2022 Universal Registration Document

Chapter 2 : Corporate governance

Adjustment of the remuneration policy in the event of exceptional circumstances

In accordance with article L.22-10-8 of the French Commercial Code, the Board of Directors can, in the event of exceptional circumstances, make an exception from the application of the remuneration policy, provided that the exemption applied is temporary and compliant with the company's interest and necessary to ensure the company's continuity or viability. In such case, the Board of Directors would be able to grant an element of remuneration not provided for in the remuneration policy previously approved by the Annual General Meeting, but necessary in view of these exceptional circumstances.

The Board of Directors may also, within the framework of its discretionary power, adapt the remuneration policy if unforeseeable or exceptional circumstances so justify. Thus, for example, the recruitment of a new corporate officer under unforeseen conditions might require the temporary adaptation of some existing remuneration elements or the proposal of new remuneration elements. In this case, the Board of Directors would take into account the experience, expertise and remuneration of the executive concerned in order to propose exceptional remuneration that could not exceed the amount of the benefits he or she would have had to relinquish by leaving his or her previous role.

It might also be necessary to amend, subject to compliance with the caps determined in the remuneration policy, the performance conditions governing the acquisition of all or some of the existing remuneration elements in the event of exceptional circumstances resulting from a significant change in the Group’s scope following a merger or sale, the acquisition or creation of a significant new business activity or the elimination of a significant business activity, a change in accounting policy or a major event affecting the markets and/or L’Oréal’s major competitors.

The Board of Directors will make its decisions on the recommendation of the Human Resources and Remuneration Committee and, when necessary, after obtaining the opinion of an independent consulting firm.

2022 work schedule of the Human Resources and Remuneration Committee concerning the remuneration of the corporate officer
February 2022
  • Recommendations on the remuneration of corporate officers for 2021:
    • evaluation of the 2021 annual variable remuneration after review of the non-financial results, for Mr Agon (Chairman and Chief Executive Officer from 1 January to 30 April 2021) and Mr Hieronimus (Chief Executive Officer from 1 May to 31 December 2021);
    • draft Say on Pay ex post resolutions.
  • Long-term incentive plan:
  • recognition of the performance levels achieved for the expiring 2018 Plan for the Conditional Grants of Shares (ACAs).
  • Presentation of the 2022 study on the remuneration of corporate officers:
    • panel, balance and structure of remuneration, link between performance and remuneration.
  • Recommendations concerning the 2022 remuneration policies:
    • applicable to corporate officers (Chief Executive Officer and Chairman of the Board);
    • review of draft resolutions.
April 2022
  • Report on investor meetings on the remuneration policies for corporate officers
October 2022
  • Presentation of L’Oréal’s remuneration policy:
    • coherence between the schemes in place in the company.
  • 2022 ACAs Plan:
    • proposed award for the Chief Executive Officer, application of non-financial performance conditions for the first time (20% weighting).
December 2022
  • 2023 remuneration policy:
    • review of issues raised following initial discussions with investors and proxy advisors;
    • ratios on pay differentials: widening of the scope.

2.4.2. Remuneration of directors and corporate officers for 2022

The information in this section relating to the remuneration of L’Oréal’s directors and corporate officers (the Directors, the Chairman of the Board of Directors and the Chief Executive Officer), as required by Articles L. 22-10-9 I and L. 22-10-34 I and II of the French Commercial Code, is subject to the approval of the Annual General Meeting of 21 April 2022 and voting on resolution nos. 13, 14 and 15.

2.4.2.1. Remuneration paid during the 2022 financial year or allocated for that year to Directors

A total amount of €1,297,925, within the limits of the €1,600,000 budget approved by the Annual General Meeting of17 April 2018, will be paid to the Directors for financial year 2022.

The Board of Directors met seven times in 2022 (including one non-remunerated meeting) and 19 meetings of its committees were organised.