These criteria are the following:
- for 60% of the annual variable remuneration:
- financial criteria directly correlated with the Company’s performance indicators:
- evolution in comparable sales as compared to the budget (15%),
- evolution in market share compared to that of key competitors (15%),
- evolution in operating profit as compared to the budget (10%),
- evolution in net earnings per share as compared to the budget (10%), and
- evolution in cash flow as compared to the budget (10%);
- financial criteria directly correlated with the Company’s performance indicators:
- for 40% of the annual variable remuneration:
- non-financial criteria, linked in particular to:
- the progress of the L’Oréal for the Future programme, which combines L’Oréal’s commitments to sustainable development for 2030 (10%),
- the implementation of the Human Resources policy with special attention to the development of gender balance in the management bodies (7.5%), and
- the digital development policy (7.5%);
- qualitative criteria (15%).
- non-financial criteria, linked in particular to:
The quantifiable, financial (60%) and non-financial (25%) criteria account for 85% of annual variable remuneration.
Details of weighting of annual variable remuneration
This diagram shows the details of weighting of annual remuneration.
60% Financial criteria
- 15% Sales
- 15% Growth in sales/panel
- 10% Operating profit
- 10% EPS
- 10% Cash Flow
40% Extra-financial and qualitative criteria
- Extra-financial criteria 25%
- 10% CSR L’Oréal for the Future programme
- 7.5% Human Resources
- 7.5% Digital Development
- Qualitative criteria 15%
- 7.5% Management
- 7.5% Image, company reputation, relationships with stakeholders
Details of non-financial criteria linked to the progress of the L’Oréal for the Future programme used to assess the performance of the executive corporate officer
TRANSFORMING OUR BUSINESS
Fighting climate change
- By 2025, achieving “carbon neutral” (1)status for all Group sites by improving energy efficiency and using 100%renewable energy.
- By 2030, average reduction of 50% per finished product of greenhouse gas emissions related to the transport of Group products compared with 2016.
Managing water sustainably
- By 2030, 100% of the water used in the Group’s manufacturing processes will be recycled and reused in a loop.
Respecting biodiversity
- By 2030, 100% of ingredients in the Group’s formulas and bio-sourced packaging materials will be traceable and come from sustainable sources.
Preserving natural resources
- By 2030, 95% of ingredients in the Group’s formulas will be bio-sourced, and come from abundant minerals or circular processes.
- By 2030, 100% of the Group’s plastic packaging will be recycled or bio-sourced (target of 50% by 2025).
EMPOWERING OUR ECOSYSYEM IN OUR TRANSFORMATION
- By 2030, all Group products will be eco-designed.
- By 2030, 100,000 people from under privileged communities will be helped by the Group to access employment.
Insofar as the payment of variable and exceptional elements allocated to the executive corporate officer are subject to the approval of the Annual General Meeting of shareholders, no provision has been made for an extension period or the possibility for the Company to demand the return of the annual variable remuneration.
(1) A site can claim “carbon neutral” status if it meets the following requirements:
- Direct CO2 (Scope 1) = 0, with the exception of: the gas used for catering, the fuel oil used for sprinkler tests, fossil energy consumptions during maintenance of on-site renewable facilities, cooling gas leaks if they are lower than 130 tonnes CO2eq./year; and
- Indirect CO2 Market Based (Scope 2) = 0. The renewable energy sources must be located on site or less than 500 kilometres from the site, and be connected to the same distribution network. The “carbon neutral” status, as defined above, is achieved without carbon offsetting. See section 4.3.1.1.3. B/.