These studies are based on an international panel of world leaders, which serves as a reference for the comparative remuneration studies.
This panel is made up of French and international companies that hold the position of global leader. These companies operate on similar markets and are, in the cosmetics sector, direct competitors of L’Oréal, or operate on the wider everyday consumer goods market, as regards all or part of their business activities.
The panel applicable for 2022 comprised Directors of the following 14 companies:
PANEL SELECTED FOR ANALYSIS OF THE POSITIONING OF THE REMUNERATION FOR THE CHIEF EXECUTIVE OFFICER |
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|---|---|---|---|
| Beiersdorf | Colgate Palmolive | Coty | Danone |
| Kimberly Clark | Kering | LVMH | Procter & Gamble |
| Reckitt Benckiser | Unilever | ||
It is used to assess the competitiveness of the executive corporate officer’s total remuneration. This panel reports an average remuneration of €9,539,600 and a median remuneration of €8,357,500. In terms of market capitalisation, L’Oréal is above the third quartile of companies on this panel.
It should be noted that the Company’s remuneration policy, specifically that in place for senior management executives, aims to position their remuneration between the median and the third quartile. The studies conducted with the independent consulting firm also enable the Committee to measure:
To determine the positioning of the Chairman’s remuneration, a panel was defined with the help of an independent consultancy firm. It is composed of 17 international companies, selected on the basis of governance, industry, size and nationality.
They are the following dual governance companies:
PANEL SELECTED FOR ANALYSIS OF THE POSITIONING OF THE REMUNERATION FOR THE CHAIRMAN OF THE BOARD OF DIRECTORS |
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|---|---|---|---|---|---|
| AstraZeneca | AB In BEV | BASF | Bayer | Coty | Diageo |
| Estée Lauder | GSK | Henkel | Kraft Heinz | Linde | Nestlé |
| Novartis | Reckitt Benckiser | Roche | Starbucks | Unilever | |
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 the executive corporate officer, reports an average remuneration of €1,658,900 and a median remuneration of €746,200 with large standard deviations.
This information enables it to assess the performance of the Company and that of its executive corporate officer both from a financial standpoint and in non-financial areas.
The Group’s annual economic and financial results are presented every year completely and exhaustively to the members of the Human Resources and Remuneration Committee at its Committee meeting in February, and are used as a basis for the assessment of the financial performance criteria for the executive corporate officer’s variable remuneration.
The principles of the Human Resources policy are regularly presented to the Committee members or at a Board of Directors meeting by the Chief Human Relations Officer. The Directors are therefore able to verify the consistency between the remuneration of the executive corporate officer and the remuneration and employment conditions of the Company’s employees.
Similarly, the Chief Ethics, Risk and Compliance Officer also regularly explains the policy and the actions taken in this field.
2 members of the Human Resources and Remuneration Committee are members of the Strategy and Sustainability Committee at which the actions taken with regard to the programmes concerning the Group’s social and environmental responsibility are discussed.
This information contributes to the assessment of the non‑financial and qualitative portion of the annual variable remuneration.
The Committee can also carry out a more in-depth evaluation of the Company’s performance by contacting the Company’s main senior managers, after having informed the General Management.
This information enriches their vision of the strategy and performances of the Company and its executive corporate officer.
Recommendations are made on these bases to the Board of Directors, which then makes its decisions on the executive corporate officer’s remuneration collectively, in accordance with the remuneration policy approved by the Annual General Meeting.
The organisation of the work of the Committee on the remuneration of the executive corporate officer is shown in the chart below.
The Human Resources and Remuneration Committee carefully analyses the law and reports concerning executive remuneration, notably the French financial markets authority’s (AMF) report on corporate governance and the remuneration of executives of listed companies, and the report of the High Committee on Corporate Governance.
It is mindful of the observations and requests of investors and strives to accommodate them while preserving consistency in the remuneration policy adopted by the Board and subject to constraints relating to the confidentiality of certain information.
