Pursuant to the criterion relating to sales, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, L’Oréal must outperform the average growth in sales of the panel of competitors. Below this level, the number of finally vested shares is in decline. If the L’Oréal’s comparable growth in net sales is lower than the average growth in net sales of the panel of competitors, no shares will be finally vested under this criterion.
Pursuant to the criterion related to operating profit, a level of growth, defined by the Board, but not made public for confidentiality reasons, must be met or exceeded in order for all free shares granted to be finally vested by the beneficiaries at the end of the vesting period. Below this level, the number of finally vested shares is in decline. If the operating profit does not increase in absolute value over the period, no shares will finally vest pursuant to this criterion.
With regard to the criterion of fulfilling commitments made under the L’Oréal for the Future programme, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, a certain average level of achievement of the L’Oréal for the Future Commitments, defined by the Board and made public, must be reached over the period. Below this level, the grant decreases. No shares will vest if the average of the results for the L’Oréal for the Future Commitments falls below the minimum level defined by the Board and made public.
Pursuant to the criterion relating to gender balance in strategic positions, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, the average representation of one of the sexes must account for at least 40% of employees in strategic positions. Below this level, the grant decreases. No shares will vest in relation to this criterion if the average representation of one of the sexes is less than 35% over the vesting period.
The results recorded each year to determine the levels of performance achieved are published in chapter 7 “Share Capital and Stock Market Information”.
The right to performance shares is lost in the event of departure from the Group due to resignation (other than in the case of termination of corporate office in connection with the exercise of pension rights under applicable retirement regimes) or termination for gross misconduct or gross negligence. In the event of dismissal of an executive corporate officer, the Board will decide, pursuant to the AFEP‑MEDEF Code, on the outcome of performance shares granted as from the appointment as executive corporate officer.
When the benefit of performance share grants to the executive corporate officer is maintained in the event of his or her departure prior to expiry of the vesting period, it is motivated by the following considerations:
| Performance share plan dated: | 20/04/2017 | 17/04/2018 | 18/04/2019 |
|---|---|---|---|
| Arithmetic average of performances across the 3 financial years concerned | Arithmetic average of performances across the 3 financial years concerned 20/04/20172018 – 2019 – 2020 |
Arithmetic average of performances across the 3 financial years concerned 17/04/20182019 – 2020 – 2021 |
Arithmetic average of performances across the 3 financial years concerned 18/04/20192020 – 2021 – 2022 |
| ● For 50%: Growth in comparable sales as compared to a panel of competitors* | ● For 50%: Growth in comparable sales as compared to a panel of competitors* 20/04/2017+ 2.7 points |
● For 50%: Growth in comparable sales as compared to a panel of competitors* 17/04/2018+ 4.6 points |
● For 50%: Growth in comparable sales as compared to a panel of competitors* 18/04/2019+6.1 points |
| ● For 50%: Growth in the Group’s operating profit | ● For 50%: Growth in the Group’s operating profit 20/04/20173.95% |
● For 50%: Growth in the Group’s operating profit 17/04/20188.3% |
● For 50%: Growth in the Group’s operating profit 18/04/2019+11.1% |
| Level of achievement of the performance conditions | Level of achievement of the performance conditions20/04/201782.95% | Level of achievement of the performance conditions17/04/2018100% | Level of achievement of the performance conditions18/04/2019100% |
* Panel of competitors: Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Johnson & Johnson, Henkel, LVMH, Kao and Coty.
The executive corporate officer does not benefit from the payment of a remuneration for his/her position as Director.
There are no plans to supplement the executive corporate officer’s fixed remuneration by granting benefits in kind.
The executive corporate officer benefits from the necessary material resources for performance of his or her office such as, for example, the provision of a car with a driver. These arrangements, which are strictly limited to professional use, are not benefits in kind.
The executive corporate officer continues to be treated in the same way as a senior manager during the term of his corporate office which allows him to continue to benefit from the additional social protection schemes and, in particular, the defined contribution pension scheme, and the employee benefit and healthcare schemes applicable to the Company’s employees.
