2023 universal registration document

2. Corporate governance

  Amount Description
Fixed remuneration €2,000,000 At its meeting of 8 February 2024, on the recommendation of the Human Resources and Remuneration Committee, the Board of Directors is proposing to the Annual General Meeting of 23 April 2024 to maintain the fixed remuneration of Mr Nicolas Hieronimus at the gross amount of €2,000,000 on an annual basis. This amount has not changed since 2021.
2023–2024 changes 0% This amount has not changed since 2021.

Annual variable remuneration 

 €2,000,000 (target 100% of the fixed amount) Maximum 120% of the fixed amount, or €2,400,000 The annual 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 Board of Directors strives to encourage the executive corporate officer both to maximise performance for each financial year and to ensure that it is repeated and regular year-on-year.
The annual variable remuneration may reach 120% of the fixed compensation if there is outperformance on the objectives; the target is set at 100% of the fixed compensation.
Criteria for assessment of performance for 2024 Weightings
  • Financial criteria
 60%
    • Evolution in like-for-like sales as compared to the budget

15%

    • Evolution in market share as compared to the main competitors

15%

    • Evolution in operating profit as compared to the budget

10%

    • Evolution in net earnings per share as compared to the budget

10%

    • Evolution in cash flow as compared to the budget

10%

  • Non-financial and qualitative criteria

40%

    • Quantifiable criteria: 25%
 
      • L’Oréal for the Future: sustainability commitments for 2030
 10%
      • Human Resources: gender balance, development of talented employees, access to learning
 7,5%
      • Digital development
 7,5%
    • Individual qualitative performance: 15%
  
      • Management
 7,5%
      • Image, company reputation, dialogue with stakeholders
 7,5%
The quantifiable, financial (60%) and non-financial (25%) criteria account for 85% of annual variable remuneration. The weighting of each of these criteria, both financial, non-financial and qualitative, and the targets to be met were set at the start of the year and communicated to the executive corporate officer. The assessment is made without offsetting among criteria.
Performance shares

Concerning the granting of performance shares in 2024, the Board of Directors will be called upon to decide on the implementation of a new Plan within the scope of the authorisation submitted for approval by the Annual General Meeting of 23 April 2024. The grant that would be decided for Mr Nicolas Hieronimus would comply with the recommendations of the AFEP-MEDEF Code. The value of the grant (estimated according to the IFRS standards), represents approximately 50% of the executive corporate officer’s total remuneration without exceeding 60%. Mr Nicolas Hieronimus is also required to hold 50% of the free shares that are fully vested to him at the end of the vesting period in registered form until the termination of his term of corporate office. Final vesting of these shares is subject to achievement of performance conditions which will be recorded at the end of a 4-year vesting period as from the grant date. The number of vested shares will depend:

  • on growth in comparable cosmetics sales versus those of a panel of competitors, which consists of Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Kenvue (formerly known as “Johnson & Johnson”), Henkel, LVMH, Kao and Coty (40%);
  • on growth in the Group’s consolidated operating profit (40%);
  • on the fulfilment of environmental and social responsibility commitments made by the Group as part of the L’Oréal for the Future programme (% of sites achieving 100% renewable energy(1); % of plastic packaging that comes from either recycled or biobased sources; number of people benefitting from the Group’s brands’ social commitment programmes) (15%); and
  • on gender balance within strategic positions including the Executive Committee (5%).
    The calculation will be based on the arithmetical average for the three full financial years of the vesting period. The first full year taken into account for assessment of the performance conditions relating to this grant would be 2025.

Remuneration as Director

 €0 Mr Nicolas Hieronimus will not receive remuneration for his position as Director.

(1) On the Group's operated sites, excluding safety and security installations as defined in paragraph 4.5.1.3. “Environemental data”.