Pursuant to Article L. 22-10-9 of the French Commercial Code, for the calculation of average and median remuneration, the scope used is that of L’Oréal S.A., which comprises 6,560 employees as at 31 December 2023(1) (i.e. 40.1% of the L’Oréal workforce in France), 5,143 of whom are managers, 1,256 are supervisors and 161 are workers and administrative staff.
This information is also provided for the France scope, grouping together L’Oréal S.A. with all its subsidiaries in France, i.e. 15,649 employees, of whom 10,239 are managers and sales representatives, 3,477 are technicians and supervisors and 1,933 are administrative staff and workers.
For reasons of comparability, and in accordance with the recommendations of the AFEP, the number of employees selected for the calculation of average and median remuneration corresponds to a full time equivalent workforce continuously present over 24 months, excluding corporate officers. Remuneration is calculated on the basis of all amounts paid and performance shares granted during the financial year in question.
The elements composing the executives’ remuneration used in the calculation are:
The elements composing employee remuneration used in the calculation are:
The termination indemnities and supplementary pension scheme for which the corporate officers of L’Oréal may be eligible, as long as they are former senior managers of the company with more than 15 years of service, are not related to the exercise of the corporate office, but could be due under the suspended employment contract.
Therefore, they are not subject to the approval of the Annual General Meeting of 23 April 2024 under resolution no. 16 “Approval of the remuneration policy for the Chief Executive Officer”.
Shareholders approved the agreement suspending the executive corporate officer’s employment contract at the Annual General Meeting of 20 April 2021.
The AFEP-MEDEF Code to which L’Oréal refers, recommends, but does not require, that companies should put an end to combining an employment contract with a corporate office.
L’Oréal’s Board of Directors shares the objectives of this recommendation which aims at avoiding the possibility of concurrently obtaining benefits both from the employment contract and the corporate office and at prohibiting any interference with the possibility of removing executive corporate officers ad nutum. The Board of Directors has formally provided for the methods of application of the objectives of the recommendation, as adapted to the context in the L’Oréal Group.
The Board’s intention is to use the treatment set out below for any new corporate officer appointed who has over 15 years’ length of service in the Group at the time of his or her appointment.
As L’Oréal’s ongoing policy is to appoint employees who have completely succeeded in the various stages of their careers in the Group as executive corporate officers, the Board does not want these executives to be deprived of the benefits to which they would have continued to be entitled had they remained employees, after spending many years of their career at L’Oréal.
The Board of Directors has considered that the objective pursued by the AFEP-MEDEF recommendation could be fully achieved by maintaining the suspension of the employment contract and clearly separating the benefits related to the corporate office from those relating to the employment contract.
Remuneration in respect of the corporate office will in no event be taken into consideration in the calculation of all benefits that may be due under the employment contract.
The reference remuneration to be taken into account for all rights attached to the employment contract, in particular, for the calculation of the pension under the defined benefit scheme is based on the amount of remuneration at the date of suspension of the employment contract. This reference remuneration is revised annually by applying the revaluation coefficient in respect of salaries and pension contributions published by the French state pension fund (Caisse Nationale d’Assurance Vieillesse). The seniority applied will cover the entire career within the Group, including the years spent as an executive corporate officer.
