DETAILS OF WEIGHTING OF ANNUAL VARIABLE REMUNERATION
This diagram indicates the details of the weighting of the annual variable remuneration.
60% Financial criteria
Sales: 15%
Growth differential/panel: 15%
Operating profit: 10%
EPS: 10%
Cash flow: 10%
40% Non-financial and qualitative criteria
Extra-financial criteria 25%
10% CSR L’Oréal for the Future Program
7.5% Human Resources
7.5% Digital development
Qualitative criteria 15%
7.5% Management
7.5% Image, Company reputation, Relations 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, 100% of the energy used by operated sites(1)On the Group’s operated sites, excluding safety and security installations as defined in paragraph 4.5.1.3. “Environmental data”. will be renewable.
- 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.
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 ECOSYSTEM IN OUR TRANSFORMATION
- By 2030, all Group products will be eco-designed.
- By 2030, 100,000 people from underprivileged 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.
Granting of performance shares
Since 2009, the Board of Directors has granted performance shares to employees of the Group and, since 2012, also to its executive corporate officer, within the scope of Articles L. 225-197-1 et seq., L. 22-10-59, L. 22-10-60 and L.22‑10-8 of the French Commercial Code and the authorisations granted by the Annual General Meeting.
These grants are linked to the performance and their aim is to encourage achievement of the Group’s long-term objectives and the resulting value creation for the shareholders. Consequently, the final vesting of the shares is subject to performance conditions which are recorded at the end of a vesting period of four years from the grant date.
The value of these shares, estimated at the grant date according to the IFRS applied for the preparation of the consolidated financial statements, represents approximately 50% of the executive corporate officer’s annual remuneration and may not exceed 60%.
The Board of Directors reserves the possibility to decide on an additional grant if a particular event justifies it. This potential grant to the executive corporate officer, duly documented by the Board of Directors, may not exceed a total annual ceiling (taking into account any grants already awarded in the year) of 5% of the total number of free shares granted during that same financial year.
The executive corporate officer is required to retain 50% of the free shares finally vested to him or her at the end of the vesting period, in registered form, until the termination of his or her duties, following a review of the performance conditions.
The executive corporate officer makes a formal undertaking not to enter into any risk hedging transactions with regard to the performance shares, until the end of the holding period set by the Board of Directors.
An executive corporate officer may not be granted performance shares at the time of his or her departure.