with attention to the different business areas, confirming the commitment to sustainability issues, through the focus on ESG indicators pertaining to the environmental sphere and gender equality, related to the Sustainability Plan approved by the Board of Directors in 2023.

The Policy also clearly outlines the remuneration structure of the CEO, the criteria by which incentives are linked to

economic-financial and social responsibility objectives, the drivers of incentives for all Identified Staff and, therefore, of value creation for all employees and collaborators.

The remuneration strategy for 2024, aligned with regulatory forecasts, the

indications of investors and proxy advisors and market best practices, also reflects the excellent results achieved, in advance of the 2022-2026 Business Plan, supported by financial discipline and cost control, operational efficiency and careful risk management, as well as a general context that is more favourable than in recent years.

The remuneration policy I am presenting to you is based on fairness and inclusion, as a commitment to create conditions of entry and progression that generate a work environment in which each person's objective contribution, professional skills and personal qualities are promoted and fully valued, regardless of gender, age and/or other personal characteristics; the encouragement of equal opportunities; attention to generational change; listening, involvement and participation of employees, supported and accompanied in the assumption of responsibility towards growing professional challenges; sustainability, pursued through the inclusion of ESG parameters in staff remuneration mechanisms.

Particular attention has been paid to the issue of gender neutrality in politics, with the aim of achieving the progressive and substantial reduction of the gender pay gap. In this context, the Group is implementing a cultural path leading to the

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2024 Report on the remuneration policy and on compensation paid

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recognition and enhancement of diversity in all its meanings, and the numerous initiatives implemented have led to the acquisition of the Gender Equality Certification at the end of 2023. This result confirms the Group's concrete commitment to pay equity between women and men and to the creation of an inclusive work environment, guaranteeing everyone equal opportunities for work and professional growth.

For their commitment to the Committee's activities and for their significant contribution in terms of critical discussion and ideas, I sincerely thank my fellow Committee members Paola De Martini,

Lucia Foti Belligambi, Anna Paola Negri- Clementi and Renato Sala.

Finally, I would like to thank you Shareholders for your attention to this Report and for your contribution, hoping that it will meet with your broad approval at the Shareholders' Meeting.

Kindest regards,

Gianluca Brancadoro

Chairperson of the Remuneration

Committee

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Table of contents
INTRODUCTION AND OVERVIEW	8
SECTION I - 2024 GROUP REMUNERATION AND INCENTIVE POLICY	14
1. PURPOSE OF THE REMUNERATION POLICY AND MAIN CHANGES FOR 2024	14
1.1	The sustainability objectives in the MPS Group strategy	15
1.2	Gender equality and inclusion	17
2. GOVERNANCE RULES	21
3. COMPLIANCE	28
4. PERSONNEL REMUNERATION AND INCENTIVES	32
4.1	General Principles	32
4.2	Remuneration of Directors and Statutory Auditors	35
4.3	Fixed remuneration	38
	4.3.1 Fixed remuneration and indemnities	38
	4.3.2 Benefits and other compensation	40
4.4	Variable remuneration	42
	4.4.1 Definition	42
	4.4.2 "Core" components	44
	4.4.3 "Non Core" components	46
4.5	2024 Identified Staff	50
	4.5.1 Basic rules of variable remuneration	51
	4.5.2 Focus on the remuneration of the Chief Executive Officer and General Manager
	...................................................................................................................................................	56
	4.5.3 "2024 Incentive System"	60
4.6	Compensation for early termination of the employment	61
4.7	Remuneration of financial advisors	65
	4.7.1 Indirect sales channels	65
	4.7.2 The network of financial advisors of Widiba	66
	4.7.3 Focus on the non-recurring component of the remuneration of Widiba financial
	advisors	69
4.8	The remuneration of business partners not bound to the company by employment
	relationships	75
4.9	Financial instruments to service variable remuneration payment	76
4.10The elements of the policy which may be derogated for personnel belonging to the
	perimeter of key management personnel	76
5. FOCUS ON CERTAIN KEY PROCESSES	78
5.1	Process of classifying "Identified Staff"	78

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5.2	Compliance breach management process	81
5.3	Process for verification of absence of hedging strategies ("hedging")	83
SECTION II - COMPENSATION PAID (PART I)	84
1. IMPLEMENTATION OF REMUNERATION POLICIES IN 2023	84
1.1 Governance	84
1.2	Dialogue with shareholders	85
1.3 Compensation of Directors and Statutory Auditors in 2023	85
1.4 Variable remuneration of the Chief Executive Officer and General Manager - 2023 ..	86
1.5	Changes in the Identified Staff perimeter	88
1.6 Changes in remuneration levels for Group personnel	88
1.7	2023 variable remuneration	91
1.8	Indemnities and/or other benefits for termination of office or for termination of
	employment awarded during the year	92
1.9	Allocation of other forms of remuneration envisaged in the 2023 Policy	93
SECTION II - COMPENSATION PAID (PART II)	94

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INTRODUCTION AND OVERVIEW

The Report on the 2024 remuneration policy and on compensation paid (hereinafter "Report") is defined in compliance with the relevant legal and

Foreword regulatory system and fulfils the disclosure obligations envisaged by Consob regulations and by the Bank of Italy's Supervisory Provisions.

The year 2023 saw the Bank return to profits, two years in advance of what was envisage in the 2022-2026 Business Plan "A clear and simple commercial Bank". The Bank aims to further accelerate its growth process, encouraging employees to be responsible for the new challenges set out in the Business Plan and bolstering their commitment through meritocratic policies whose ultimate goal is to:

• promote the dissemination of a strong corporate culture geared towards the creation of long-termvalue
• be increasingly effective in meeting customer needs
• contribute to the pursuit of the Group's long-term economic/financial interests, and to the company's "sustainable success"
• motivate and retain employees and their skills, promoting generational turnover
• be attractive to the outside world.

As further proof of the enhancement of the Bank's human capital and the strengthening of the commercial coverage of the market, at the meeting of 6 February 2024, the Board of Directors approved new appointments to the top management of some key functions, testament to the enhancement of the assets of internal professional skills through targeted policies for the development of its internal talents, as well as the appointment of the Deputy Sales General Manager and Acting Deputy General Manager.

The core themes of the 2022-2026 Business Plan include the creation of a sustainable development model of which the enhancement of plurality, inclusion, and equity are key elements for fostering long-term value creation.

As confirmation of the Group's commitment to implementing this model, it is worth mentioning the recognition, at the end of 2023, of the Gender Equality Certification1, concrete

1The "Gender Equality Certification" system is a measure envisaged by the National Recovery and Resilience Plan (NRRP) approved by the European Union.

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evidence of the attention to increasing diversity and inclusion as part of the human capital development policy within the Group (see paragraph 1.2 below).

Lastly, 2023 also saw the renewal of the National Labour Agreement (CCNL) until 31 March 2026, both for the economic and regulatory aspects, which involved all companies in the banking sector.

The economic rewards defined are aimed at making up for inflation and redistributing the value created, within a more solid regulatory and contractual framework and guaranteeing greater protection. The main changes set out in the agreement, in particular, starting from 1 July 2023, include the increase in gross remuneration (equal to EUR 435 for the average reference level over the period 2023-2026) and the restoration of the full calculation basis for employee termination pay. In the Group, the first payment of salary increases took place in December 2023, while subsequent payments will be made between September 2024 and March 2026.2

Structure of the 2024 Report

The first section of the Report on the Remuneration Policy:

	> indicates how policies contribute to the corporate strategy, the pursuit of long-
	term interests and the sustainability of the company. It is determined by taking
	into account the compensation and working conditions of the company's
Section I	employees
> defines the various components of remuneration that can be recognised
	> specifies the elements of the policy which, in the presence of the exceptional
	circumstances indicated in article 123-ter, paragraph 3-bis, of the
	Consolidated Law on Finance, it is possible to derogate from

The remuneration and incentive policies for the banking sector are subject to specific European and national regulations. The Report is therefore prepared on the basis of the provisions of the Consolidated Law on Finance3 and the Issuers' Regulations4 and also takes into account the disclosure obligations to be provided to the Shareholders' Meeting in

1. The awards will be disbursed in four tranches on 1 December 2023 (also including arrears from July 2023), 1 September 2024,

1. June 2025, 1 March 2026.

1. Article 123-ter of Italian Legislative Decree no. 58/1998, as subsequently amended ("Consolidated Law on Finance")
2. According to the provisions of Schedule 7-bis of Annex 3A to the Regulation adopted by Consob with resolution no. 11971 of

1. May 1999, as subsequently amended ("Issuers' Regulations").

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