2023 universal registration document

2. Corporate governance

2.5 Summary table of the recommendations of the AFEP‑MEDEF Code which have not been applied

HISTORY OF CONDITIONAL GRANTS OF SHARES (ACAS) TO MR NICOLAS HIERONIMUS SINCE HIS APPOINTMENT AS A CORPORATE OFFICER

Grant date	Number of ACAs granted	Performance conditions See the performance conditions described in chapter 7 of this document.	Grant value (IFRS fair value)	Date of final vesting of all or part of the ACAs	Number of finally vested shares	First possible date of sale of a portion of theseMr Nicolas Hieronimus, as corporate officer, shall retain 50% of the fully vested shares in registered form until the end of his term of corporate office. Mr Nicolas Hieronimus has undertaken not to enter into any risk hedging transactions.
7 October 2021	7 October 2021 Number of ACAs granted 17,000	7 October 2021 Performance conditions See the performance conditions described in chapter 7 of this document. Yes	7 October 2021 Grant value (IFRS fair value) 5,768,780	7 October 2021 Date of final vesting of all or part of the ACAs 8 October 2025	7 October 2021 Number of finally vested shares N/A	7 October 2021 First possible date of sale of a portion of theseMr Nicolas Hieronimus, as corporate officer, shall retain 50% of the fully vested shares in registered form until the end of his term of corporate office. Mr Nicolas Hieronimus has undertaken not to enter into any risk hedging transactions. 8 October 2025
13 October 2022	13 October 2022 Number of ACAs granted 20,000	13 October 2022 Performance conditions See the performance conditions described in chapter 7 of this document. Yes	13 October 2022 Grant value (IFRS fair value) 6,066,600	13 October 2022 Date of final vesting of all or part of the ACAs 14 October 2026	13 October 2022 Number of finally vested shares N/A	13 October 2022 First possible date of sale of a portion of theseMr Nicolas Hieronimus, as corporate officer, shall retain 50% of the fully vested shares in registered form until the end of his term of corporate office. Mr Nicolas Hieronimus has undertaken not to enter into any risk hedging transactions. 14 October 2026
13 October 2023	13 October 2023 Number of ACAs granted 17,000	13 October 2023 Performance conditions See the performance conditions described in chapter 7 of this document. Yes	13 October 2023 Grant value (IFRS fair value) 6,323,320	13 October 2023 Date of final vesting of all or part of the ACAs 14 October 2027	13 October 2023 Number of finally vested shares N/A	13 October 2023 First possible date of sale of a portion of theseMr Nicolas Hieronimus, as corporate officer, shall retain 50% of the fully vested shares in registered form until the end of his term of corporate office. Mr Nicolas Hieronimus has undertaken not to enter into any risk hedging transactions. 14 October 2027

See the performance conditions described in chapter 7 of this document.

Mr Nicolas Hieronimus, as corporate officer, shall retain 50% of the fully vested shares in registered form until the end of his term of corporate office. Mr Nicolas Hieronimus has undertaken not to enter into any risk hedging transactions.

TABLE OF PERFORMANCE SHARES THAT BECAME AVAILABLE DURING THE 2023 FINANCIAL YEAR FOR MR NICOLAS HIERONIMUS

N/A.

2.5. Summary table of the recommendations of the AFEP‑MEDEF Code which have not been applied

AFEP-MEDEF Code recommendations	L’Oréal’s practices and justifications
Composition of the Committees: proportion of independent members of the Committees (points 17.1 and 18.1 of the AFEP-MEDEF Code)
The proportion of independent Directors on the Audit Committee must be at least two-thirds.	The proportion of independent Directors on the Audit Committee must be at least two-thirds. L’Oréal’s practices and justifications The Audit Committee consists of 60% independent Directors (i.e., three out of five). The Committee is chaired by Ms Virginie Morgon, an independent Director. The Board of Directors considers this composition satisfactory in light of the necessary presence of two Directors from L’Oréal’s majority shareholders and its choice of maintaining a limited number of members in order to ensure the efficiency of the work of this Committee which requires a certain level of expertise in finance or accounting.
The Selection or Appointments Committee and the Remuneration Committee must be composed of a majority of independent Directors.	The Selection or Appointments Committee and the Remuneration Committee must be composed of a majority of independent Directors. L’Oréal’s practices and justifications The Nominations and Governance Committee currently consists of 50% independent Directors. The Committee is chaired by Mr Patrice Caine, an independent Director. Furthermore, in 2021, the Haut Comité de Gouvernement d’Entreprise (High Committee on Corporate Governance) restated that “an Audit Committee in which three of the five members are independent, or a Remuneration Committee in which two of the four members are independent, complies with the spirit of the code as long as it is chaired by an independent Director” and acknowledged that a committee in which 50% (rather than a majority) of the members are independent Directors complies with the recommendation of the Code as long as the chairman of the committee is independent (November 2021 report).
Employment contract of the corporate officer (points 23 and 25 of the AFEP-MEDEF Code)
It is recommended, though not required, that when a senior manager becomes a director and corporate officer of the Company, his/her employment contract with the Company or another company of the Group should be terminated by agreed termination or by resignation. When agreement is reached, it is likely to include a clause authorising the Board to waive the application of this non-compete agreement at the time of the manager’s departure. No non-compete compensation may be paid beyond the age of 65.	It is recommended, though not required, that when a senior manager becomes a director and corporate officer of the Company, his/her employment contract with the Company or another company of the Group should be terminated by agreed termination or by resignation. When agreement is reached, it is likely to include a clause authorising the Board to waive the application of this non-compete agreement at the time of the manager’s departure. No non-compete compensation may be paid beyond the age of 65. L’Oréal’s practices and justifications The Board of Directors considered that the objective pursued by this recommendation can be fully achieved by maintaining the suspension of the employment contract and clearly separating the benefits related to the employment contract from those tied to his corporate office. This position of the Board applies to the current office of Mr Nicolas Hieronimus as Chief Executive Officer and, in the future, to any new executive officer appointed who has over 15 years of service in the Group at the time of appointment. L’Oréal’s ongoing policy has been to appoint employees who have completely succeeded in the various stages of their career in the Group as corporate officers. This is reflected in Nicolas Hieronimus’s appointment as Chief Executive Officer from 1 May 2021, after a highly successful career in the Group over the previous 34 years. The Board of Directors noted that if, in accordance with the AFEP‑MEDEF recommendation, his employment contract with L’Oréal were to be terminated, Mr Nicolas Hieronimus would lose the status he acquired as a result of the 34 years he spent working for the Group as an employee. The AMF, in its Recommendation 2012-02 last updated on 14 December 2023, considers that a senior manager’s length of service as a company employee and their personal situation may justify maintaining their employment contract if the company provides explanations adapted to the individual situation of each executive (length of service and description of the benefits granted under the employment contract).