2023 universal registration document

2. Corporate governance

Consequences on performance shares in the event of departure

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 liquidation of statutory and compulsory supplementary pension schemes) 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:

  • the performance shares represent a predominant component of the executive corporate officer’s annual remuneration assessed during the year of the grant;
  • they are the consideration for the execution of his or her corporate office subject to the achievement of long-term performance;
  • the maintenance thereof encourages the executive corporate officer to take a long-term view; and
  • the final vesting of the shares remains subject to achievement of the performance conditions.

Achievement of the performance conditions of the last three performance share plans

Performance share plan dated: 17/04/2018 18/04/2019 14/10/2020
Arithmetic average of performances across the 3 financial years concerned Arithmetic average of performances across the 3 financial years concerned17/04/20182019 – 2020 – 2021 Arithmetic average of performances across the 3 financial years concerned18/04/20192020 – 2021 – 2022 Arithmetic average of performances across the 3 financial years concerned14/10/20202021 – 2022 – 2023
  • 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*
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 comparable sales as compared to a panel of competitors*
14/10/2020

+6.7 points
  • For 50%: Growth in the Group’s operating profit
  • For 50%: Growth in the Group’s operating profit
17/04/2018

+8.3%
  • For 50%: Growth in the Group’s operating profit
18/04/2019

+11.1%
  • For 50%: Growth in the Group’s operating profit
14/10/2020

+16.2%
Level of achievement of the performance conditions Level of achievement of the performance conditions17/04/2018100% Level of achievement of the performance conditions18/04/2019100% Level of achievement of the performance conditions14/10/2020100%

* Panel of competitors: Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Kenvue (formerly Johnson & Johnson), Henkel, LVMH, Kao and Coty.

Other benefits

a) Remuneration for term of office as Director

The executive corporate officer does not benefit from the payment of a remuneration for his/her position as Director.

b) Benefits in addition to remuneration

Benefits in kind

There are no plans to supplement the executive corporate officer’s fixed compensation 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.

Additional social protection schemes

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.

Illustration of the compensation policy in financial year 2024: Components of remuneration attributable to Mr Nicolas Hieronimus, Chief Executive Officer

The structure of Mr Nicolas Hieronimus’ remuneration is in line with the principles developed in subparagraph 2.4.1.2.1. of the remuneration policy applicable to the executive corporate officer, and forms a balanced whole with a breakdown that is approximately:

  • 50/50 between fixed remuneration and target annual variable remuneration;
  • 50/50 between annual remuneration and long-term remuneration (performance shares);
  • 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.

Mr Nicolas Hieronimus’ annual variable remuneration may exceed 100% of his fixed compensation and up to a maximum of 120% in order to be able to remunerate outperformance. This outperformance will be assessed on a criterion-by- criterion basis.

The Board of Directors will be called upon to decide on a granting of performance shares in 2024 in accordance with the remuneration policy submitted for the approval of the Annual General Meeting of 23 April 2024.