2023 universal registration document

The Group ensures that all employees receive at least the minimum salary set by local law or the applicable collective agreements, and that they receive a living wage that covers their basic needs, calculated in line with best practices. In 2023, for the second consecutive year, the Group was certified by the NGO Fair Wage Network as a “Living Wage Employer” for its worldwide workforce. This certification confirms that the Group’s employees are paid more than the living wage defined each year and for each country by this independent expert.

A total rewards approach is used to provide each employee with a competitive rewards package that includes both components of remuneration and employee benefits.

The Group is implementing a remuneration policy that combines external competitiveness with internal equity. This rewards both individual and collective performance. Employees share in the Company’s results through collective profit-sharing schemes rolled out globally.

The L’Oréal remuneration policy is formalised within a Rewards charter and is implemented by a worldwide network of Rewards experts. External surveys are conducted every year with specialist firms to ensure L’Oréal’s competitive positioning in relation to each local reference market.

The ambition is for all employees to clearly and transparently understand their remuneration and how it is determined.

Remuneration decisions are guided by an annual employee performance assessment system that is used in all subsidiaries. It enables the communication of remuneration decision making principles, processes and outcomes. The Group is implementing a new HR information system that will enhance and update communications on this subject.

Personnel costs (including welfare contributions)

Employee shareholding plans

Keen to share its growth with its employees, L’Oréal launched its first worldwide employee share ownership plan in 2018. The results were very satisfactory. L’Oréal wanted to provide eligible employees the opportunity to support the growth of the company and participate in its strategic development by launching two new plans in 2020 and 2022. These plans were designed to gather, unite and increase the loyalty of employees worldwide by enhancing a feeling of belonging, commitment and social cohesion.

Eligible employees had the possibility of purchasing shares with preferential conditions including, where permitted by local law, a 20% discount on the share reference price, with an employer matching share contribution of up to four free shares.

The plan was rolled out in 62 countries in 2022, seven more than in 2020. It was a big success with a 35% subscription rate, similar to the first two plans. This is a high percentage compared to other companies that have set up employee shareholding plans⁽¹⁾(1)2023 survey on employee share ownership by the French Federation of Employee Shareholder Associations and Former Employees – FAS. The survey includes entities in France that practice employee share ownership and performs a recurring analysis between these same entities..

Plans for the conditional grant of shares to employees (ACAs)

L’Oréal sets up long-term incentive plans for its international senior managers and corporate officers. These take the form of grants of performance shares. These grants serve a dual purpose: to motivate and include the major contributors in the Group’s future successes, and to strengthen the commitment and feeling of belonging of its beneficiaries by fostering long-term loyalty in a context of increased competition for talent.

According to the Group’s strategic objectives, the choice of beneficiaries and the vesting criteria are settled in a specific policy. The Board of Directors, subject to the recommendation of the Human Resources and Remuneration Committee, approves the conditional grant of shares and lays down the applicable rules. The vesting of these shares is subject to the achievement of performance targets and the beneficiary’s continued presence in the Company. Performance conditions include both financial and non‑financial performance criteria (see section 5.4.).

54% of the beneficiaries of the 12 October 2023 plan are women. More than 3,600 employees, representing approximately 8% of the managers around the world, nearly 54% of whom are in international subsidiaries, benefit or have benefited from at least one conditional grant of shares plan since 2019 and were still employees of the Company on 31 December 2023.