B/ Policy on fixed and variable remuneration and granting of performance shares to the executive corporate officer
The key for allocating target annual remuneration
The annual remuneration of the executive corporate officer consists of a fixed remuneration, an annual variable remuneration and the granting of performance shares.
It does not include any exceptional components.
The Board of Directors adopts the various components of this remuneration, paying attention to the necessary balance between each of them.
Each component of the target annual remuneration corresponds to a well-defined and clearly substantiated objective.
The various components of annual remuneration form a balanced whole with a breakdown that is approximately:
- 50/50 between fixed remuneration and target annual variable remuneration(1);
- 50/50 between annual remuneration and long-term remuneration (performance shares)(2);
- 50/50 between cash remuneration and share-based remuneration; and
- 75/25 between remuneration subject to performance conditions and remuneration not subject to performance conditions.
This diagram showing the balance between the different components of the target annual remuneration
- Fixed Remuneration 25%
-
Performance shares 50%
- Target annual variable remuneration 25%
- 50% Cash Remuneration: Annual Remuneration (1)
- 50% Share-based Remuneration: Long-term remuneration (2)
- 25% of Remuneration not subject to performance conditions
- 75% of Remuneration subject to performance conditions
N.B.: the employer’s contributions to the additional social protection plans are to be added to the above.
Fixed remuneration
The fixed remuneration must reflect the responsibilities of the executive corporate officer, his/her level of experience and skills.
It is stable for several years and may be re-examined at the time of renewal of the term of office. It serves as a basis to determine the maximum percentage of the target annual variable remuneration.
Annual variable remuneration
The target annual variable remuneration may amount to a maximum of 100% of the fixed remuneration.
The annual variable remuneration may exceed 100% of the fixed remuneration and up to a maximum of 120% of this remuneration in order to be able to remunerate outperformance. This outperformance is assessed on a criterion-by-criterion basis.
The aim is not to encourage inappropriate and excessive risk taking. For this purpose, the annual variable remuneration remains reasonable in comparison with the fixed portion.
The variable remuneration is designed to align the executive corporate officer’s remuneration with the Group’s annual performance and to promote the implementation of its strategy year after year.
The variable remuneration is based on precise performance appraisal criteria determined at the beginning of the year by the Board of Directors.
These criteria are financial, non-financial and qualitative.
The financial and non-financial criteria are simple and quantifiable. They represent a predominant portion of the annual variable remuneration. A limit is set on the qualitative portion.
The weighting of each of the criteria and the objectives to be met are set at the beginning of the year in question and communicated to the executive corporate officer.
(1) Annual variable remuneration may reach 120% of the annual fixed remuneration in the event of outperformance. See below.
(2) Long-term remuneration (performance shares) may not exceed 60% of annual remuneration. See below.