2022 Universal Registration Document

The Audit Committee consists of 60% of independent Directors (i.e., three out of five, excluding Directors representing the employees). The Committee is chaired by Ms Virginie Morgon, an independent Director. The Board of Directors considers this composition satisfactory in light of the necessary presence of two Directors from L’Oréal’s majority shareholders and its choice of maintaining a limited number of members in order to ensure the efficiency of the work of this Committee which requires a certain level of expertise in finance or accounting.

The Nominations and Governance Committee currently consists of 50% independent Directors. The Committee is chaired by Ms Sophie Bellon, an independent Director.

Furthermore, in 2021, the Haut Comité de Gouvernement d’Entreprise (High Committee on Corporate Governance) restated that “an Audit Committee in which three of the five members are independent, or a Remuneration Committee in which two of the four members are independent, complies with the spirit of the code as long as it is chaired by an independent Director” and acknowledged that a committee in which 50% (rather than a majority) of the members are independent Directors complies with the recommendation of the Code as long as the chairman of the committee is independent (November 2021 report).

Two new Directors representing the employees joined the Board of Directors on21 April 2022. It is common for new Directors to serve on Committees following a period of familiarisation that helps them to understand how the Board operates and the major challenges facing the Company. At the end of this period, the Nominations and Governance Committee made proposals to the Board of Directors regarding the new Directors joining the Committees. At its meeting on 7 December 2022, on the recommendation of the Nominations and Governance Committee, it was decided that Mr Thierry Hamel and Mr Benny de Vlieger would join the Human Resources and Remuneration Committee and the Audit Committee respectively at the end of the Annual General Meeting of 21 April 2023.

The Board of Directors considered that the objective pursued by this recommendation can be fully achieved by maintaining the suspension of the employment contract and clearly separating the benefits related to the employment contract from those tied to his corporate office.

This position of the Board applies to the current office of Mr Nicolas Hieronimus as Chief Executive Officer and, in the future, to any new executive officer appointed who has over 15 years of service in the Group at the time of appointment. L’Oréal’s ongoing policy has been to appoint employees who have completely succeeded in the various stages of their career in the Group as executive corporate officers.

This is reflected in Nicolas Hieronimus’s appointment as Chief Executive Officer from1 May 2021, after a highly successful career in the Group over the previous 34 years. The Board of Directors noted that if, in accordance with the AFEP-MEDEF recommendation, his employment contract with L’Oréal were to be terminated, Mr Nicolas Hieronimus would lose the status he acquired as a result of the 34 years he spent working for the Group as an employee.

The AMF, in its Recommendation 2012-02 last updated on 5 January 2022, considers that a senior manager’s length of service as a company employee and their personal situation may justify maintaining their employment contract if the company provides explanations adapted to the individual situation of each executive (length of service and description of the benefits granted under the employment contract).

As such, in respect of the employment contract, pursuant to the provisions of the National Collective Bargaining Agreement for the Chemical Industries and in the event of termination of the employment contract, the indemnity due in consideration of the non-compete clause would be payable monthly for two years on the basis of two-thirds of the monthly fixed remuneration attached to the suspended employment contract unless Mr Hieronimus were to be released from application of the clause. This clause is not applicable in the event of voluntary retirement or retirement at the Company’s request, meaning that no non-compete compensation would be paid in this situation.