2023 universal registration document

For the conditional grant of shares, the plan provides for a four-year vesting period after which vesting is effective and final, subject to meeting the conditions of the plan.

The performance conditions for the 7 October 2021 and 14 October 2020 plans are:

• for 50% of shares granted, the growth in comparable cosmetics net sales in relation to those of a panel of competitors for the 2022, 2023 and 2024 financial years under the 2021 plan and for the 2021, 2022 and 2023 financial years under the 2020 plan;
• for 50% of shares granted, the increase over the same period in the Group’s consolidated operating profit for the 7 October 2021 and 14 October 2020 plans.

The calculation will be made on the basis of the arithmetic average of the performances for financial years:

• 2022, 2023 and 2024 for the 2021 plan;
• 2021, 2022 and 2023 for the 2020 plan,

and it will use a predefined allocation scale based on the performance percentage achieved. No performance condition applies below a block of 200 shares.

The performance conditions for the 12 October 2023 and 13 October 2022 plans are:

• for 80%, based on financial performance criteria that include:
  • for one half, the growth in comparable cosmetics net sales in relation to those of a panel of competitors for the financial years:
    • 2024, 2025 and 2026 for the 2023 plan,
    • 2023, 2024 and 2025 for the 2022 plan,
  • for the other half, the increase over the same period in the Group’s consolidated operating profit. The calculation will be made on the basis of the arithmetic average of the performances for financial years:
    • 2024, 2025 and 2026 for the 2023 plan,
    • 2023, 2024 and 2025 for the 2022 plan;
• for 20%, based on non-financial performance criteria that include:
  • 15% is associated with the fulfilment of environmental and social responsibility commitments made by the Group as part of the L’Oréal for the Future programme;
  • 5% is associated with the gender balance within strategic positions, including the Executive Committee.

No performance condition applies below a block of 100 shares.

The plans of 20 April 2017, 17 April 2018 and 18 April 2019 were finally granted by the allocation of, respectively, 742,276 shares on 21 April 2021, 868,225 shares on 19 April 2022 and 776,525 shares on 19 April 2023. The number of fully vested shares for the 18 April 2019 plan took into account the performance percentage achieved at the end of the plan.

As at 31 December 2023, the performance conditions of the plans in progress were deemed achieved.

16.3. Capital increase reserved for employees

In June 2022, Group employees had the opportunity to join a Shareholding Plan based on a traditional format with discount and matching contribution.

The subscription price was set at €254.9, representing 80% of the average share price over the 20 trading sessions prior to the decision by the Chief Executive Officer setting the subscription period from 8 June to 22 June 2022 during which 410,943 shares were subscribed. This number does not include the subscription reserved for a Trustee under the laws of England and Wales, as part of a Share Incentive Plan established for Group employees in the UK, in respect of which 3,376 subscribed shares were agreed in October 2023.

For French employees, free shares were offered upon subscription in proportion to their personal contribution to the plan with a maximum of four shares offered for 10 shares subscribed.

For employees in other countries, shares were offered under a free share plan with a continued employment condition for the employee and proportionate to how much the employee contributes to the plan, with a maximum of four shares offered for 10 subscribed shares. The shares will be allocated to employees on 26 July 2027 provided they are still with the Group on that date.

The share capital increase took place on 26 July 2022 for a total of 448,267 shares and on 12 October 2023 for a total of 4,643 shares, including subscribed shares.