L’Oréal’s social policy permits the signing of collective agreements every year. In 2022, 204 agreements were signed in France and 94 agreements were signed in the rest of the world. In total, the number of agreements in force on31 December 2022 was 772, 432 of which were in France and 121 of which wholly or partially involve health and safety issues. These agreements primarily cover work organisation, remuneration and working conditions (working hours, quality of life at work, professional equality, remote working, health and safety, etc.). They contribute to the proper functioning and to the performance of the Group by strengthening employee participation and dialogue with their representatives.
L’Oréal’s remuneration policy is an integral part of the Group’s development strategy. L’Oréal wants to attract and retain talents, propose motivating career paths and encourage performance and engagement of its employees while accompanying the evolution of its jobs and business.
The Group ensures that all employees receive at least the minimum salary set by local law or applicable collective agreements. In most of the countries, L’Oréal’s lowest base salaries are much higher than the national minimum wagesin force.
A remuneration monitoring process is in place to adjust, if necessary, the remuneration of the Group’s permanent employees so that they can receive a living wage, which is generally higher than the minimum wage. A living wage covers basic needs and is calculated in accordance with best practice by the Fair Wage Network, an internationally recognised NGO.
A total rewards approach is used to provide each employee with a competitive rewards package including both compensation elements (fixed pay, variable pay, long-term incentives) and employee benefits.
The Group is implementing a remuneration policy that combines external competitiveness with internal equity. This rewards both individual and collective performance. In addition, employees share in the Company’s results through results-based collective profit-sharing schemes rolled out globally.
The L’Oréal remuneration policy is formalised within a Rewards charter and is implemented by a network of Rewards experts present in the different countries. External surveys are conducted every year with specialist firms to ensure L’Oréal’s competitive positioning in relation to each local reference market.
The ambition is for all employees to understand their remuneration and how it is determined. The Group makes sure that it communicates clearly and transparently on this subject.
The remuneration policy is supported by an annual employee performance assessment system applied in all subsidiaries. It enables the communication of remuneration decision making principles, processes and outcomes. The Group is implementing a new HR information system that will enhance and update communications on this subject.
| € millions | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total | Total 20206,124 |
Total 20216,471 |
Total 20227,264 |
The comparison between the three years takes into account the impacts of foreign exchange and is not representative of the real changes in personnel costs.
Keen to share its growth with its employees, L’Oréal launched its first worldwide employee share ownership plan in 2018. The results were very satisfactory. L’Oréal wanted to provide employees wishing to support the growth of the company and participate in its strategic plan the opportunity to do so, by launching two new plans in 2020 and 2022. These plans are designed to gather, unite and increase the loyalty of employees worldwide by enhancing a feeling of belonging, engagement and social cohesion.
Eligible employees had the possibility of purchasing shares with preferential conditions including, where permitted by local law, a 20% discount on the share reference price, with an employer matching share contribution of up to four free shares.
The plan was rolled out in 62 countries in 2022, seven more than in 2020. It was a big success with a 35% subscription rate, similar to the first two plans. This is a high percentage compared to other companies that have set up employee shareholding plans(1).
L’Oréal sets up long-term incentive plans in favour of its employees and corporate officers in an international context. These take the form of grants of performance shares. These grants serve a dual purpose: to motivate and include the major contributors in the Group’s future successes, and to strengthen the commitment and feeling of belonging of its beneficiaries by fostering long-term loyalty in a context of increased competition for talent.
In accordance with the Group’s strategic objectives, the choice of beneficiaries and the vesting criteria are determined by a specific policy. The Board of Directors, subject to the recommendation of the Human Resources and Remuneration Committee, approves the conditional grant of shares and lays down the applicable rules. The vesting of these shares is subject to the achievement of performance targets and the beneficiary’s continued presence in the Company. Performance conditions include both financial and non‑financial performance criteria (see section 7.4.).
53% of the beneficiaries of the 13 October 2022 plan are women. More than 4,200 employees, representing approximately 10.5% of the managers around the world, nearly 58% of whom are in international subsidiaries, benefit or have benefited from at least one conditional grant of shares plan since 2017 and were still employees of the Company on 31 December 2022.
(1) 2022 survey on employee share ownership by the French Federation of Employee Shareholder Associations and Former Employees – FAS. The survey includes entities in France that practice employee share ownership and performs a recurring analysis between these same entities.
