2022 Universal Registration Document

Chapter 2 : Corporate governance

which stipulated the closure of all defined benefit schemes governed by Article L. 137-11 of the French Social Security Code.

The main features of this scheme are as follows:

  • around 340 senior managers (active or retired) are concerned;
  • the minimum length of service requirement was 10 years at the time of closure of the scheme on 31 December 2015;
  • the income guarantee is calculated on the basis of the number of years of professional service in the Company until 31 December 2019, capped at 25 years, each year leading to a progressive and regular increase of 1.8% in the level of the guarantee. The income guarantee may not exceed 50% of the calculation base or exceed the average of the fixed portion of salaries; and
  • the guarantee is financed by contributions paid to an insurance institution. These contributions are deductible from corporate income tax and are subject to the employer’s contribution as provided by Article L. 137-11, 2a) of the French Social Security Code at a rate of 24%.

The pension rights of Mr Nicolas Hieronimus are no longer likely to change insofar as he has more than 25 years of service, the ceiling above which no additional annuity is granted under this scheme.

For information purposes, the gross estimated amount of the pension that would be paid to Mr Nicolas Hieronimus, under L’Oréal’s “Garantie de Ressources des Retraités Anciens Cadres Dirigeants” (Retirement Income Guarantee for Former Senior Managers) scheme, had he been able liquidate on 31 December 2022 his full-rate pension rights under French Social Security, after 34 years of service within L’Oréal, would represent €1.6 million.

This information is given as an indication after estimating the main pension rights accrued by Mr Nicolas Hieronimus as a result of his professional activities, according to the rules for payment of such pensions in force at 31 December 2022,which may be subject to change.

The amount of the pension paid to Mr Nicolas Hieronimusunder L’Oréal’s “Garantie de Ressources Dirigeants” (income guarantee for senior managers) will only be calculated on the date when he applies for all his pensions.

As a reminder, the rights to the defined benefit pension are uncertain and conditional on the completion of the beneficiary’s career in the Company. The funding of this scheme by L’Oréal cannot be broken down individually by employee.

4) AMF summary table

The table set out below, presented in the form recommended by the French Financial Markets Authority (AMF), clearly shows that there are no concurrent benefits under the suspended employment contract and the corporate office. It is also stated that the AMF considers that a company complies with the AFEP-MEDEF Code when it explains the maintenance of the employment contract of a senior manager as an employee in the Company and his personal situation and provides detailed substantiation in this respect(1).

  Employment contract  Supplementary pension scheme (2)  Indemnities or benefits due or which may become due as a result of termination or change of duties(3) Indemnities relating to anon-compete clause (4) 
  Yes No Yes No Yes No Yes No

Mr Jean-Paul Agon 

Chairman of the Board

   X   X   X   X

Mr Nicolas Hieronimus (1) 

Chief Executive Officer

 X   X     X X

(1) Mr Nicolas Hieronimus has been a Director since 20 April 2021, and has served as Chief Executive Officer since 1 May 2021. Mr Nicolas Hieronimus’ employment contract is suspended for the entire length of his executive corporate office. This suspension was approved by the Annual General Meeting on 20 April 2021.

(2) Mr Nicolas Hieronimus belongs to the “Garantie de Ressources des Retraités Anciens Cadres Dirigeants” (Retirement Income Guarantee for Former Senior Managers)scheme, details of which are given in chapter 4. This defined benefit pension scheme makes the granting of entitlement to benefits conditional on the beneficiary’finishing their career in the company; L’Oréal does not finance them on an individual basis per employee.

(3) No indemnity is due for termination of the corporate office. Under the employment contract, pursuant to the schedule of indemnities of the French National Collective Bargaining Agreement for the Chemicals Industry, in the event of dismissal, except in the event of gross misconduct or gross negligence, the dismissal indemnity could not be greater than 20 months of the remuneration payable under the employment contract (see section 2.4.3.4. on the cumulative amount of the contractual indemnity and the indemnity due in consideration of the non-compete clause).

(4) In respect of the employment contract, pursuant to the provisions of the National Collective Bargaining Agreement for the Chemical Industries, in the event of termination of the employment contract (excluding voluntary or compulsory retirement), the indemnity due in consideration of the non-compete clause would be payable every month for two years on the basis of two thirds of the monthly fixed remuneration related to the employment contract unless the executive corporate officer were to be released from application of the clause (see 2.4.3.4. on the accumulated amount of the convention indemnity and the indemnity due in consideration of the non-compete clause).

(1) AMF, Recommendation no. 2012-02, last updated on 5 January 2022.