Nomination and Compensation Policy for Members of the Company’s Corporate Governance Bodies

Record of Reviews

Version: Review Date: Record:
1 October 28, 2019 Preparing the Document.
2 March 17, 2020 Updating Item III. Guidelines Sub-Items 1.1, 2.3, 2.4, 8.1, 13.2.2, 13.2.3 and 18.1.
Including in Item III. Guidelines Sub-Items 2.4.3, 2.5.4, 5.2.4, 5.2.6, 12.2, 13.5 and 13.7.
3 May 27, 2021 Update of Item III. Guidelines sub-items 2.4.4, 3.3.7 and 7.2. Amendment of BACEN Circular 3,885/2018 to BCB Resolution 81/21.

 


I. Purpose

Consolidating the guidelines, criteria and the process to nominate and select members to work in the Governance Bodies of Cielo S.A. (“Company”) and its Subsidiaries and Affiliated Companies, ensuring the appropriate structure of these bodies and the alignment with the best governance practices, as well as establishing guidelines to be met and applied to set the compensation and the respective benefits for the members of the said bodies, focusing on attracting, encouraging, recognizing and retaining qualified professionals, according to Cielo’s strategic interests and best market practices.

II. Scope

This nomination and compensation policy for members of the Company’s Governance Bodies (“Policy”) applies to all Governance Agents involved in the Company’s Corporate Governance System.
All the Company’s Subsidiaries must establish their directives based on the guidance provided in this Policy, considering the specific needs and legal and regulatory aspects to which they are subject.
Regarding the Affiliated Companies, the Company’s representatives working in the Management of such companies should strive to set their directives based on the guidance provided in this Policy, considering the specific needs and legal and regulatory aspects to which they are subject.

III. Guidelines

1. General Criteria to Appoint Members for the Company’s Governance Bodies

1.1. The nomination of members for the Company’s Governance Bodies must comply with the provisions of this Policy, the Bylaws , the Shareholders’ Agreement , the Charter of the corresponding Governance Bodies, the Listing Regulations of the Novo Mercado segment of B3 S.A. – Brasil, Bolsa, Balcão (“Novo Mercado Regulation”), the Brazilian Code of Corporate Governance for Publicly Held Companies (“CBGC”), Law 6,404/1976, as amended (“Brazilian Corporation Law”), Official Letter 3,885/2018 of the Brazilian Central Bank (“BACEN”), as applicable, as well as other laws and regulations applicable to the Company.
1.1.1. In addition to observing the provisions of aforementioned Item 1.1., the professionals to be nominated to the Governance Bodies must (a) be highly qualified, with outstanding experience (technical, professional and academic) compatible with the position for which he/she was nominated, (b) have an unblemished reputation, (c) have moral integrity, (d) have the time available to properly devote himself/herself to the position, (e) be in line with the Company’s values and culture and its Code of Ethical Conduct , (f) have no conflict of interest with the Company, and he/she may be exempted from this criterion by the Shareholders’ Meeting and elected, as set forth in Item 2.4.1 below, (g) hold no office in a company or entity that may be considered a competitor of the Company, (h) not be prevented by law or convicted of bankruptcy, prevarication, active or passive corruption, concussion, embezzlement, against the popular economy, the public faith, property or the national financial system, or criminal penalty that prohibits his/her access to a public office and (i) not be subject to an unappealable decision of the Brazilian Securities and Exchange Commission (“CVM”) suspending or disqualifying him/her from working in the management of a publicly held company.
1.1.2. The nominations should also consider professionals with different characteristics and profiles, focusing on the complementarity of skills, such as social and environmental aspects, and diversity, such as gender, age, ethnicity, among others, allowing the actual debate of ideas and the technical, impartial and informed decision-making process.
1.1.3. Additionally, to nominate members for the Corporate Governance Bodies, the legal impediments and prohibitions provided for in the Brazilian Corporation Law, CVM Regulations, Novo Mercado Regulation, Brazilian Code of Corporate Governance for Publicly Held Companies and BACEN’s Official Letter 3,885/2018 must be considered, as applicable.
1.1.4 The process to nominate members to the Company’s Corporate Governance Bodies shall be carried out once every two (2) years, as provided in the Bylaws and Charters of the Company’s respective Corporate Governance Bodies or, extraordinarily, as needed.

2. Criteria and Process to Appoint the Members for the Company’s Board of Directors

2.1 Composition. The Company’s Board of Directors shall be comprised by, at least, seven (7) and no more than eleven (11) members, elected by the Shareholders’ Meeting, with a unified term of office of two (2) years, with re-election being allowed. At least two (2) members, or twenty percent (20%) of the total number of Board Members, whichever number is higher, must be Independent Board Members, as defined in the Novo Mercado Regulation. The members elected through the option provided in Article 141, Paragraphs 4 and 5, and Article 239 of the Brazilian Corporation Law shall also be considered Independent Board Members. When the calculation of the aforementioned percentage results in a fraction, the fractional number of Board Members must be rounded to the immediately higher whole number.

2.2. Chairman and Vice-Chairman of the Board of Directors The Board of Directors shall have one (1) Chairman and one (1) Vice-Chairman elected by the Board of Directors. The Vice-Chairman performs the duties of the Chairman in his/her absences and temporary impediments, regardless of any formality. In case of absence or temporary impediment of the Chairman and Vice-Chairman, the duties of the Chairman shall be assumed by another member of the Board of Directors designated by the majority of the other members, pursuant to Article 15, Paragraph 3, of the Company’s Bylaws.

2.3. Prohibition Regarding the Accumulation of Positions – Chairman of the Board of Directors and Chief Executive Officer. The positions of Chairman of the Board of Directors and Chief Executive Officer, or Lead Executive, of the Company may not be occupied by the same person. This may occur in case of a vacancy, in which case the Company must (a) disclose the accumulation of positions due to the vacancy until the next business day after the occurrence; (b) disclose, within sixty (60) days after the vacancy, the measures taken to end the accumulation of positions; and (c) end the accumulation within one (1) year, pursuant to Article 15, Paragraph 5, of the Company’s Bylaws.

2.4. Criteria to Appoint the Members for the Company’s Board of Directors. To nominate the members for the Board of Directors, the general criteria set forth in aforementioned Item 1 must be considered.
2.4.1. Regarding Item 1.1.1, Sub-Items (f), and (g), the nominee under this condition may be elected as a member of the Company’s Board of Directors if exempted by the Shareholders’ Meeting, pursuant to Article 15, Paragraph 6, of the Company’s Bylaws.
2.4.2. Additionally, to nominate members for the Board of Directors, the Company must comply with the legal requirements set forth in Article 147 of the Brazilian Corporation Law, CVM Regulations, Articles 14 to 18 of the Novo Mercado Regulation and Articles 9 and 11 of BCB Resolution 81/21.
2.4.3. The Company shall carry out comprehensive surveys regarding the nominees for the Board of Directors, in public and private registration and information systems, to validate the compliance with BCB Resolution 81/21.
2.4.4. The Company may not elect Board Members who (a) are over seventy (70) years old on the date of their first election and (b) are members of more than four (4) other Boards of Directors of publicly held companies.
2.4.5. The reelection of members of the Board of Directors must consider (a) the attendance record at meetings during his/her last term of office, recommending the re-election of the nominee who attended, at least, seventy-five percent (75%) of the meetings in his/her last term of office; (b) the good performance during his/her last term of office; (c) a maximum number of ten (10) consecutive re-elections; (d) evaluation of the benefit of his/her replacement and renewal of the members of the Board of Directors when compared to his/her permanence and reelection.

2.5. Process to Appoint the Members for the Company’s Board of Directors. The nomination of members for the Board of Directors can be done by the Management or any of the Company’s shareholders. The process to nominate members for the Company’s Board of Directors must be based on a prior analysis (prepared as a report or matrix) of the skills of the members of the Board of Directors, to verify the efficiency of the board and the complementarity of skills, as well as to point out any gaps in the Board’s structure, ensuring the proper composition. The nomination process must ensure that the Board of Directors shall have (a) mostly external members with, at least, two (2) members, or twenty percent (20%) of the total number of Board members, whichever number is higher, shall be Independent Board Members, as set in the Novo Mercado Regulation; and (b) considering the availability of time for the members to exercise their duties and the diversity of knowledge, experience, behavior, cultural aspects, age, and gender, in accordance with CBGC’s Recommended Practice 2.2.

2.5.1 Nomination of Board Members pursuant to the Shareholders’ Agreement. Regarding the nominations made pursuant to the Shareholders’ Agreement, the shareholder entitled to nominate candidates to the Board of Directors must notify the Corporate Governance Office, in writing, informing the full name and qualification of the candidates. When nominating the member for the Board of Directors, the shareholder shall submit a statement certifying that all legal criteria and those provided for in this Policy have been duly observed in the nomination.
2.5.1.1. In addition, the shareholder must submit a specific form (“Form”) to be made available by the Corporate Governance Office, which shall consolidate the information of the professional and the compliance with the criteria set forth in this Policy for the position. The Form must be completed and signed by the nominee and forwarded to the Corporate Governance Office with the respective supporting documents mentioned in the Form.
2.5.1.2. The Board of Directors, after the recommendation of the Corporate Governance Committee, shall include in the Management’s Proposal for the Shareholders’ Meeting that shall elect the Board Members, a statement indicating the compliance with this Policy of each candidate to the position of member of the Board of Directors.
2.5.2. Nomination of Independent Board Members. The nomination of an independent board member may be made by the Management, Controlling Shareholders, or Minority Shareholders.
2.5.2.1. The Board of Directors, after the recommendation of the Corporate Governance Committee, shall include in the Management’s Proposal for the Shareholders’ Meeting that shall elect the Independent Board Members, a statement indicating: (a) the compliance with this Policy of each candidate to the position of member of the Board of Directors and (b) the reasons, given the provisions of this Policy, in the situations provided for in Article 16 of the Novo Mercado Regulation and in the statement mentioned in Article 17 of the Novo Mercado Regulation, why each candidate is classified as Independent Board Member.
2.5.2.2. The nomination of a candidate for the Board of Directors as an Independent Board Member must be resolved by the Shareholders’ Meeting, which may base its decision: (a) in the statement, forwarded by the candidate as an Independent Board Member of the Board of Directors, certifying his/her compliance with the independence criteria set forth in the Novo Mercado Regulation, including the reasoning, if verifying any of the situations provided for in Article 16, Paragraph 2, of the Novo Mercado Regulation and (b) in the statement of the Company’s Board of Directors, included in the Management Proposal referred to in aforementioned Item 2.5.2.1.
2.5.2.3. In case of a nomination by Minority Shareholders, the Board of Directors, following the recommendation of the Corporate Governance Committee, must forward its statement, pursuant to Item 2.5.2.1., to include the notice from shareholders with the information on nominee, at most 48 hours after the delivery of the document by the Minority Shareholder formalizing the nomination, always observing the deadlines provided for in the applicable legislation.
2.5.2.4. The procedure provided for in item 2.5.2.3. for the election of an independent board member does not apply to the nominations of candidates who (a) do not meet the deadline for the inclusion of candidates in the remote voting form and (b) by separate vote, under the terms of Article 16, Paragraph 3, of the Novo Mercado Regulation.
2.5.2.5. Classification of the Independent Board Member for the Board of Directors. The number of vacancies destined for independent board members is considered to be all members that comply with Article 16 of the Novo Mercado Regulation.

2.5.3. Vacancy in the Board of Directors. In case of a vacancy in the Board of Directors, the remaining Board Members must nominate an alternate member, subject to this Policy, who shall remain in office until the first Shareholders’ Meeting, when the new member must be elected and remain in office until the end of the term of office of the member he/she replaced, pursuant to Article 15, Paragraph 4, of the Bylaws and Article 2.7 of the Charter of the Company’s Board of Directors.
2.5.3.1. In the aforementioned cases, the nominations made shall follow the same process indicated in items 2.5.1. and 2.5.2., as applicable. Accordingly, the remaining Board Members shall nominate an alternate member who shall remain in office until the first Shareholders’ Meeting of the Company, when the new member shall be elected and remain in office until the end of the term of office of the member he/she replaced, pursuant to the Charter of the Company’s Board of Directors and Article 15, Paragraph 4, of the Bylaws.

2.5.4. The members of the Board of Directors shall only be invested in their positions after signing the investiture agreement once the BACEN approves their election, pursuant to BCB Resolution 81/21.

3. Criteria and Process to Appoint the Members for the Company’s Advisory Committees

3.1. Advisory Committees. The Company currently has six (6) Advisory Committees: (a) Audit Committee – statutory and permanent body; (b) Finance Committee; (c) Corporate Governance Committee; (d) People and Compensation Committee; (e) Risk Committee; (f) Sustainability Committee.

3.2. Coordination of the Advisory Committees. The Company’s Advisory Committees are coordinated by independent Board Members, and the members are preferably part of the Board of Directors.

3.3. Criteria to Nominate Members for the Advisory Committees. To nominate the members for the Advisory Committees, the general criteria set forth in aforementioned Item 1 must be considered.
3.3.1. The reelection of members of the Advisory Committees must consider (a) the attendance record of the nominee at meetings during his/her last term of office, recommending the re-election of the nominee who attended, at least, seventy-five percent (75%) of the meetings in his/her last term of office; (b) the good performance during his/her last term of office; and (c) evaluation of the benefit of his/her replacement and renewal of the members of the Committee when compared to his/her permanence and reelection.
3.3.2. Structure and Specific Criteria to Nominate Members for the Audit Committee. The Audit Committee shall have, at least, three (3) members being, at least: (a) one (1) Independent Board Member of the Company; (b) one (1) of its members must have recognized experience in corporate accounting matters, pursuant to CVM Instruction 308 of May 14, 1999, as amended, which provides for the registration and exercise of the independent audit activity within the securities market and sets the duties and responsibilities of the management of the audited entities in their relationship with independent auditors; and (c) the same member of the Committee may accumulate both characteristics set forth in Items (a) and (b).
3.3.2.1. Specific Prohibition. The following are prohibited from being a member of the Company’s Audit Committee: (a) the executive officers, and (b) the executive officers of Subsidiaries, Controlling Shareholder, Affiliated Companies or companies under joint control.
3.3.3. Structure of the Finance Committee. The Audit Committee shall have, at least, three (3) members with, at least, one (1) member being an Independent Board Member of the Company.
3.3.4. Structure of the Corporate Governance Committee. The Corporate Governance Committee shall have, at least, four (4) members with, at least, one (1) member being an Independent Board Member or Chief Executive Officer of the Company as a permanent member.
3.3.4.1. Structure of the Ad Hoc Corporate Governance Committee In compliance with the parameters set forth in the Related-Party Transaction Policy and other Situations Involving Conflict of Interest of the Company, the transactions between the Company and any of its Controlling Shareholders shall be evaluated by the Ad Hoc Corporate Governance Committee to recommend the matter to be resolved by the Board of Directors. This Committee, in exceptional nature, shall have up to two (2) additional Independent Board Members, besides the Coordinator, and its member(s) shall be convened to consider the matter as an ad hoc member of the Committee, replacing the member(s) nominated by the conflicting controlling shareholder(s).
3.3.5. Structure of the People and Compensation Committee. The People and Compensation Committee shall have, at least, three (3) members with, at least, one (1) member being an Independent Board Member of the Company.
3.3.6. Structure of the Risk Committee. The Risk Committee shall have, at least, three (3) members with, at least, one (1) member being an Independent Board Member of the Company.
3.3.6.1. Specific Prohibition. It is prohibited the participation, as members of the Risk Committee, professionals who have been, over the past six (6) months, or who currently are employees or members of the Executive Board of the Company or any of its investees, so they can preserve their autonomy and independence. This is also valid for spouses or relatives in a straight line, collateral line, or affinity line, up to the second degree.
3.3.7. Structure of the Sustainability Committee. The Sustainability Committee shall have three (3) members of the Company’s Board of Directors with, at least, one (1) Independent Board Member and a statutory director responsible for the People, Management, and Performance department.

3.4. Process to Nominate Members for the Advisory Committees. The nomination of members to the Company’s Advisory Committees shall be made by the Management, as well as by the Controlling Shareholder(s).
3.4.1. The nominations must be forwarded to the Corporate Governance Office, in writing, stating the full name and qualification of the member nominated for the Advisory Committee.
3.4.2. In addition, a Form must be presented, which will be made available by the Corporate Governance Office, which shall consolidate the information of the professional and the compliance with the criteria set forth in this Policy for the position. The Form must be completed and signed by the nominee and forwarded to the Corporate Governance Office with the respective supporting documents mentioned in the Form.

4. Criteria and Process to Appoint the Members for the Company’s Fiscal Council

4.1. The operation of the Fiscal Council is regulated by the Company’s Bylaws and the Charter of the Fiscal Council , and the nomination criteria set forth in aforementioned Item 1 must be observed.
4.1.1. In addition to the requirements set forth in this Policy and applicable regulations, the prohibitions stated in Article 25, Paragraph 9, of the Company’s Bylaws and Article 162 of the Brazilian Corporation Law must be observed.

5. Criteria and Process to Appoint Members for the Company’s Statutory Executive Board.

5.1. Structure. The Statutory Executive Board shall be comprised by, at least, two (2) and no more than ten (10) members, one (1) of whom shall be the Chief Executive Officer (CEO), one (1) shall be the Investor Relations Officer, and up to eight (8) shall be Executive Officers without specific titles, elected by the Board of Directors for a unified term of office of two (2) years, and re-election is authorized. The Statutory Executive Officers may accumulate other positions, as resolved by the Board of Directors.
5.1.1. Vacant Position of a Statutory Executive Officer. The statutory officers shall be replaced in cases of absence, or temporary impediment, by another statutory officer chosen by the Chief Executive Officer. If a statutory officer position becomes vacant, the alternate officer shall be elected by the Board of Directors to fulfill the position’s remaining term of office at the first meeting after the position becomes vacant, which must occur within a maximum of thirty (30) days.
5.1.1.1. For the aforementioned purposes, a vacancy shall occur after a dismissal, death, resignation, evidenced inability to act, disability, or unreasonable absence for more than fifteen (15) calendar days.

5.2. Criteria to Nominate Members for the Statutory Executive Board. To nominate members for the Company’s Statutory Executive Board, the general criteria set forth in aforementioned item 1 must be observed, and the structure of the Statutory Executive Board must have a balance of professional executives who know how to combine the interests of the Company, its shareholders, members of the management team and employees. The process to nominate and elect the members for the Statutory Executive Board described in this Policy aims at creating a group of professionals that are in line with the Company’s principles and ethical values, as well as aspects of diversity, seeking for individuals with complementary skills and that are qualified to face the Company’s challenges.
5.2.1. Additionally, to nominate members for the Statutory Executive Board, the Company must comply with the legal requirements set forth in Article 143 of the Brazilian Corporation Law, CVM Regulations, and Articles 9 and 11 of BCB Resolution 81/21.
5.2.2. The Company shall carry out comprehensive surveys regarding the nominees for the Statutory Executive Board, in public and private registration and information systems, to validate the compliance with BCB Resolution 81/21.
5.2.3. To nominate members for the Statutory Executive Board, the Company’s Succession Plan must be respected, which has the purpose of describing the profiles for key positions and identify potential candidates who have the necessary skills to perform the required duties. If there is no successor mapped out internally, an external selection process will be carried out for recruitment.
5.2.4. Nominees who have already completed sixty-five (65) years of age on the date of their election may not become a member of the Statutory Executive Board.
5.2.5. Shareholders may not directly nominate members for the Statutory Executive Board, or any other management positions.
5.2.6. The members of the Statutory Executive Board shall only be invested in their positions after signing the investiture agreement once the BACEN approves their election, pursuant to BCB Resolution 81/21.

5.3. Process to Nominate Members for the Statutory Executive Board. The members of the Statutory Executive Board, with the exception of the Chief Executive Officer, who shall be nominated by the Board of Directors, shall be nominated by the Chief Executive Officer and elected by the Board of Directors.

6. Criteria and Process to Appoint Members for the Company’s Advisory Forums

6.1. The operation of the Advisory Forums is regulated by the Charter of the corresponding Advisory Forum, and the nomination criteria set forth in aforementioned Item 1 must be observed.

6.2. The nomination of members for the Company’s Advisory Forums, when applicable, shall be carried out through a joint nomination by the Corporate Governance Office and the Company’s technical area, observing the general criteria set in Item 1 of this Policy, and the Company’s employees should preferably be nominated for such positions.

6.3. The Statutory Executive Board is the body responsible for approving the members nominated for the Advisory Forums by the Corporate Governance Office and by the Company’s technical area, which is responsible for analyzing the compliance of the nominations in relation to this Policy (especially the criteria set forth in aforementioned Item 1).

7. Appointment of Representatives in Subsidiaries and Affiliated Companies of the Company

7.1. The nomination of members for the Board of Directors and/or Statutory Executive Board of the Subsidiaries and Affiliated Companies of the Company shall be carried out through a joint nomination of the Affiliated Companies’ Management, the Corporate Governance Office and the Company’s technical area, observing the general criteria set in Item 1 of this Policy.

7.2. The Company’s Board of Directors, upon proposal by its Statutory Executive Board, shall be responsible for choosing the Company’s representatives for the Board of Directors or similar body, Fiscal Council and Statutory Executive Board of the Company’s Subsidiaries and Affiliated Companies, as applicable and pursuant to Article 19 (xxix) of its Bylaws, except when the nominees for the positions are members of the Company’s Statutory Executive Board.

7.3. For the aforementioned positions, the employees of the Company, its Subsidiaries, and its Affiliated Companies must be preferably nominated.

8. Compensation of the Members of the Company’s Governance Bodies
8.1. The Company adopts the following principles to compensate the members of its Governance Bodies: (a) the Company’s compensation program is an instrument for attracting, recognizing, encouraging and retaining talent, based on meritocracy; (b) the Company’s compensation program considers the individual performance, organizational performance, as well as sustainable growth indicators and viability based on financial results; (c) the Company’s compensation program must be unique and competitive compared to companies operating in the same segment in which the Company operates and always in line with the best market practices; (d) fixed and variable compensation will be defined considering the attributions, responsibilities, experience of the members of the Governance Bodies and the job market, as well as to encourage the achievement of results, being compatible with the Corporate Risk Management and Internal Controls Policy and formulated to not encourage behaviors that raise the risk exposure above the levels approved by the Company’s Board of Directors in its Risk Appetite Statement in the short, medium and long-term strategies adopted by the Company and to encourage the diligent decision-making process by the members of the Governance Bodies; and (e) the compensation program must consider the alignment with the interests of shareholders, focused on longevity and long-term sustainable value creation, as well as the Company’s purpose, mission and values.

9. Power to Approve the Compensation for the Management

9.1. Annually, the Shareholders’ Meeting shall set the overall management compensation, as provided for in the Management’s Proposal. The Board of Directors shall distribute the amount among the members of the Company’s Management, as recommended by the People and Compensation Committee, pursuant to Article 152 of the Brazilian Corporation Law.

9.2. The compensation of the members of the Fiscal Council shall be set by the Shareholders’ Meeting that elects them, pursuant to Article 16, Paragraph 3, of the Brazilian Corporation Law.

10. Compensation Applicable to the Members of the Board of Directors

10.1. The members of the Board of Directors shall be entitled to a fixed monthly compensation, not linked to their attendance to the meetings held by the said body, with the purpose of compensating them for their services in a way that is compatible with their duties, responsibilities and time dedicated to the position. Said compensation must be in line with the Company’s strategic goals, focusing on its longevity and long-term value creation.

10.2. The compensation of the members of the Board of Directors must be proportional to their duties, responsibilities, and time devoted. Therefore, the compensation may be different among the Board Members due to additional responsibilities assumed, for example, participation in Advisory Committees.

10.3. The compensation of the Board of Directors members reflects market practices, verified through periodic compensation surveys conducted by specialized consultants, to align the compensation paid to the Board Members with the best market practices and to maintain the competitiveness of the Company’s compensation strategy.

10.4. The members of the Board of Directors shall not be entitled to any variable compensation.

10.5. The members of the Board of Directors shall be reimbursed by the Company for all travel, accommodation, food allowance, and other expenses that may be incurred to carry out their duties.

11. Compensation Applicable to Members of the Advisory Committees

11.1. The Independent Board Members that are part of the Company’s Advisory Committees are entitled to a fixed monthly compensation for each Advisory Committee, unrelated to their attendance at meetings of such advisory bodies, aimed to compensate them for their services in a way that is consistent with their duties, responsibilities and time dedicated to the position.

11.2. The other members of the Advisory Committees shall not be entitled to any compensation except for the members of the Audit Committee due to their duties, responsibilities, and time devoted to the Audit Committee.

11.3. The members of the Advisory Committees shall be reimbursed, by the Company, for all travel, accommodation, food allowance, and other expenses that may be incurred to carry out their duties.

12. Compensation Applicable to the Members of the Fiscal Council

12.1. The members of the Fiscal Council shall be entitled to a fixed monthly compensation, to be set by the Shareholders’ Meeting that elects them, pursuant to applicable law.

12.2. The monthly compensation of the members of the Fiscal Council, as set forth in Article 162, Paragraph 3, of the Brazilian Corporation Law, shall not be less than ten percent (10%) of the monthly average compensation of each of the Company’s Statutory Executive Officer, not including benefits, representation fees, and profit-sharing.

12.3. The members of the Fiscal Council shall be reimbursed by the Company for all travel, accommodation, food allowance, and other expenses that may be incurred to carry out their duties.

13. Compensation Applicable to the Members of the Statutory Executive Board

13.1 Fixed Compensation. The members of the Statutory ExecutiveBoard shall be entitled to a fixed monthly compensation, set by the Board of Directors, and the amount shall be defined according to, among other items, their individual qualifications,experience, training, level of complexity and responsibility inherent to the duties carried out in comparison with the market practices. This compensation must be in line with the Company’s strategic goals, focusing on its longevity and long-term value creation.

13.2. Variable Compensation. The Statutory Executive Board shall also be entitled to a short and long-term variable compensation, namely:
13.2.1. Short-Term Variable Compensation materialized by an Annual Bonus. This compensation has the purpose of rewarding the achievement and over-achievement of individual goals and Company goals by the members of the Statutory Executive Board, as well as to promote the increase in interest and alignment of the members of the Statutory Board with the Company’s strategic plan, results and short and medium-term goals.
13.2.2. Long-Term Variable Compensation materialized by the Restricted Shares Plan. The purpose of this compensation is to strengthen and renew the long-term commitment of the members of the Statutory Executive Board, focusing on the business sustainability. The Restricted Shares Plan is granted considering the individual performance, fostering the Company’s value proposition based on meritocracy. This plan is based on the Company’s restricted shares and, the Board of Directors shall establish, on an annual basis, the conditions to grant the restricted shares, according to the recommendations provided by the People and Compensation Committee.
13.2.3. Long-Term Variable Compensation materialized by the Cielo Partner Program. This compensation is intended to ensure the Company’s competitiveness in the market and to strengthen its long-term retention strategy for members of the Statutory Executive Board, perceived as special professionals for the business. The “Sócio Cielo” program is based on linking part of or all the short-term variable compensation of the member of the Statutory Executive Board to the acquisition of the Company’s restricted shares, with a corresponding consideration by the Company. Annually, the Board of Directors, based on recommendations by the People and Compensation Committee, shall establish the conditions under which the “Sócio Cielo” will be granted.

13.3 Power to Approve the Criteria for the Variable Compensation. Regarding the long-term variable compensation, the Board of Directors, based on recommendations provided by the Company’s People and Compensation Committee, shall set, annually or when deemed appropriate, the number of restricted shares to be granted and the price of each share granted, as well as the terms and any other conditions related to such shares, pursuant to the Restricted Share Plan.
13.3.1. The variable compensation of the Statutory Executive Board shall be in line with the risk limits defined by the Board of Directors, being expressly forbidden for the same person to control the decision-making process and its respective supervision, thus ensuring that no one will decide on their own compensation.

13.4. Methodology to Calculate the Variable Compensation. The variable compensation must comply with the principles set forth in Item 8 and shall be calculated considering the expected results of the Company’s strategic and business plans, as approved by the Board of Directors.

13.5. Retention and Hiring Incentives. The Statutory Executive Board is entitled to receive retention and/or hiring incentives (“Retention Incentive”), as applicable, to ensure the Company’s competitiveness in the market and strengthen the long-term retention strategy for the Statutory Executive Officers, perceived as special professionals for the business.
13.5.1. The Retention Incentive is materialized by granting specific amounts and, in return, requesting the permanence of the Statutory Executive Officer benefited by the retention incentive for a minimum term established in the agreement that regulates the Retention Incentive.
13.5.2. If a Statutory Executive Officer resigns before the end of the agreed term, he/she must refund of the amount paid by the Company, as an incentive, and this refund must be carried out in compliance with the rules in the agreement that regulates the terms of the Retention Incentive.

13.6. Benefits. The members of the Statutory Executive Board shall be entitled to the following benefits: health and dental care plans, health check-up, private social security, medical supplement, life insurance, meal allowance, vehicle, parking, and mobile phone.

13.7. Non-Competition. Members of the Statutory Executive Board removed from their position (due to resignation, dismissal or end of the term of office) shall be entitled to receive an amount in exchange for a non-competition obligation, committing and undertaking not to compete with the Company and not to provide services to its competitors during the term agreed with the Company.

14. Review of Elements of the Compensation for the Management

14.1. The Company seeks to maintain its compensation practice for the members of its Corporate Governance Bodies updated and competitive. For such, the Company periodically carries out market surveys with specialized consultancies, comparing its practices to those of other reference companies in the market. Eventually, specific surveys are carried out for certain job positions for an even more accurate analysis.

15. Compensation Applicable to Members of the Advisory Forums

15.1. Members of the Advisory Forums shall not be entitled to compensation for their work as members in such forums.

15.2. However, members of the Advisory Forums shall be reimbursed by the Company for all travel, accommodation, food allowance, and other expenses that may be incurred to carry out their duties.

16. Compensation Applicable to those Appointed by the Company to positions in Governance Bodies in the Company’s Subsidiaries and Affiliated Companies

16.1. Those nominated by the Company for positions in the Governance Bodies of its Subsidiaries and Affiliated Companies shall not be entitled to compensation for their work as a member of such bodies. If the Subsidiaries and Affiliated Companies compensate their members of the Governance Bodies, the members nominated by the Company, and who are also employees of the Company, must waive such compensation.

17. Power of the Corporate Governance Committee

17.1. The Corporate Governance Committee shall be the advisory body of the Board of Directors responsible for: (a) evaluating the report or matrix resulting from the prior analysis provided for in aforementioned Item 2.5. and issuing any recommendations to be forwarded to those responsible for nominating members to the Board of Directors, pursuant to this Policy; (b) verifying that nominees for members of the Company’s Governance Bodies comply with this Policy, with the exception of the nominees for members for the Statutory Executive Board, (in particular the criteria set forth in aforementioned Item 1) and making any recommendations regarding the competent body responsible for the approval, including giving support for the Forms provided by the Corporate Governance Office, duly completed and signed by the nominees, as applicable; (c) analyzing, together with the People and Compensation Committee, the market survey provided for in aforementioned Item 14.1. in relation to the compensation of the members of the Company’s Governance Bodies, except for the compensation of the members of the Company’s Statutory Executive Board, and making any recommendations to be sent to the Board of Directors; (d) analyzing, together with the People and Compensation Committee, the future internal and external scenarios and their possible impacts on the compensation applicable to the members of the Company’s Governing Bodies, except for the nominees for the Statutory Executive Board; (e) analyzing and issuing recommendations, on an annual basis, for this Policy to be maintained updated and in accordance with the highest standards of corporate governance and applicable law, always observing the Company’s specific characteristics; and (f) overseeing the implementation and operationalization of this Policy.

17.2. The Corporate Governance Committee may rely on outside consultancy services to validate if the candidates for the position of members of the aforementioned bodies comply with the conditions set forth in this Policy.

18. People and Compensation Committee

18.1. The People and Compensation Committee shall be the advisory body of the Board of Directors responsible for: (a) analyzing the compliance of the nominees for members for the Statutory Executive Board, (in particular the criteria set forth in aforementioned Item 1) and making any recommendations to the Board of Directors, responsible for the approval, including giving support for the Forms provided by the Corporate Governance Office, duly completed and signed by the nominees, as applicable; (b) analyzing the market survey provided for in aforementioned item 14.1. in relation to the compensation of the members of the Company’s Governance Bodies and making any recommendations to be sent to the Board of Directors; (c) analyzing and issuing recommendations to the Board of Directors regarding the strategy, policies and practices adopted or to be adopted by the Company in relation to the compensation of the Company’s Governance Bodies; (d) analyzing the future internal and external scenarios and their possible impacts on the compensation applicable to the members of the Company’s Governing Bodies; (e) analyzing and issuing recommendations, on an annual basis, for this Policy to be maintained updated and in accordance with the highest standards of corporate governance and applicable law, always observing the Company’s specific characteristics; (f) overseeing the implementation and operationalization of this Policy.

18.2 The People and Compensation Committee may rely on outside consultancy services to validate if the nominees for the Statutory Executive Board comply with the conditions set forth in this Policy, as well as specialized consultancies in the areas of compensation. In such cases, the People and Compensation Committee may have direct access to the consultants hired without the involvement or intermediation of the Statutory Executive Board.

IV. Outcome Management

Employees, suppliers or other stakeholders who become aware of any non-compliance with the guidelines of this policy may report it to the Ethics Channel (www.canaldeetica.com.br/cielo or 0800 775 0808), either anonymously or not. The Company’s Ethics Channel is managed by an independent service provider to ensure confidentiality and who is responsible for forwarding the reports filed to the competent body for investigation.

V. Responsibilities

  • Management and Employees: Comply and ensure compliance with this Policy and, when necessary, engage with the Corporate Governance Office and/or Vice-Chairman of Organizational Development for consultations or questions regarding the content and application of this Policy.
  • Management of Affiliated Companies: Area focused on managing and monitoring Subsidiaries and Affiliated Companies, and responsible for the appointments indicated in Item 7 of this Policy.
  • Corporate Governance Office: Comply with and enforce the guidelines set forth in this Policy, maintain this Policy updated in terms of its guidelines, criteria and the process to appoint and select members for the Company’s Corporate Governance Bodies and its Subsidiaries and Affiliated Companies, thus ensuring that any changes to the provisions of this Policy are incorporated into the Policy and answering questions regarding the Policy’s content and application.
  • People, Management and Performance Executive Board: Comply with and enforce the guidelines set forth in this Policy, maintain this Policy updated in terms of its provisions for compensation, thus ensuring that any changes to the provisions of this Policy are incorporated into the Policy and answering questions regarding the Policy’s content and application.

VI. Documentação Complementar

  • Company’s Shareholders Agreement;
  • BACEN Circular Letter 3,681/2013;
  • BCB Resolution 81/2021;
  • Brazilian Code of Corporate Governance for Publicly Held Companies;
  • Code of Best Practices of Corporate Governance;
  • Cielo’s Code of Ethical Conduct;
  • Cielo’s Bylaws;
  • CVM Instruction 308/1999;
  • Brazilian Corporation Law;
  • Corporate Risk Management and Internal Controls Policy;
  • Policy for Related Party Transaction and Other Situations of Conflict of Interests;
  • Charter of the Company’s Statutory Executive Board;
  • Charter of the Company’s Board of Directors;
  • Charter of the Company’s Advisory Committees;
  • Charter of the Company’s Fiscal Council;
  • Charter of the Company’s Advisory Forums;
  • Novo Mercado Regulation.

VII. Concepts and Acronyms

  • Management: Member of the Company’s management bodies.
  • Governance Agents: Consists of “Individuals and bodies involved in the governance system, such as partners, members of the management, members of the fiscal council, auditors, board of directors, fiscal council, etc.”
  • Controlling Shareholder(s): The shareholder, or group of shareholders, bound by a shareholders’ agreement, or under joint control, who exercise the direct or indirect control of the Company, pursuant to the Brazilian Corporation Law.
  • Minority Shareholder(s): The shareholder, or group of shareholders, whose total shares do not exercise direct or indirect control over the Company, pursuant to the Brazilian Corporation Law.
  • Independent Board Member: According to the definition of the Novo Mercado Regulations of B3 – Brasil, Bolsa, Balcão (B3), the board members elected through the option provided for in Article 141, Paragraphs 4 and 5, and Article 239 of the Brazilian Corporation Law shall be considered Independent Board Members.
  • Board of Directors: A collegiate deliberation body focused on fulfilling the duties of guiding and supervising the management of the Executive Board and deciding on the Company’s main business issues, including making strategic, investment and financing decisions, among other matters set forth in Article 142 of the Brazilian Corporation Law and/or the Company’s Bylaws.
  • Fiscal Council: A supervisory body, permanent or not and installed by resolution of the Shareholders’ Meeting, independent from the Company’s management, reporting to shareholders and with the purpose of maintaining the Company’s value . The assignments and powers granted by law to the Fiscal Council cannot be granted to another body of the Company . The members of the fiscal council have individual acting power, despite the collegiate nature of the body.
  • Advisory Committees: Technical advisory bodies of the Board of Directors, which are supporting instruments that increase the quality and efficiency of the Company’s Board of Directors. The Advisory Committees do not have deliberation powers and their recommendations do not bind the resolutions taken by the Board of Directors.
  • People and Compensation Committee: A corporate body that advises the Board of Directors in relation to the provisions of this Policy, as provided for in Item 18.
  • Corporate Governance Committee: A corporate body that advises the Board of Directors in relation to the provisions of this Policy, as provided for in Item 19.
  • Statutory Executive Board : A corporate body responsible for the management of the company’s business, implementing the strategy and general guidelines approved by the Board of Directors. Through formalized processes and policies, the Statutory Executive Board enables and disseminates the Company’s purposes, principles, and values.
  • Advisory Forums: Technical advisory bodies of the Statutory Executive Board, which are supporting instruments that increase the quality and efficiency of the Company’s Statutory Executive Board.
  • Governance Bodies: Bodies that make up the Corporate Governance System of the Company and its Subsidiaries and Affiliated Companies.
  • Corporate Governance System: A system through which companies and other organizations are driven, monitored and encouraged, involving relationships between partners, the board of directors, the executive board, the supervisory and control bodies, and other stakeholders.
  • Affiliated Companies: Entities in which the Company holds, at least, a ten percent (10%) interest of their share capital, without, however, controlling them, pursuant to Article 243, Paragraph 1, of the Brazilian Corporation Law.
  • Subsidiaries: Entities in which the Company has significant influence and, pursuant to Article 243, Paragraphs 4 and 5, of the Brazilian Corporation Law, (i) there is a significant influence when the Company holds, or exercises, the power to participate in the decisions of an entity’s financial or operating policies, without, however, controlling it; and (ii) the significant influence will be assumed when the Company owns twenty percent (20%) or more of the voting capital of the said entity, without controlling it.
  • Stakeholders: All relevant public with interest in the Company, or also, individuals or entities assuming any type of direct or indirect risk towards the company. These include, among others: shareholders, investors, employees, society, customers, suppliers, creditors, governments, regulatory bodies, competitors, press, associations and class entities, users of electronic payment methods and non-profit organizations.

VIII. General Provisions

The Company’s Board of Directors is responsible for amending this Policy whenever necessary.
This Policy takes effect on the date of its approval by the Board of Directors and revokes any contrary documents