6.2 Corporate officers’ compensation

The information required by French law 2019-486 dated May 22, 2019 on corporate growth and transformation (“Pacte law”) and the related enabling legislation is included in the information below, which presents the compensation of corporate officers as follows:

  • the first sub-section (6.2.1) presents the corporate officers’ compensation policy to be submitted to shareholders for approval (ex ante vote) at the Combined General Meeting of May 11, 2021, in the 10th resolution (Chairman and Chief Executive Officer) and the 11th resolution (members of the Board of Directors other than the Chairman and Chief Executive Officer), in accordance with Article L. 22-10-8 of the French Commercial Code;
  • the second sub-section (6.2.2) presents the disclosures referred to in Article L. 22-10-9 (I.) of the French Commercial Code, concerning the total compensation paid during, or awarded for, the 2020 financial year to the corporate officers for their services in this capacity. The said disclosures will be submitted to shareholders for approval (global ex post vote) at the Combined General Meeting of May 11, 2021, in the 13th resolution, pursuant to Article L. 22-10-34 (I.) of the French Commercial Code;
  • the third sub-section (6.2.3) presents the fixed, variable and exceptional components of the total compensation and the benefits of any kind paid during, or awarded for, the 2020 financial year to Mr. Bertrand Dumazy, Chairman and Chief Executive Officer, and which will be submitted to shareholders for approval (specific ex post vote) at the Combined General Meeting of May 11, 2021, in the 14th resolution, pursuant to Article L.22-10-34 (II.) of the French Commercial Code; and
  • the fourth and final sub-section (6.2.4) presents additional disclosures concerning corporate officers’ compensation not submitted to shareholders for approval.

 

6.2.1 Corporate officers’ compensation policy (ex ante vote by shareholders)

Decision-making process

The compensation policy is set by the Board of Directors based on a recommendation by the Compensation and Appointments Committee. The Board considers the compensation policy as a whole and takes into account each of its components, which are as follows:

  • for members of the Board of Directors: annual compensation, comprising a fixed and a variable portion (previously referred to as “directors’ fees”);
  • for the Chairman and Chief Executive Officer: annual fixed compensation, annual variable compensation, long-term compensation, other commitments and benefits.

The Compensation and Appointments Committee meets several times a year to discuss relevant subjects and performs preparatory work conducted under the supervision of the committee’s Chairman. This work includes:

  • reviewing corporate officers’ compensation data from similar companies;
  • monitoring changes in corporate governance best practices, guidelines and codes;
  • and, regarding the Chairman and Chief Executive Officer, analyzing his performance and that of the Company, ensuring that objectives are in line with Group strategy and shareholders’ interests. This work is used as a basis to assess the prior year’s performance and set targets and compensation for the following year.

The Compensation and Appointments Committee regularly engages external compensation consultants, in particular the firm Mercer, to perform a benchmark study of the corporate officers’ compensation.

This study is based on a peer group of French companies from a variety of sectors included in the SBF 120 index with similar characteristics to the Group, selected based on the following four criteria: market capitalization, operating income, total number of employees and percentage of employees located abroad.

The compensation policy is reviewed at least once a year, giving due consideration in particular to changes in compensation-related laws and regulations, best practices, guidelines and corporate governance codes, as well as the votes cast by shareholders and, as the case may be, any opinions expressed during the General Meeting.

The Board of Directors and the Compensation and Appointments Committee pay close attention to preventing and managing any conflicts of interest that may arise during the decision-making process, in accordance with the policy on the prevention of conflicts of interest set out in the Internal Regulations of the Board of Directors.

Concerning the components of the corporate officers’ compensation:

  • the Chairman and Chief Executive Officer’s annual fixed compensation is revised periodically (at fairly long intervals or when his appointment is due to be renewed), taking into account his performance and market practices. However, it may be revised earlier than that in the event of a significant change in the scope of his responsibilities or if there is a wide gap as to his positioning on the market. In these specific circumstances, the revised annual fixed compensation and the reasons for its revision will be disclosed;
  • the Chairman and Chief Executive Officer’s annual variable compensation and long-term compensation are reviewed annually;
  • the compensation of the members of the Board of Directors is revised periodically, taking into account market practices.