2023 universal registration document

Final vesting of these shares is subject to achievement of performance conditions which will be recorded at the end of a four-year vesting period as from the grant date. T

ber of vested shares will depend:

• in part, criteria for financial performance based on:
  • growth in comparable cosmetics sales of L’Oréal as compared to a panel of L’Oréal’s major direct competitors,
  • growth in L’Oréal’s consolidated operating profit;
• in part, criteria for non-financial performance based on:
  • fulfilment of environmental and social responsibility commitments made by the Group as part of the L’Oréal for the Future programme (hereinafter “L’Oréal for the Future Commitments”): % of sites achieving 100% renewable energy (previously designated as “carbon neutral”)⁽¹⁾A site must meet the following criteria: Direct CO2 (Scope 1) = 0, with the specific exception of the gas used for catering, the fuel oil used for sprinkler tests, the fuel oil (or diesel) used temporarily by backup units, fossil energy consumed during maintenance of on-site renewable facilities and cooling gas leaks if they are lower than 130 tonnes CO2 eq./year; and indirect Market Based CO2 (Scope 2) = 0. It should be noted that renewable energy sources no longer need to be located less than 500 kilometres from the site.; % of formula ingredients that are biobased, traceable and come from sustainable sources; % of plastic packaging that comes from either recycled or biobased sources; number of people benefitting from the Group’s brands’ social commitment programmes, and
  • gender balance within strategic positions including the Executive Committee.

Pursuant to the criterion relating to net sales, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, L’Oréal must outperform the average growth in net sales of the panel of competitors. Below this level, the number of finally vested shares is in decline. If L’Oréal’s comparable growth in net sales is lower than the average growth in net sales of the panel of competitors, no shares will be finally vested under this criterion.

Pursuant to the criterion related to operating profit, a level of growth, defined by the Board, but not made public for confidentiality reasons, must be met or exceeded in order for all free shares granted to be finally vested by the beneficiaries at the end of the vesting period. Below this level, the number of finally vested shares is in decline. If the operating profit does not increase in absolute value over the period, no share will finally vest pursuant to this criterion.

With regard to the achievement of the L’Oréal for the Future Commitments criterion, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, an average of 70% of the L’Oréal for the Future Commitments must be achieved during the vesting period. Below this level, the grant decreases. No shares will vest if the average level of achievement for the L’Oréal for the Future Commitments falls below 55%.

Pursuant to the criterion relating to gender balance in strategic positions, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, the average representation of one of the sexes must account for at least 40% of employees in strategic positions. Below this level, the grant decreases. No shares will vest in relation to this criterion if the average representation of one of the sexes is less than 35% over the vesting period.

The grant of shares to Mr Nicolas Hieronimus in 2023 represents 2.61% of the total number of ACAs granted to the 2,763 beneficiaries of this same Plan. In accordance with the authorisation of the Annual General Meeting of 21 April 2022, this grant of shares does not represent more than 0.6% of the share capital, it being understood that the maximum amount granted to corporate officers may not represent more than 10% of the total amount of free shares that may be granted. No share subscription or purchase options or other long-term incentives have been granted to Mr Nicolas Hieronimus in 2023.

Mr Nicolas Hieronimus does not receive any remuneration as Director.