AIRBUS - 2019 Registration Document

Corporate Governance  / 4.2 Interests of Directors and Principal Executive Officers

4.2 Interests of Directors and Principal Executive Officers

4.2.1 Remuneration Policy

achieves its strategic and operational objectives, thereby delivering long-term sustainable returns for all shareholders and other stakeholders. The Board of Directors and the RNGC are committed to making sure that the executive remuneration structure is transparent and comprehensive for all stakeholders, and to ensure that Executive rewards are consistent and aligned with the interests of long-term shareholders also taking into consideration salary evolution of employees across the group. Before setting the targets to be proposed for adoption by the Board of Directors, the RNGC considers the financial outcome scenarios of meeting performance targets, including achieving maximum performance thresholds, and how these may affect the level and structure of the Executive remuneration. b) Total Direct Compensation and Peer Group The CEO’s total direct compensation (“Total Direct Compensation”) comprises a Base Salary (“Base Salary”), an annual variable remuneration (“Annual Variable Remuneration” or “VR”) and a Long-Term Incentive Plan (“LTIP”). The three elements of the Total Direct Compensation are each intended to comprise one-third of the total, assuming the achievement of performance conditions is 100% of target. The level of Total Direct Compensation for the CEO (Base Salary, VR and LTIP) is set at the median of an extensive peer group and takes into account the scope of the role of the CEO and the level and structure of executive rewards within Airbus. The benchmark is regularly reviewed by the RNGC and is based on a peer group which comprises: - - global companies in Airbus’ main markets (France, Germany, UK and US); and - - companies operating in the same industries as Airbus worldwide. The latest benchmark performed in November 2018 was based on the relevant peer group composed of 76 companies selected from CAC 40 in France, DAX 30 in Germany, FTSE 100 in the UK and DJ 30 in the US as well as large European companies having comparable economic indicators such as revenues, number of employees and market capitalisation. Financial institutions were excluded from the peer group.

The Remuneration Policy covers all Members of the Board of Directors: the CEO (who is the only Executive Director) and the other Members of the Board (who are the Non-Executive Directors). It should be noted that although the policy relating to Executives remuneration only refers to the CEO, these principles are also applied to the other Members of the Executive Committee, who do not serve on the Board of Directors, and to a large extent to all Executives across Airbus. Upon proposal by the CEO, the RNGC analyses and recommends, and the Board of Directors decides, the remuneration of the Members of the Executive Committee. An amendment to the Remuneration Policy (as adopted at the AGM held on 28 April 2016) will be proposed for adoption by the shareholders at the AGM to be held in 2019. The application of the Remuneration Policy in 2018 will be included as a separate agenda item for discussion at the AGM to be held in 2019. To see how the Remuneration Policy was applied in 2018 in respect of the CEO (the only Executive Member of the Board of Directors, see “— 4.2.1.5 Implementation of the remuneration policy: CEO”. The cumulated remuneration of all Executive Committee Members is presented in the “Notes to the IFRS Consolidated Financial Statements — Note 31: Remuneration”. To see how the Remuneration Policy was applied in 2018 in respect of the non-Executive Members of the Board of Directors, see “— 4.2.1.6 Implementation of the remuneration policy: Non- Executive Directors”. 4.2.1.1 Executive Remuneration – Applicable to the CEO Except with respect to the amendments proposed in Section 4.2.1.4 “Proposed amendments to the remuneration policy”, related to contracts and severance provisions, there will be no change in the remuneration policy in connection with the proposed appointment of a future CEO at the 2019 AGM; the policy as presented below will continue to apply. a) Remuneration Philosophy The Company’s remuneration philosophy aims to provide remuneration that will attract, retain and motivate high-calibre executives, whose contribution will ensure that the Company

140

Airbus / Registration Document 2018