The Board of Directors is fully aware of the challenges of sustainable Governance, notably in light of European legislative initiatives and the growing expectations of authorities and stakeholders.
It is essential for the Board to count on a committed, experienced and competent Chairman, like Mr Jean‑Paul Agon, who is recognised for his involvement in governance issues and in relations with stakeholders.
Mr Jean-Paul Agon, who organises the work of the Board of Directors, which he has chaired since 2011, has already brought the Governance of L’Oréal to an exemplary level, while successfully assuming the General Management of the Company. His full-time commitment to the benefit of the Company’s Governance is an importance source of added value for the Board, which wants to highlight the expertise of Mr Jean-Paul Agon whose in-depth knowledge of the company, its environment and its strategic challenges is a major asset.
The Chairman’s remuneration matches the Board’s goal of ensuring the continuity of its work and to allow development in light of the increasingly important and expected duties of a Board of Directors.
The Board has also taken into consideration the extensive duties it has decided to entrust to Mr Jean-Paul Agon in his position as Chairman of the Board of Directors, as described in section 2.1.2.3.
Finally, the Board took into account of the expectations of the stakeholders, by placing this remuneration in perspective with the remuneration offered by an international reference panel that was defined with the assistance of an external independent consultancy firm.
The analysis of remunerations of Chairs of Boards of Directors of companies in the reference panel used, which includes six companies with a dissociated governance structure already used in the reference panel for the remuneration of executive corporate officers, reports an average remuneration of€1,658,900 and a median remuneration of €746,200 with large standard deviations.
As a result of this analysis and on the recommendation of the Human Resources and Remuneration Committee, the Board of Directors at its meeting of 9 February 2023 propose to the Annual General Meeting of 21 April 2023 to set the fixed annual remuneration of Mr Jean-Paul Agon, Chairman of the Board, at €1,600,000.
Mr Jean-Paul Agon notified the Company of the termination of his employment contract on 30 April 2021, in order to be able to benefit from his mandatory retirement rights as from1 May 2021. Under his employment contract, he is able to benefit from a gross annual pension benefit of €1.59 million under L’Oréal’s supplementary defined benefit pension scheme “Garantie de Retraite des Membres du Comitéde Conjoncture” (Pension Cover of Members of the Comité de Conjoncture) which has been closed since 31 December 2000(1). The Board of Directors agreed to Mr Jean-Paul Agon’s wish to waive his entitlement to this supplementary pension benefit once again for 2023, so as not to combine it with a fair remuneration for the duties of Chairman as set out by the Board in this policy.
| Amount | Description | |
|---|---|---|
| Fixed remuneration | Fixed remunerationAmount €1,600,000 |
Fixed remunerationDescription At its meeting of 9 February 2023, on the recommendation of the Human Resources and Remuneration Committee, the Board of Directors is proposing to the Annual General Meeting of 21 April 2023 that Mr Jean-Paul Agon’s fixed remuneration be maintained at the gross annual amount of €1,600,000. |
| Benefits in addition to remuneration | Benefits in addition to remunerationAmount
|
Benefits in addition to remunerationDescription
Benefits in kind Mr Jean-Paul Agon will benefit from the material resources needed for the performance of his office such as, for example, the provision of a car with a driver. These arrangements, which are strictly limited to professional use, to the exclusion of all private use, are not benefits in kind. Additional social protection schemes The Chairman of the Board will benefit from the same employee benefit scheme as the senior managers of the Company. |
Remuneration is established in such a way as to guarantee the due and proper application of the policy and rules set by the Board of Directors. The Board relies on the work and recommendations of the Human Resources and Remuneration Committee, composed of six Directors, 60% of whom are independent Directors, including its Chairwoman, and one member of whom is a Director representing the employees(2).
The corporate officer is not a member of the Committee. The Committee’s recommendations are made taking into account the studies carried out at its request by an independent consulting firm.
The Committee met 4 times in 2022 and its work is detailed in section 2.3.3. “Activities of the Board Committees”.
The Committee has the necessary information to prepare its recommendations and more particularly to assess the performance of the corporate officer in light of the Group’s short and long-term objectives.
The purpose of this organisation and this process is to prevent any conflicts of interest.
(1) The benefit of this pension was approved, in the context of the related-party agreements procedure, by the Annual General Meeting of 27 April 2010 and by the Annual General Meeting of 17 April 2018 at the time of the renewal of the current term of office.
(2) When Ms Ana Sofia Amaral’s term of office ended, it was decided that Mr Thierry Hamel would join this committee in April 2023, one year after joining the Board of Directors, in line with the Board’s usual practice.
