CAPGEMINI_REGISTRATION_DOCUMENT_2017

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CORPORATE GOVERNANCE - RISKS{AND INTERNAL{CONTROL

2.4 Compensation of Executive Corporate Officers

the fixed component which is not reviewed annually , but X after several years in accordance with the AFEP-MEDEF Code. Mr.{Paul Hermelin’s fixed compensation was increased in 2008 and was only reviewed in 2013 (+10%) following an extension of his responsibilities and to reflect the strong growth and international expansion of the Group and has remained unchanged since; the internal performance indicators included in the calculation of the V1 component and the weighting applied to each indicator . The level of attainment of these indicators is determined based on a comparison of actual audited and budgeted Group consolidated results. The performance indicators are adopted in line with the key indicators presented regularly to the market and are tied in 2017 as it will be the case in 2018 to: growth through Group Revenue achievement for 30%, ❚ operating profitability through Group Operating margin for ❚ 30%, cash generation through the Group Free Organic Cash Flow ❚ for 20% shareholders return through net profit before taxes for ❚ another 20% as this is the driver to assess the dividend level; the individual performance objectives underlying V2 X compensation . The strategic and operating objectives for 2017 of the Chief Executive Officer felt into three main categories, “the Digital and Cloud acceleration roadmap”, “the HR and delivery strategy around diversity, talent management and mobility” and “the recovery of the North American operations”. The Board of Directors ensured the objectives were based on directly measurable items so that overall 75% of the total variable compensation was based on quantitative data and,

that objectives are clearly tied to the roll out of the Group’s strategy priorities approved by the Board of Directors as conditions to deliver the long term strategic plan; the acceleration formula applied to V1 . The V1 component X varies in line with a formula, that accelerates actual performance upwards and downwards such that in 2017: the V1 component is nil if the weighted performance of ❚ financial indicators is less than or equal to 75%, the V1 component can reach twice the theoretical amount if ❚ the weighted performance is greater than or equal to 125%; varying on a straight-line basis between these two{limits. The level of attainment of objectives and the amount of the variable compensation components are decided pursuant to the recommendation of the Compensation Committee, by the Board of Directors’ meeting in Y+1 held to approve the financial statements of fiscal year Y. The Committee meets on several occasions before the Board of Directors’ meeting to appraise the percentage attainment by Mr.{Paul Hermelin of his objectives. An executive session of the Board was held in December{2017 and another one in February{2018 to assess such performance before the Board of Directors which decides the level of attainment by Mr.{Hermelin of his objectives. The variable compensation used to be paid end of March, after the Board of Directors’ meeting that approves the financial statements for fiscal year Y, underlying the calculation of the various variable compensation components and that decided the percentage attainment of individual objectives set. Since 2017, the variable compensation of the Chairman and Chief Executive Officer is paid following approval by the Shareholders Meeting of the compensation elements for fiscal year Y and this will be applicable as well to the Chief Operating Officers.

Summary table of the theoretical structure of fixed and variable compensation applicable to Executive Corporate Officers

Theoretical compensation structure, base 100

Target

Min

Max

Gross fixed compensation

60 20 20

60

60 40 40

Annual variable compensation V1 Annual variable compensation V2 Multi-year variable compensation

0 0 0

0

0

Theoretical total if objectives are attained

100

60

140

% variable / fixed

67%

0%

133%

Capgemini share-based incentive policy procedures The Group stopped granting stock options in 2009 and now grants performance shares in accordance with the following principles: performance shares are granted subject to the same X conditions of presence and performance as applicable to other Group beneficiaries and all shares are subject to performance and presence conditions . Mr.{Paul Hermelin received performance shares in 2009, 2012, 2013, 2014, 2015, 2016 and 2017 but was not granted any shares in 2010 or 2011;

the associated conditions are ambitious, as demonstrated by X the effective share grant percentages of the first four fully vested plans with respectively 42.3% for the 2009 plan, 56.7% for the 2010 plan, 87.9% for the 2012 plan and 83.9% for the 2013 plan, of the number of shares initially granted; the performance conditions are set in the resolution X submitted for shareholders' approval and include, internal and external conditions in accordance with the AMF recommendation, and are calculated over a 3 years period to ensure a sustainable performance and to align Executive Corporate Officers and shareholders interests in the long run;

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REGISTRATION DOCUMENT 2017 — CAPGEMINI